The Manufacturing Challenge From Smart Machinery

By: John Drosos Manufacturing, Technology Sales

Alexander Group (AGI) clients and industry survey participants cite innovation and technology as the biggest drivers of change to manufacturing sales models. Technology is disrupting all sectors of manufacturing. Leading industrial giants realize that they have to learn how to sell intelligent and fully connected machinery in order to not only survive but thrive in the tidal wave of current innovation.

Opportunities and Roadblocks

According to a top executive AGI recently spoke with, “Manufacturers are waking up and starting to realize that this phenomenon will happen with us or without us. Once you get a customer locked in to your ‘intelligent equipment’ and vast array of services, you have a customer for life.”

Despite the clear opportunities technology provides, nearly all manufactures at the fore of this trend face the following challenges:

  • Manufacturers have lower margins (30-40 percent) compared to technology firms and are less willing to invest in R&D, sales and support to develop the capabilities to sell in the new environment.
  • Top executives have limited commitment to and knowledge of how to sell ‘technology.’ They view their business from the lens of selling tangible products, not complex solutions and services.
  • Sales leaders wrestle with the complexity of a high-tech sales cycle and struggle to field, much less manage, the added sales and enablement resources they need to be successful.
  • Manufacturing organizations tend to be siloed around ‘product’ or purely geographic-based sales models, greatly limiting their ability to sell complex, high-margin products and solutions.

How to Win in the Connected World

Manufacturers who want to thrive in the new environment have to think and act more like high-tech firms. This requires a fundamental cultural realignment around innovation and customer needs to appreciate the full value that intelligent and connected machinery can provide. Senior leaders have to live, breathe and, importantly, invest in innovation. From this baseline, they can then drive necessary sales model changes that will include:

  1. Stronger alignment between R&D, marketing and sales to speed adoption of new products and solutions
  2. Well-articulated, clearly supported innovation value propositions to support a higher-value, more complex sale
  3. Significant investment in sales specialists and sales enablement tools to align with longer and more complex sales cycles
  4. A talent upgrade supported by better recruitment, new sales compensation programs and in-depth training to field technically savvy, customer-oriented sellers

AGI manufacturing clients are aggressively building out innovation-focused sales models. If you would like to learn more about this topic, please reach out to our Manufacturing and Technology vertical leaders.

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John Drosos

John Drosos is a principal in the Chicago office. He serves as a national lead for the firm’s Manufacturing and Distribution practices and the Midwest lead for the Technology practice. John has been with the firm since 2006 and brought with him diverse experience in strategy consulting, general management and technology consulting. John is a key thought leader on complex sales model transformations, global coverage strategies, productivity and analytics.  He has also helped shape the firm’s talent recruitment and development practices, playing a key role in the rapid and consistent growth of our Midwest consulting practice.

Prior to joining the Alexander Group, John worked as a general manager at Home Depot and as a consultant at both Bain & Company and Andersen Consulting (now Accenture). John holds an MBA and a B.A. from Harvard University.