Insights into the forces shaping our industry.
Have your Sales & Marketing strategies evolved this year?
Given how much has changed since March, Egret Consulting decided to poll our VP – C level contacts to get sense of how this pandemic has affected the electrical industry’s sales and marketing strategies. We greatly appreciate the many responses and have summarized the data below:
Are customers most interested in price or a solution?
53% responded that solution is what customers are looking for most. They identified end users, specifiers, system integrators, and EPC firms are more focused on a custom solution to a unique application over price. These customers find value adds, good / shortened lead times, product functionality, service and design as most important. Customers are looking for a resource, someone that can get them what they need whether or not they offer it. They work with certain (higher priced) manufacturers because of the relationship and quality of their products. Sales on the solution side should be focused on the problem / application and figuring out what the customer’s need is and where the applications is currently underserved by the competition. Of course, while focusing on the ROI.
13% said price is the main focus. It was shared that there is more budgetary pressure than ever before. They identified distributors and electrical contractors as customers that are looking for the best price. One manufacturer pointed out the way salespeople are compensated contributes to a focus on price… “Too much emphasis is often placed on instantaneous margin and profitability metrics which doesn’t take into account costs that may be incurred at a later date, nor does it take into account client happiness and customer retention”
34% responded a combination of both. Several manufacturers discussed focusing on a combination of solution and price. One response stated that “About 40% are just looking for the best price / fastest delivery and about 60% are looking for product adjustments for their processes. At the distribution level, we did find that price and quick turn around on quotes are very important.” Lead times, price and sourcing for alternate products are frequent conversations with customers. While customers are very price sensitive, they are also looking for products that are easy to install and design conscious. At the same time, if companies (those typically smaller) can easily design (or redesign) and manufacture a custom product for a customer, they will win a project over a larger manufacturer that can’t accommodate (or have interest in) those customizations.
Are companies focusing on new sales channels?
57% said they are not making changes to their existing sales efforts and paths to market.
Some manufacturers are focusing on new and emerging technologies. A focus on technical sales presentations direct to the end user, specifying engineers and EPC firms is the new norm, with less emphasis on the distribution channel. 43% said they are focusing on building these direct relationships to increase their specifications in the coming years. They will bring those specifications back to their rep agencies.
Has there been a shift to hiring salespeople with a more technical background?
27% of manufacturers responded that they prefer to have salespeople that are more technical. It is best to find a salesperson who can answer questions quickly for the customer relative to engineering and manufacturing capabilities, customer service or quotations. Technical sales doesn’t always mean they require an engineering degree. Finding a degreed engineer who can present and close sales is not always easy to find, but a recognized growing trend for the future. While an engineering degree teaches you what questions to ask and where to look to solve problems and determine if your solution makes sense; it does not necessarily teach you how to close the sale. Bottom line…manufacturers are looking for salespeople focused on solution selling, not just selling SKU’s.
73% responded that they when hiring salespeople, they are looking for the best talent regardless of their technical skills. They prefer someone that understands and can manage the dynamics of selling and that are problem solvers.
What new marketing strategies are companies employing?
Nearly all manufacturers, 93%, said they have increased their marketing budget including hiring senior or VP level marketing team members and have pushed more into a digital marketing strategy. Focus has shifted to social media posts, creating short videos highlighting their products and solutions that are posted to LinkedIn, YouTube, etc. and sent to their rep agencies. These short videos discuss new products, new features to existing products, installation techniques, etc. Manufacturers are taking the time to redesign their website and focus on corporate branding.
A few manufacturers mentioned that they now feel tradeshows are a waste of time. One VP said they are setting up interactions via Zoom with customers that provide a much personal connection than a trade show event can offer.
Manufacturers are also focusing on new product introductions or listening to their customers’ requests to make improvements on legacy products.
Overall, most responded that salespeople must evolve. You will not be having lunch, playing golf or just checking in during the pandemic. COVID has required many to go back to basics. Accelerate the sense of urgency, strong outbound contact efforts and follow up, and doing sales the good old-fashioned way as they employ new ways of presenting themselves to the customer. These customers want solutions to their problems but require a reason to set up a ZOOM call or schedule a meeting.