These new constituents are often those closest to the point where your products and services provide the greatest value to their clients. How are manufacturers and distributors adjusting their go-to-customer models to position themselves for future growth?
To address this evolution, manufacturers and distributors are beginning to alter their sales model to include pre- and post-sale service team members. This holistic approach to customer relationships outweighs a transactional sale. In fact, we have found that in the highest-performing organizations, marketing, sales and service team members collaborate to build solutions with expanded upsell and cross-sell opportunities identified throughout the buyer journey.
To better understand how executives are managing this cross-functional cultural disruption and the acceleration of solution selling-driven technical advancements, such as IoT and selling “X” as a Service, Alexander Group recently held the second of four virtual roundtable sessions formed exclusively for manufacturers and distributors.
Executives from leading organizations shared insights and obstacles to three key questions as they seek to solve the complexities of a solution-selling model:
Changes in Buying Perspective
Participants agreed that they are all spending more time building closer relationships with their clients across a continuum of touchpoints. Buyers demand even more custom solutions as they rely on just-in-time data and insights to improve production efficiencies. Further, simply landing a customer with a differentiated product is no longer a way to generate sustainable revenue. Rather, creating a deeper relationship with a holistic team provides the opportunity to gain access and engage more broadly with customers.
Most executives pointed to product complexity as a key factor for the need of pre-sales specialists and post-sales service technicians. What was once provided on an ad hoc basis for clients, technical experts are now supplying extensive data, which offers additional insights for the client and opportunities for XaaS sales/recurring revenue products.
Many discussed the adoption of what is common in the tech world where customer success roles carry a quota and are held to sales “excellence” standards. Executives indicated that these new dynamics call for a different skillset from sellers, as they need to transform from selling one constituent to a suite of solutions connecting multiple functions. They noted that these complex solutions often require a different, higher-level client conversation, thus greater skillset.
Changes in Roles and Incentive Compensation
How long does it take to develop the right sales team? Who should the talent be and how do we find them? These challenges were of utmost importance to participants. Consensus was that traditional sellers are too comfortable with old products, causing a bottleneck with selling new products and solutions to customers.
One executive described turning their traditional service technician roles into a leading force for new product innovation. These individuals, closest to value proposition delivery, are now charged with co-creating the next product offering alongside the client. By empowering these service technicians and creating collective accountabilities for both project and service teams, they have reduced product development cycles and increased new product introduction ROI at a pace never before seen in the organization.
Compensating these new roles and functions, however, is difficult. Unique sales compensation plans are needed for XaaS/recurring revenue, consumable products with little margin, direct vs. indirect sales, inside sales and e-commerce. All agreed that setting metrics that are measureable and well-communicated to the team reinforces accountability, but you cannot pay on what you cannot measure.
Finally, many suggested that product and service line expansion accelerates the need for more time and resources on pre-and-post sales roles. Executives agreed that a successful transition relies on leadership articulating the right team message, outcome and incentive compensation equation to accelerate the transformation.
Participants all held the same opinion―the transition to team selling is a cultural disruption, but it is the core of the new manufacturing and distribution world. Family-run distributors and 120- year-old global manufacturers alike agreed that a more modern and coordinated approach while maintaining close customer relationships is vital to remain competitive.
All participants encourage change adoption participation throughout the entire firm. Those most successful make this cross-functional collaboration a permanent part of their culture.
Key to success is persistent and clear communication to help facilitate full understanding of why the change is happening and the target results. More importantly, sales leadership must have the capabilities to deliver the message and the resources to retrain as needed for new skillsets, roles and responsibilities.
For additional insights, please participate in the upcoming AGI Manufacturing and Distribution Virtual Roundtables. This, and other relevant events, are part of Alexander Group’s 2019 Leadership Series that allow senior sales, marketing and sales operations leaders to share knowledge and take away best practice approaches. Sign up today for upcoming AGI Manufacturing and Distribution topics, which include:
1. Join the Conversation!
Our manufacturing and distribution virtual roundtable session focus on the changing buyer journey, and what to do about it. Next session: aligning sales compensation to solution selling growth goals.