In a world where the pace of business has accelerated and shows no sign of slowing down, the ability to speed up the decision-making process is crucial. This is particularly vital in the Hi Tech industry where digitization, volatility and product innovation are an important part of the market’s DNA. Hi Tech manufacturers face challenges associated with their complex manufacturing and distribution networks, whether they are OEMs or upstream component suppliers.
As a result, traditional methods for driving profitable growth like cutting costs can no longer keep up with new, digitally-enabled competitors. In this environment, companies are challenged to process more quotes, fill more orders, and grow with less time and fewer people. It’s no secret that most Hi Tech companies face challenges in making their sales performance sustainable. When things turn difficult in this environment, there’s always the option of loosening up on pricing concessions to survive. While it happens all the time, we know it’s a shortsighted response that comes with painful consequences.
Ultimately, there is little understanding of what sales excellence looks like for hi tech manufacturers — and by that virtue, companies lack visibility into their development towards it.
First, what’s the difference between a basic and excellent sales organization?
Second, how can you move from average to excellent?
- Make better decisions to define and optimize your pipeline: Look beyond where your business is today. Which segments and customers are producing the revenue now but also next year.
- Match the right opportunities with the right people. Take control of your go-to-market architecture, (channels, resellers, etc) and allocate resources based on your planning and priorities.
- Optimize Customer Segmentation: Leverage science and go beyond revenue driven customer classification. Segment the customer base so you know the different needs of different opportunities.
- Align prices with customer perceived value: Equip your commercial teams with the necessary skills to identify and rationalize an opportunity so they can match the customer to value proposition. Provide them with technology in the form of predictive analytics, next product to buy, or segment typing tools that help the sales force understand how to and what to pitch, especially in companies that have complex portfolios.
- Deliver an excellent customer experience: Invest on building the right operating model, especially if you are operating globally so you can do the above consistently. Think about a hybrid approach between a centralized headquarters organization to drive strategy, provide guardrails and performance management combined with regions focused on operational planning.
Some examples of how to accomplish these objectives can be further developed based on area of focus:
- Provide focused segmentation models to match specific markets and customer types with appropriate sales channels vs traditional approach (Where revenue size as sole driver or new vs. existing customer pursuits)
- Guide sales and customer teams to help them structure more profitable deals, particularly where they have leverage to stand their ground in negotiations
- Rationalize go-to-market strategy by automating product offering, configurations and pricing differentiation strategies across all markets and channels and avoiding cannibalization (Direct vs Distribution, product lifecycle, etc.)
- Design a framework for executive decision making that effectively combines both quantitative and qualitative inputs
- Leverage analytics to evaluate different scenarios, characterize risks, and identify responsible corrective actions
- Establish guidelines that define a clear escalation path for deal parameters outside of target profitability
- Deploy analytical tools to capture insight from historical sales data (i.e. Win/Loss data)
- Plan your resources according to a set sales capacity across industry, region and customer segments
- Establish a centralized organization that develops strategy and guidelines, orchestrates the planning process, and then leads the performance management
- Integrate the CRM/CPQ system into all sales processes and encourage use of the system by all internal and external stakeholders
For more on how better pricing can boost profits, download our whitepaper, 2 Ways Hi Tech Manufacturers Can Manage Price Erosion to Maximize Margin and Boost Sales.