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The holy grail of CRM and Digital Go-to-market in Manufacturing

Posted by Falk Brauer on Apr 23, 2019, 8:48:45 AM
Falk Brauer
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So what is so difficult about CRM and Digital Go-to-market in manufacturing? Or better why do so many of my customers ask for a quotation or costing software and specifically say they are NOT interested in CRM? “Tried that in the past, but did not work”, is what I heard over and over.

Is it because they equal Salesforce with CRM? Well, that might have been a simple equation a while ago, but nowadays, CRM is NOT about contact, activity and opportunity management only. It is all about your customers, what and how they buy from you and how their journey unfolds. So if your sales is about manufacturing products, than your manufacturing processes become a major part of your CRM. The most extreme case is certainly contract manufacturing - but let's start with the simpler stuff.

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I recently watched the 1992 movie Glengarry Glen Ross when it hit me: Alec Baldwin's pep talk is not just chasing sales men, he is summing up CRM : “AIDA. A Attention. IInterest. D Decision. A Action. ABC. A Always, B Be, C Closing. Always be closing!”

The story of the price and the ERP - or do you really quote from ERP?

Can someone tell why the most advanced companies in the world quote from ERP? Even though that is the last place on earth a sales person should be hanging around. Easy, that is the place where invoices (should) come from. It is the sacred system that knows all about your costs and prices, about different price lists, variant prices, account discounts, shipping costs and taxes, not forgetting stock and delivery times - and of course this is all differently calculated and maintained across regions and sales channels. No point in bringing this into Excel price lists or rebuilding it outside of ERP - like I have seen so often.

It simply does. not. scale.

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Years of man-power went into your ERP. The magic happens if you can use all of your ERP's data directly in a CRM, customer or distributor portal - so you can easily apply AIDA- Attention, Interest, Decision and Action.

You believe that industrial machines are complicated - you have no idea. But sell them simple.

Unfortunately ERP does not know all about your products. For industrial machines it is not only about the product as such, there is so much more in its context.

But let's start with a basic machine: it consists of some basic internal components, features you can buy in addition, and components that you sell separately and which are assembled outside for a start - and all off these factors depend on each other.

Using SAP Variant Configuration for the basic things really helps in simplifying your back-end processes. Still, you want to have popular, fixed product variants which you can easily produce to stock and identify by one material number. ERP can do all this, but bringing it to the front-line or even in front of the customer is not so easy. But do no try to mix up accessory and base machine configuration in ERP. I’ve seen it failing too often.

I say, all the knowledge about recommended features, additional components and other cross- and up-sell opportunities belongs into a CRM. Plus, you actually do not want the customer to ‘program’ a machine's features. You want to allow your customer to speak in his language, his machine requirements, not your machine configuration lingo. Easier said then done.

You also might want to sell a whole production line - that is where the real value kicks in - your chance to excel above your competition in terms of user experience and conversion. Give the user the ability to directly enter his desire in terms of the products that he wants to produce (not your product specification) and allow a system to figure out the best combination of machines and components for him.

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SIMPLE - the simpler your complicated product appears, the easier it is to get a user’s (and buyer's) Attention, Interest, Decision and Action.

Last, do not forget about a major part of your business: consumables and spare parts. In some verticals machine consumables are already more than 50% of the total revenue and an even bigger share of the profits. What a customer is looking for are repeated consumable orders for HIS machines (not all), for the price that he agreed - easy, quickly and intuitive - AIDA. And he should better be able to see delivery times because consumables are critical for you customer's operation. Otherwise he might get it somewhere else - lost opportunity. Same for spare parts, but in addition a system needs to know the exact version of the machine to ensure that the spare parts fit.

Selling components? Rather sell solution visions.

Oh, you are selling machine or product components and your customer does not care about your component’s specs, but only about the solution he wants to build? Say your customer wants to build a machine or has an electrical or physical problem to solve in a project. It is not helping the deal to give him thousands of pages of product specs. What you want to do is take his problem spec and run this through a system which gives him a 95% ready solution that works as per your component specs AND has one, or even better HIS price.

From there you two can drill into the details. And if such a system exists, you can give it also to the customer directly. And NO, this is not about saving your time by giving it to the customer, it is a strategic advantage - TOP-LINE!!! - the customer got his solution and price without engaging any of your staff, while the competitors are still shoving through their catalogs with a calculator in their hand (or sitting in front of a specialized CAD).

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You like it difficult? Sell specialized & customer-specific products

So, finally we reached specialized products, which is a catch-all for every business that designs and produces parts, mostly components, purely based on customer specifications. Examples are contract manufacturing, precision engineering or to a big extend automotive and medical equipment suppliers.

In those businesses your marketing is centered around your manufacturing equipment and experience, but your sales is focused on parts that are designed to the customer needs. They are aiming to achieve the lowest possible price - since it is often a build-vs-buy business case. The customer will send his technical documentation and your sales' job is to answer as quickly as possible with the best offer that still promises making profits for your business. Yes, this is CRM too.

For those kind of offers your CRM needs to know everything about your manufacturing equipment and costs, raw material costs and overall cost structure within your plants. Nothing which you can do with "your grandfathers'" CRM. On top of that, there is so much interaction of your internal cost managing departments - from design over production to purchasing and finance with the customer - you better have this on-system to provide the best buying experience across the competition.

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So what?

There is so much more to talk about. But let's keep it to that level. Selling manufacturing products is very different from selling services or financial products. And your CRM better caters to this if you want to see it being used - which is crucial for your business and forecast mechanism. Most importantly with the right tools you can offer the best buying experience across the competition and more easily support a potential customer in his buying journey.

Let's wrap this up with the help of Alec Baldwin again:

"A- Attention, I- Interest, D- Decision and A- Action. [..] You got the prospects comin’ in. [..] Sitting out there waiting to give you their money! [..] Are you gonna take it?"

Are you prepared to take it?

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Falk Brauer

Written by Falk Brauer

Falk is heading In Mind Cloud's Global Pre-Sales and Centre of Excellence for “Manufacturing X”. Knowing our customers from every angle, Falk does not only understand the most complex business processes and models, but, together with our customers, develops a path to sustainable growth via technology and digitalisation.

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