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Six Critical Steps

for Manufacturing Companies to Increase Sales Productivity

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In an ever-changing innovative economy, it is crucial for manufacturers to constantly improve their sales processes to continue meeting custo-mers’ growing expectations and to ensure that they em-ploy modern tactics to acquire new clients.

Based on the findings of the McKinsey Global Institute1, “Across manufacturing industries, the use of big data can make substantial im-provements in how companies respond to customer needs.” However, the use of “big data” for sales purposes is not as spread out among manufacturers as one may think. For instance, in the Quebec aerospace industry -

one of the biggest manufacturing clusters in Quebec2 - only one company out of five uses Customer Relationship Management (CRM) technology to drive sales productivity. This may be attributed to a lack of knowledge re-garding the potential benefits of using CRM software within the manufacturing industry. This white paper aims to demonstrate how, by following six simple steps, manufacturers can rise to this challenge.

This paper explains how to boost sales and enhance sales productivity specifically in the manufacturing arena. The document provides actionable recommendations for the diffe-rent stages of the sales process, from iden-tifying new qualified leads to assessing custo-mer profitability. Let’s explore the role CRM technology plays in helping manufacturing companies leverage “big data” to become more competitive.

Introduction

1 McKinsey Global Institute, Manufacturing the future: The next era of global growth and innovation, http://www.nist.gov/mep/data/upload/Manufacturing-the-Future.pdf, 2012.2 CEFRIO, CAP VERS L’ENTREPRISE NUMÉRIQUE - Portrait de l’utilisation des technologies de l’information et des communications dans l’industrie aérospatiale québécoise. http://www.cefrio.qc.ca/plus/pme-2.0-aero/portrait-numerique/index.html, 2014

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Identify new potential leads

Increasing sales productivity starts with assessing how effective a company is at engaging with potential customers and adapting its sales techniques to their changing needs.

Do you know that every second, two new professionals join LinkedIn? Do you know that the fastest growing segment in social media last year was the baby-boomer age group? For Twitter, it was the 55-64 year age bracket, while for Google+ it was the 45-55 year age bracket. From groups to blogs to job listings, these platforms are rich sources of informa-tion and a medium for conversation for those who want to connect with others in their in-dustry. Though traditionally social media have

been perceived to be used only by the youn-ger generation, it seems that they are also increasingly catering to baby-boomers and decision makers.

Targeting prospects efficiently can be dif-ficult due to the overwhelming amount of social interactions. This is why a growing number of marketers and salespeople use social listening tools offered by certain CRM software. For example, a manufacturer of train electronics has managed to land a huge contract with one of the world’s largest train manufacturers just by analyzing a social dis-cussion about a technical challenge that the train manufacturer was struggling with. Once the train electronics sales executive demons-trated an understanding of the train manu-facturer’s challenge, they were able to esta-blish a call (off the social world) that later on resulted in a long-term business relationship - using CRM social listening tools.

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Once manufacturers have identified poten-tial leads, the challenge is to approach them. Customers are less interested in interacting directly with sales representatives, especially not during the early stages when they are just doing research. According to Gartner Re-search, customers will manage 85% of their interactions without talking to humans by 20203. As customers are becoming more au-tonomous, it would be beneficial for manufac-turers to find new ways to engage with them. Using marketing automation tools, marketers and sales teams are able to respond in a more systematic manner to prospects’ signals of interest. For instance, some CRM software tools enable companies to set up alerts whe-never prospective clients register to receive marketing material on a website (e.g., down-loading a brochure). The alert could trigger the sending of another email two days later with a case study that relates to the product brochure that was downloaded. A week later, a webinar invitation could be sent to learn

more about the benefits of the product. Through these interactions, prospects would receive content they are genuinely interested in and, based on their response, manufactu-rers would be able to define their level of in-terest and how likely they would be open to a conversation regarding their product.

By facilitating social listening and lead nur-turing through marketing automation, CRM software enables manufacturers to better identify prospective clients and approach them in ways in which they feel comfortable to communicate.

1According to Gartner Research, customers will manage 85% of their interactions without talking to humans by 2020.

3 Gartner Research, Gartner Customer 360 Summit 2011, http://www.gartner.com/imagesrv/summits/docs/na/customer-360/C360_2011_brochure_FINAL.pdf, 2011.

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Leads are good, but sales are better. Once new qualified leads are acquired, the objective is to forecast sales and achieve an optimal sales conversion rate.

