Sales Management: Growing with an Eye on "Fit"
by Dianna Brodine
The lessons of the past decade still ring loudly for most manufacturers. Today's growth in sales and production volume has been welcomed, but a healthy dose of suspicion comes along with it. No one wants to return to the days when machines sat idle, but filling the pipeline with the wrong type of work isn't the answer either.
As production opportunities ramp up, processors are asking questions first. Is it the right kind of growth? Is it the right kind of customer? Are there limitations to the volume that can be handled while still maintaining quality standards? Before sales staff expend the energy required to bring a prospect through the quoting process, they need a solid understanding of the types of business the company requires to be successful.
Understanding the growth strategy
"Strategic planning is based on an understanding of the need for a good strategy and the need to stay focused on that strategy," said John Hoskins, director of sales and marketing for Schnipke Engraving Company. "Growth without a strategy isn't really growth at all, and growth shouldn't be haphazard. Your company's actions in the field from a sales perspective need to be focused." Hoskins explained that without a strategic direction, sales staff will be out in the field trying to perform a million tasks without doing any of them well. "Your company will fill its capacity with business that doesn't make sense," he said, "because the sales staff simply wants to bring work through the front door."
Begin with a hard look to determine core competencies, weaknesses (whether in equipment or skills), cost models and acceptable margins. Once you know everything about your own company that could lead to a successful outcome, assess the available markets. "It's pretty simple to know which markets make sense once you understand your own capabilities," said Hoskins. "Then you can look within the industries that do make sense to see where there are further divisions – smaller markets within the market."
Once a narrow market has been identified, the target can be drilled down even further to individual companies that might be a fit. If sales staff hasn't been a part of this planning process, it's crucial that the team members now understand how the assessment was done and, just as importantly, why it was done. Otherwise, the plant will be filling with undesirable work again in three, six or twelve months.
"Understand your strengths and weaknesses, understand the markets you want to go into and have enough fortitude to actually follow the plan," Hoskins explained. "You have to know how to say no."
Finding the right prospects
Once the strengths and goals of the organization are understood, it's time to find prospects that fit. Whether "fit" is defined by a certain sales or production figure that can be met on an annual basis, a shared region or a shared corporate culture – or a combination of those factors and many others – new projects and customers must be assessed prior to the quoting process.
"It's so important to match the customer and prospect to the company," said Bob Holbrook, vice president of sales, Viking Plastics. "There are two full-time salespeople at Viking, and the company has 19 manufacturers' representatives. With so many sales representatives spread over a wide geographic area, we had to develop a standard list of questions that guaranteed we had the information needed to know if the program qualified for what we wanted to bring onto the production floor."
Viking Plastics President Kelly Goodsel and Holbrook worked together to develop both a list of filters for initial compatibility assessments and a more detailed questionnaire to help sales personnel in the quoting process.
When qualifying prospects, Viking begins with a list of 14 filters. These criteria include companies that are using resins that are compatible with Viking's current equipment, are located in a territory covered by a Viking sales associate and have the potential to meet a minimum amount of business per year. Once the filters have been reviewed, a prospecting phase begins that provides information Viking needs in order to ensure its capabilities meet the customer's needs – and vice versa. Is the customer looking for shoot-and-ship or is value-add required? Who are the current suppliers? Is early involvement encouraged? Why is the customer looking for a new supplier?
"Viking has been blessed," explained Holbrook. "We've had a lot of opportunities, so we're trying to cull them to make sure we're not just quoting everything. We will turn opportunities away that don't match with our business plan."
"There needs to be a litmus test," agreed Hoskins. "Is it from an industry we want to be in? Is the company on our top 20 list of prospects? Does the part fall within a component size that we've defined? Does the part fit the criteria that fall within our core competencies? If you fill up all of your capacity with things that don't make sense, you have to add capacity to meet the things you want to do," Hoskins said.
Keep the focus
"A strategy isn't worth anything if you're not going to follow it," reminded Hoskins. "Your people have to understand the strategy, and you have to keep them focused."
To that end, Viking Plastics held a sales meeting in May. "Viking has made a lot of improvements and investments in the plant," said Holbrook, "so we provided a full day of plant tours and sessions that reviewed our capabilities for all of our representatives. We wanted to be sure everyone was trained and refreshed on what the filters are and why the filters are in place. Now, there are no surprises. Before, the guys would present an opportunity that maybe wasn't a great match, but now we have a system of checks and balances."
At Schnipke Engraving Company, the management team puts together clearly stated goals for the sales staff and then shows them how to get there. "We don't belabor our people with numbers and data. Instead, we provide a list of our target customers – we define the top 20 players for them," said Hoskins.
It's also important to ensure the sales staff has a clear idea of what activities are expected in order to achieve the target. Directions such as ‘work a 40-hour work week' and ‘call on prospects' don't provide enough guidance when the sales staff actually is expected to call on a certain number of clients/prospects in person each month, make a defined number of phone calls or quote a specific dollar amount of work. If the sales staff doesn't have a defined goal, the goal will never be met.
In addition, when selecting a sales person, select someone who makes sense for the strategy. "Some markets are transactional, so you need a transactional sales person," said Hoskins. "In our business, I want the top 25 or 50 customers, so we're developing a sales staff that understands what it takes to play at that high level."
In the end, however, it's the strategy that sets the tone and determines if the right business is coming through the door. "The temptation to do a quick production run of ‘easy business' won't subside, but that one step away from the strategic focus could lead to a slippery slide of problems," said Hoskins. "In any really successful company, the person running the ship has an unfaltering vision and strategy, but the sales force is the face of the company. To get the deal done, they need an understanding of who we are, where we're going and how we're going to get there."