During the past years, CRM has been a strategic initiative, and unfortunately often just a buzzword for companies to extend IT operations for their salespeople. In following this hype, companies often forget the real deal when deciding on their CRM vendor. Working with customers and prospects in the contract manufacturing and high-tech industry for years made me realize one thing: When it comes to this industry, a standard CRM system doesn't do the job. Although some of the big players in the market such as Salesforce.com, SAP Hybris or Microsoft Dynamics are suitable for some B2B verticals, for contract manufacturing and high-tech there is still a big gap between the offering and the real needs.
As a sales manager, you should consider buying a standard CRM system when the characteristics of your (intended) sales process fall into the following buckets:
In this case, a standard CRM helps you with a firework of features to track and monitor your sales team. You build up a customer database and can analyze best practice sales approaches by the data entered in the system.
A standard CRM is a perfect match when you push your products into the market in a B2B environment.
Lately, we have been observing movements in the CRM market where sales force automation even resorts to a webshop base for omnichannel services to the customers. This is great when your industry has the following characteristics:
As a result, standard CRM and Omnichannel solutions are a good fit when you sell one final product or services ranging in a B2B market and have proper branding and marketing. But do those characteristics also apply to your sales process when you are in contract manufacturing or high-tech industry?
Having experienced many customer projects in contract manufacturing and high-tech, I observed the following:
This business is rather about winning the bidding process of the RFQs (Request for Quotations) that are initiated by the OEMs. Also, there are no cross-sell or up-sell options, as a contract manufacturer offers the service to build products for an OEM, and there is no suite of products to be offered. In summary, you could say that “Contract manufacturing is a difficult, competitive, low-margin business.” where you can’t just push your products to the market. Rather isn’t your sales team busy receiving Request for Quotations (RFQs) which contain a complex Bill of Material (BOM) structure, drawings, and other specs explaining in detail how the components should be produced as devised by the OEM? There is high competition amongst contract manufacturers resulting in the OEM being price sensitive. Aiming to improve your sales process as a contract manufacturer or precision engineering company, your focus needs to be on the most labor-intensive step of the sales process which is the creation of the Request for Proposal.
The above-mentioned characteristics show that in the contract manufacturing and high-tech industry different challenges need to be tackled to achieve a competitive advantage in the sales process.
Experiencing these challenges and comparing them to the business scenario that standard CRMs are aiming to support, you can certainly confirm that there is a significant gap.
But how can you fill that gap without disrupting your sales process by using numerous tools? You should have a look at specialized CRM systems for your vertical with emphasis on what cures your biggest pain points. Detailed costing and quotation engine should be at the system's heart. Enabling simulation on changes of cost parameters and building scenario analysis can be a game-changer for your business.
My advice is to get started with a database for your RFPs in order to analyze and continuously improve your sales operations. Considering the importance of collaboration, you need to empower your quote contributing parties with relevant data access, keeping in mind that different roles need different views on the data to work efficiently but still compliant. However, there are certain features a standard CRM offers that you shouldn’t be missing such as:
a) Basic Account and Contact Management
b) Lean Opportunity Management
c) Quotation Management
d) Analytics for Sales Insights
Next to enabling a quick on-boarding and avoiding the disruption of your existing process, a sales system should fulfill the following requirements as well:
When it comes to analytics, a standard CRM usually comes with huge reporting capabilities with a focus on:
Considering that you operate in a business with slim margins, your focus should rather be on analyzing those for different customers and successful quotes. These analytics will provide insights on how to better protect your margins by certain markups while retaining a higher chance of success for your RFQs. Yet, with a specialized CRM system, you want to make the move to gain transparency on the RFQs created, and also get a notion of the chance of success with certain customers to focus selling time efficiently.
Supporting the sales force with CRM functionalities and hence improving the whole sales process is a step even contract manufacturers or high-tech businesses with a strong existing customer base won't be able to avoid much longer. Slim margins and a tight economy force these businesses into automating at least parts of their sales process in order to keep pace with their competitors. Aiming to shape your sales force, you should pick a system you want to invest in carefully as a standard CRM is not built for your needs.
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