Many manufacturers lack control over their sales channels, whether it is their satellite sales offices or their distribution network. Based on recent McGill research4 (see chart 1) only 38% of the surveyed Quebec-based ma-nufacturers have control over the majority of their distribution network.

In order to gain better control, companies need to establish insights regarding the pi-peline of their sales channels. They can en-courage sales offices, distributors, resellers, agents and value-added resellers (VARs) to

use their CRM system to report their pipeline on a regular basis. By centralizing customer data, manufacturers are able to gain a direct view of their sales pipeline. CRM software tools include sophisticated real-time sales reporting which provides the ability to aggre-gate and slice the data multiple ways in the same chart. This enables sales executives to go beyond the simple question of pipeline vo-lume and to assess sales analytics such as sales inflow, outflow, velocity and potential bottle-necks. By integrating sales analytics into their distribution network, manufacturers are also able to identify discrepancies between actual and forecasted sales. Integrating CRM to a company’s distribution channels can be a very complex process due to the necessity for ne-gotiation with partners. However, manufactu-ring companies are encouraged to implement this path as they will benefit from significant savings in terms of time and money while gai-ning better visibility of the sales pipeline.

Get better visibility of the sales pipeline

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4 The Conference Board of Canada & McGill University, SME Manufacturers in Quebec: Adding Services to Boost Competitiveness and the Bottom Line, http://www.dec-ced.gc.ca/docs/pub268-eng.pdf, 2012.

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CHART 1 Ownership of Distribution Channels (percentage of films; n-110)

0%Less than 40%40-80%More than 80%

Note : Respondents were asked

«Approximately what percentage of ownership does your company possess over the distribution channels?

Source : McGill University

2Based on recent McGill research only 38% of the surveyed Quebec-based manufacturers have control over the majority of their distribution network.

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Sales analytics are not only used to better view the sales pipe-line, they can also be applied to foreseeing customer demand and to constantly improving the customer experience.

In a survey of manufacturing executives, KPMG (see chart 2)5 have found that the top three challenges to innovate are: lack of mar-ket knowledge, incomplete understanding of customer’s needs, and shortage of innovative ideas. Between 50% and 75% of the execu-tives surveyed by PricewaterhouseCoopers6 declared it was a priority to innovate in order to create new value offerings in 2014. In order to develop new products and services, manu-facturers must have a strong understanding of their customers’ changing requirements and circumstances.

By using sales analytics, manufacturing com-panies are able to identify untapped offering opportunities, such as developing relevant services based on their customers’ needs and difficulties. PricewaterhouseCoopers found that the 20% most innovative manufacturing companies experience 28% higher growth than the least innovative ones. When asked for their plans to innovate, 95% of industrial manufacturing executives say their compa-nies have plans to collaborate with strategic partners over the next three years. That’s not all. They’re planning to work together with their customers, suppliers, academia, even with the competition—to spur innovation. Using sales analytics collected by CRM tech-nology, companies can foster product inno-vation through co-creation and collaboration.

Leading manufacturers also use sales analy-tics to identify under-served customers, to increase up-sell and cross-sell opportunities.

Foresee customer demand and enhance the customer experience

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5 KPMG International, Canadian Manufacturing Outlook 2014: Leveraging Opportunities, Embracing Growth, http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Documents/4504-Canadian-Manufacturing-Outlook-2014-web.pdf, 2014. 6 PricewaterhouseCoopers, Rethinking innovation in industrial manufacturing: Are you up for the challenge ? http://www.pwc.com/en_GX/gx/industrial-manufacturing/publications/pdf/pwc-rethinking-innovation-in-industrial-manufactu-ring-are-you-up-for-the-challenge.pdf, 2013.

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With CRM software, companies are able to analyze their customers’ purchase history to identify sales patterns. The generated in-formation can be used to suggest additional products/services related to the purchased product, or offer recommendations for fur-ther purchases. The purchase history also gives precious clues about the purchasing cycle stage that a customer is in. This makes it easier for sales personnel to deliver tailored follow-up offers.

Better foreseeing of customer demand also has implications for supply chain manage-ment. By leveraging the data collected in the CRM solution, manufacturers may build a Sales, Inventory, and Operating Plan (SIOP) to address customers’ needs in a timely man-ner. For instance, operations managers can forecast product demand surges in a specific segment, at a certain time of the year. This process enables manufacturers to anticipate the required supply capacity much more ac-curately, ensuring a satisfactory customer ex-perience through prompt delivery.

