Industrial sales are a function in companies that can be more demanding and complex than other selling roles and often leaves salespeople with little or no time to sell.
Although industrial sales have some aspects similar to other industries selling B2B, a few things make the role different from those selling supermarket lines, wholesale products, technology or services.
Industrial sales sell products and equipment that customers use to build machinery and assemble equipment. Their audience is factories, assembly, and manufacturing businesses.
The sales team structure has stagnated over many years, with one person central to the customer relationship. The position description for someone in industrial sales remains focused on relationship building, customer retention and servicing their customer’s needs.
This stagnation can be reflected in the company’s topline performance, with only a couple of points of growth year on year. The growth is predominately gained through customer growth rather than new business. Companies are at constant risk of aggressive competitor behaviour taking their limited growth opportunities away.
With the account managed by one person and that person having a customer list, they are responsible for their time management. They are pressured to meet all the requirements of growing each account and new business development.
Other industries have been able to unbolt functions from the salespeople and have them taken up by customer service teams, inside sales and field service personnel.
Some companies with an industrial sales team are making the shift and removing the over-reliance on individual salespeople to manage and retain customer relationships.
Let’s look at the challenges faced by industrial sales team models:
Expert Knowledge
The knowledge required to excel in industrial sales often is embedded in engineering, fitting and turning, and other manufacturing-related education. Although many industries have experienced a shift to buyers finding answers to their questions online, there is still a high need for expert knowledge in the industrial markets. Potentially 50% of buyers’ queries are answered online, and then the salesperson must source customised solutions.
Therefore, salespeople need expert knowledge to discuss customer problems, find solutions and make recommendations. The knowledge communicated during the meetings builds the confidence in customers to make the purchase. Those conversations are about building rapport and credibility with customers as the go-to company for their solution.
Where salespeople lack that expert knowledge, their likelihood of securing new business is lessened as buyers fail to gain sufficient confidence to progress.
In technology sales, a pre-salesperson will be engaged in the sales process and build confidence alongside the salesperson, whereas the industrial seller is most likely going it alone.
To increase their new business acquisition rates, industrial companies must consider the pre-salesperson model.
Complex buyer decision-making
The salespeople are often talking multi-million-dollar sales with a long tail of purchasing following the initial order. The goods become a part of the manufacturer’s products they produce or assemble for their customers with specifications that make changes or replacements difficult.
The customer examines all aspects of the presented solution and has multiple people involved in the review process. They need to ensure the solution is going to meet all their requirements. This means the salesperson requires many meetings to win the business.
The time salespeople invest to gain the first order can be months or even years. Throughout the whole process building the rapport and credibility to be the buyers and influencers for when the time to purchase arrives. With several opportunities in play, this is extremely time-consuming for salespeople.
The largest barrier in the sales process for an industrial sales team is that the final decision is diverted to a tendering process to ensure the best value for their purchase. Although this does not mean the salesperson has lost the sale, it does mean there is still much work.
Rigorous Acquisition Process Through Tendering
When the buyer puts the opportunity out to tender, salespeople must focus on selling, as the content of the responses to the tender questions becomes vital to winning the business. If the tender writing is passed off to someone, the risk of losing important information in the response can be problematic.
You have invested time and energy with the customer, and ideally, the tender is written to your product’s specifications giving your company an edge over the competitors. This can work well where your products have unique components and capabilities.
If your product is more generic and competitors can offer equal quality offerings, the tender process becomes a little trickier.
Salespeople must be involved in the tender writing process, which takes them away from selling to other customers. However, suppose a pre-sales person has been involved in the opportunity from the early stages. In that case, they can be involved in the tendering process, freeing up the salesperson’s time to engage with other customers instead of tender writing.
Proposal Writing vs Quoting
Proposal writing is similar to tender writing. There is always a document that has to be produced for any sale to proceed. The proposal can be a complex document that confirms all the technical requirements of the buyer’s purchase but still requires sales content addressing the motivations and reasons the buyer will purchase beyond just the technical information and price.
A good proposal can change the outcome in your favour, even if you are a little dearer, just as a bad one can put them off completely. A good proposal is just that; a good proposal. It is not a contract. They take time and care to put together.
Industrial Sales Teams Have Fewer Customers
Industrial sales teams have a customer base that is typically smaller than other products sold in B2B markets. This is because fewer companies are manufacturing or assembling goods. As a result, sales representatives have fewer opportunities in their pipeline which puts more pressure on their ability to win deals. Therefore, they need to be aware of what is happening in the market and always be proactive in finding opportunities.
Salespeople need to comprehensively understand their customers and any plans they have for new product development or changes in specifications. The sales process still requires a degree of a working relationship with the decision-makers and influencers; as long as that relationship progresses, the business outcomes.
Customers are typically more loyal as they can have products specified into the overall product they sell or have a customer base that requires consistent supply chain management to meet their business outcomes.
With a low number of customers, the sales territory for an industrial salesperson is often quite large as they work to capture sufficient companies to support the efforts of a full-time salesperson. As a result, the competition is high, and companies are often located offshore, making it even harder to know their activities in the market until it’s too late.
The travel time for industrial sales can be up to four times greater than in other industries. Travel time can eat away at productivity for salespeople.
Industrial Sales Require Account Management
Winning business in industrial sales can mean the signing of long-term contracts. It can also mean being locked out of a company or market for many years if you don’t win the business. Once an agreement is secured, it takes a lot for companies to change suppliers. It is a complex process of selecting, testing and purchasing the inventory for the equipment they manufacture or facilitating their day-to-day operations.
Buyers continue purchasing and renewing their contracts with you if the product works for them. This requires strong account management to retain the business and be ahead of any potential upsets from changing decision-makers and influencers or supply chain issues putting a spotlight on your company.
Consistent communication that improves the relationship and the value given to the buyer is important. This locks competitors out of the account.
Summary
With all these factors taken into account, it is clear that there is a need to change the structure of sales teams and free up existing salesforce capacity to focus on customer prospecting and relationship management activity. The old to-market model no longer supports the workload and demand of business today.
Using pre-sales personnel for technical expertise and tender proposal writing is important to complement the functions of the salespeople. Quite commonly, the skillsets required for selling and tender-proposal preparation are not the same.
Reviewing your sales team’s activities and having focused personnel at critical steps of the process can support driving growth in an industrial sales team.
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