Alexander Group Principal Kyle Uebelhor discusses part one of a three-part series of changes caused by customers affecting the manufacturing industry. Part one dives into new strategies around portfolio selling.
Hi again, it’s Kyle Uebelhor, one of the leaders of Alexander Group’s manufacturing vertical, and I’d like to introduce today the three major topics that we are seeing throughout our work with many industrial organizations these days. These three topics bring the notion that organizations are going through significant change caused by the customers, which is creating new behaviors and new strategies around first, most importantly, increasing a focus on portfolio selling. Secondly, what we’re noticing is there’s this need for optimization of internal structures to develop differentiated growth. Differentiated growth means I’m going to grow more than our competitors. And then finally, the nature of industrial manufacturing these days is requiring global organizations to deploy more complex sales models. Not every dollar is a good dollar, so let’s maximize our expense to revenue ratio going forward. So over the course of the next several podcasts, we’ll be talking about these three topics. But today I wanted to delve deeper into our first major bullet. And that is, how are organizations increasing focus on portfolio selling? Filling the factory is no longer a strategy. Sales and marketing and service functions within an organization now have to coordinate efforts to inform voice of customer insights so that the right customers get the right message at the right time in relation to all of your brands. And historically, we’ve noticed that a siloed functionality between those three groups, sales, marketing and service, has created barriers or boundaries that inhibit the idea of creating a better and more solution-oriented portfolio offering to customers.
What are people doing about this? Well, they’re listening, using voice of customer insights that are garnered through front line managers, through the sales team, and through direct outreach to ensure that what products are being bundled together, what new offerings are being created by a product development team first and most importantly, have an end-user profile in mind so that we’re aligning our value propositions well in advance of creating the widget. In addition to that, people are using very good metrics, making sure that the metrics to plan, execute and monitor both revenue and profit performance across the portfolio of products ensure that we’re actually getting the biggest bang for our buck. Think of it this way. Organizations need to track and measure from the ideation or concept design all the way through the close of an opportunity, and tracking those measures in a very discreet way is invaluable across the sales, marketing and service functions. The other thing that organizations are doing as they increase focus on portfolio selling is on the human capital side. You know, I’m oftentimes asked by my clients when we’re in front of them, “Do you know what a good seller looks like when you meet them? You know, are you able to judge what good looks like from just the results alone?” Many organizations are recognizing now, especially in the manufacturing sector, that the aging sales force is actually coming into a pending cliff of retirement.
And so not only do we have a demographic concern, there’s also a concern for the way that buyers are behaving differently. And we’re noticing that organizations are investing heavily in their human capital to not just increase sales capabilities or enablement through training, but to truly understand what a competency model looks like for their sales teams. Just as you’ve upgraded your engineering and lean capacities of your supply chain, your sales organization likely needs a tune-up as well. And to do that, you really start with, as I mentioned, a competency model, a model that says for each unique job type, there are certain sets of behaviors that we expect. This not only gives you a standard of what good should look like. It will also give your sales team members a chance to see a career lattice, not a career ladder, but a career lattice. And those are the multiple choices of a career path laid out in front of them as they think about their life with you as the manufacturing organization. And finally, in the near term, with sales talent as it relates to increasing a focus on portfolio selling, many traditional sellers do not have the capacity to sell the more technical elements of the Internet of Things that are coming online or the newest product offering and its application in relation to what your traditional products that might be.
So organizations are plugging the talent gap by leveraging both product and vertical specialist roles. These are unique jobs that are either product-oriented or vertical-oriented, meaning a person who understands an industry and understands the unique end-to-end issues faced by that industry. And these overlay roles, although expensive, tend to give you a lower risk, higher reward for the investment. To upgrade your talent in the near future and the coming weeks, we’ll continue to explore what we’re seeing organizations do, but if you were to think about first and foremost, the idea that you are a manufacturer of solutions and not a manufacturer of products and increasing your focus of your team across the whole portfolio, we know it pays dividends. The connectivity between your marketing, sales and service functions is more important now than ever, and those silos need to be broken down. Additionally, you’re likely to have a talent issue. Invest in the lean type efforts to think about your sales talent on a go-forward basis. If you’d like to learn more about how to increase focus on portfolio selling or some of the other insights that Alexander Group has through our benchmarking and our research, we’ll be glad to schedule an in-person briefing. Please visit alexandergroup.com, and we’ll look forward to speaking with you again soon.