Source : KPMG, Canadian Manufacturing Outlook 2014: Leveraging Opportunities, Embracing Growth (2014)

Lack of knowledge of potential new market areas

Shortage of ideas to drive innovation 18%Incomplete view of difficulty understanding the needs of our customers 20%

29%

CHART 2 Challenge to Innovate

3PricewaterhouseCoopers found that the 20% most innovative manufacturing companies experience 28% higher growth than the least innovative ones.

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Once companies have a 360° view of their customers’ requirements and expecta-tions, they can shorten the response time for Requests for Quotations (RFQs) by using CRM-based automated sets of standard rules during the quotation process.

This means that the turnaround time for stan-dard quotations to the client is reduced and sales executives are able to focus on other important tasks. Of course, not all RFQs can be automated. As demand for customized products and services continues to rise, it is vital to enable collaboration for complex quotation processes to address unique cus-tomers’ needs and personalized products. Made-to-order quotation is a time-consuming process and it requires input and approval from various functional/technical specialists, some within the company and some from ex-ternal vendors. By facilitating collaboration, manufacturers may, for example, automate the quotation workflow, making sure that feedback is received from all the relevant par-ties in a timely manner. By centralizing quota-tion data, sales efficiency can be substantially improved and customers will receive reliable quotes within a shortened timeframe.

Facilitate collaboration and engagement by increasing accessibility to data.

Streamline the sales processes through workflow automation

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In order to be effective and to close deals, they need to be able to access reliable and up-to-date customer data wherever they are, whenever they need it, which is where mo-bile and cloud technologies come into play. Gartner Research7 predicted that 70% of pro-fessionals will conduct their work through personal mobile devices by 2018, and that Software-as-a-Service8 (cloud) solutions could account for the majority of CRM applications by 2015.

Sales professionals in particu-lar are increasingly mobile due to distributed sales teams.

Facilitate collaboration and engagement by increasing accessibility to data

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7 Gartner Research, Bring Your Own Device: The Facts and the Future, https://www.gartner.com/doc/2422315, 2013.8 Gartner Research, The Gartner CRM Vendor Guide, 2014, https://www.gartner.com/doc/2679218/gartner-crm-vendor-guide-, 2014.

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As manufacturers continue to expand in-ternationally, cloud and mobile CRM appli-cations will continue to play a critical role in facilitating sales collaboration across multiple offices and countries. As the McKinsey Global Institute10 points out, “[Manufacturers] will be challenged to organize and operate in funda-mentally different ways to create a new kind of global manufacturing company - an orga-nization that more seamlessly collaborates around the world to design, build, and sell products and services to increasingly diverse customer bases. These organizations will be intelligent and agile enterprises that harness big data and analytics, and collaborate in eco-systems of partners along the value chain.” By providing team members access to real-time data, manufacturers can facilitate collabora-tion and standardize sales processes, thereby enhancing the effectiveness of their sales team.

According to a recent Accenture report9 (see chart 3), digital technologies not only contri-buted to increasing sales effectiveness, but they “are now poised to be catalysts and ac-celerators of business transformation.” Ac-centure has found that top-performing B2B companies outperform other companies just by seriously considering social, web, mobile and cloud technologies as “game changers”. The report highlights that there is a consen-sus among sales “masters” regarding the po-tential of these technologies to generate new revenue sources and improve engagement with customers, employees and partners.

9 Accenture, Powering Profitable Sales Growth: Five Imperatives from the 2014 Sales Performance Optimization Study, http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Five-Imperatives-Power-Profitable-Sales-Growth.pdf, 2014. 10 McKinsey Global Institute, Manufacturing the future: The next era of global growth and innovation, http://www.nist.gov/mep/data/upload/Manufacturing-the-Future.pdf, 2012.

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5Gartner Research predicted that 70% of professionals will conduct their work through personal mobile devices by 2018

TECHNOLOGIES SEEN AS «GAME CHANGER» BY PROFILE

DIGITAL (work, digital)- will significantly improve engagement with customers, employees

and partners.- will provide significant sources of new revenue for our company.

MOBILE- will significantly improve engagement with customers, employees

and partners.- will provide significant sources of new revenue for our company.

CLOUD- will significantly improve engagement with customers, employees

and partners.- will help to become more agile and flexible like never before.

