What is in this article?:
Sales channels are an often overlooked yet very important part of the sales program. If you have been losing orders or market share it may be that you don’t have the right channels to fit specific customer needs.
Globalization, outsourcing, and foreign competitors have caused a revolution for American manufacturers. It began when the Fortune 500 companies began to reorganize themselves, source from foreign competitors and lower their costs. These same large customers began to drive cost reduction from their vendors any way they could. Customers wanted more products and services at lower prices.
From the perspective of suppliers who sold them capital equipment the world of machinery sales changed beyond recognition. The buyers were issuing 50% more specifications with each Request for Quote (RFQ) on capital equipment which increased factory time and the cost of quotations.
Increasingly buyers did not want to buy just a machine; they were interested in companies that could propose and manage complete systems.
Suppliers also realized that customers were selecting foreign products over U.S. made products more and more every year and many of the customers wanted the American supplier to build his product overseas and pass the savings on to the customer.
This revolution caused by globalization was not limited to customers and their supplier companies. It has also caused great changes in sales channels. For instance, customers no longer had the central engineering departments they once enjoyed and began relying on the suppliers sales force to provide the services they used to do in their own engineering departments.
Multi-national companies would not allow independent reps to call on them at their headquarters. They wanted direct engineer to engineer connections. And most importantly the buyers became more demanding and sophisticated and wanted sales people who could answer all of their technical questions. If the rep appeared to know less than the buyer, he would be eased out of the selling game.
All of these changes really affected independent reps and distributors whose selling efforts were based more on personal selling and relationships to customers. In many instances the old selling approaches no longer worked and these rep and distributor firms needed to rethink their business models in terms of new customer demands.
Harry Brown of Mollo and Associates in Erie, Pennsylvania says that the biggest change in selling is that customers want problem solvers and expert advice. He calls the new type of rep a sales engineer “who can offer engineering assistance as a ‘freebie’ with the sales package. In addition to the engineering perk, if manufacturing knowledge (experience) is offered it will enhance a long term relationship.” He goes on to say that “being a pleasant person with a great personality will not carry the day in today’s environment.”