86%

91%

90%

84%

83%

82%

68%

67%

68%

86%

86%

89%

79%

80%

79%

58%

63%

66%

MASTERS

STRIVERS : Confident Seekers Great Planners Execution Heros

TRYING HARD /LAGGARDS

CHART 3 Sales «master» understand the potential of digital technologies and outperform other companies.

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Considering the great efforts to instill sales efficiencies, how can manufacturers measure the impact of increased sales pro-ductivity on their bottom line ?

According to KPMG’s Global Manufacturing Outlook 201411, only 12 percent of manufac-turers say they are “very effective at deter-mining their profitability”. Asked what profit and cost analytics practices their organization will prioritize in the next years, the executives surveyed identified dashboards, applications, and analysis as the three most important ones (see chart 4).

To assist sales teams, certain CRM solutions now feature powerful dashboards with cost distribution tools to determine customer profitability. Such tools attribute costs to all

activities (customer service, sales call, RMA, etc.). Each time an employee assigns an acti-vity to a customer in the CRM software, the cost is computed and aggregated to assess the net profitability. The CRM tool computes the actual customer profitability on a daily basis using gross profit from orders and the cost allocation for each activity, and then as-signs a static rank (e.g., A, B, C, D) to all custo-mer accounts. By assessing how profitable a customer is, companies are better equipped to determine how much they should invest in customer retention on a case-by-case ba-sis. Certain CRM solutions also allow manu-facturers to track service and warranty acti-vity, lifetime value of equipment and even equipment at risk to ensure profitability and customer satisfaction through improved ser-vice response. Customer data analytics enable companies to design cross-sell and up-sell techniques to increase customer profitability, hence supporting sales executives through better-informed decision-making.

Mesure customer profitability accurately

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11 KPMG International, Global Manufacturing Outlook: Performance in the crosshairs, http://www.kpmg.com/Global/en/IssuesAn-dInsights/ArticlesPublications/global-manufacturing-outlook/Documents/performance-in-the-crosshairs-v3.pdf, 2014.

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34%34%

32%

31%

25%18%13%

11%

3%

Dashboardsand drill-down capabilitt

ApplicationsIntegrated planning and forecasting

Analysisstatistical and driver-based

Modelingscenarion and predictive

Rationalizationof data models

Sources of informationuse of new and more detailed information, internal and external

Central repositorymaking cost and margin data easily available

Less use of Excel

Multi-dimensionalmargin and cost analysis

CHART 4 Which of the following profil and cost analytic practices are your organisation’s top priorities in the next 12 to 24 months ?

According to KPMG’s Global Manufacturing Outlook 2014, only 12 % of manufacturers say they are “very effective at determining their profitability”.

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The impact of social, mobile and cloud solutions has made it clear that digital technologies and sales analytics are disruptors in the manufacturing arena.

They can also be considered key success factors in achieving substantial growth. Ma-nufacturers can leverage these innovations through CRM technology to boost their sales productivity and enhance the customer ex-perience, thereby increasing their competiti-veness. By investing in sales analytics, manu-facturers would be in a position to strengthen their lead generation process, increase visibi-lity of their sales pipeline, and improve cus-tomer demand forecasts. Making the data accessible to sales teams also enables manu-facturers to streamline the sales processes, improve collaboration among a distributed workforce and measure customer profitabili-ty. In order to effectively customize a CRM so-lution to their specific needs, manufacturers should partner with CRM consultants having in-depth knowledge of manufacturing pro-cesses. Experienced consultants will be able to assist in developing a phased implemen-tation timeline that will allow manufacturing companies to fully capture the essential data required to provide decision-making insights and sales productivity.

Conclusion

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Gestisoft is a CRM & ERP consulting firm for small and medium-sized businesses and organizations. Founded in 1997, Gestisoft has hundreds of clients throughout Quebec and Ontario.

Gestisoft assists organizations in gaining orga-nizational intelligence to increase their agility. Whether companies want to implement mo-bile or social, cloud or on-premise solutions, Gestisoft guides them in deploying a solu-tion which captures the essential data requi-red to provide decision-making insights. This enables companies to streamline processes, enhance performance and productivity, and receive a consolidated picture of operations, marketing and sales.

Unlike other service providers, Gestisoft takes a proactive approach with its privileged sup-port plans and integrity “Health Check” re-ports to ensure agility. With vast expertise in the manufacturing, distribution and service industries, Gestisoft better understands in-dustry-specific needs.

About Gestisoft

www.gestisoft.com 514.399.9999