Specialists in the MRO Environment
There is no place where the Specialist can be more effective than in the MRO selling environment. Specialists lead the way in the competitive differentiation strategy of many distributors. In a survey of over 200 distributors from across the country, we found over 84% believe Specialists add value to the products they sell. These values pile up quickly and provide a powerful sales advantage in the MRO world. Why?
Manufacturing facilities in North America today face one of the greatest shortages of personnel resources in the history of business. Facilities in the 1970’s had a cadre of plant engineers, facilities engineers, maintenance engineers and associated technicians. If there was a question about applying a product, somebody in this large staff was a walking encyclopedia of product knowledge. But, the right-sizing and outsourcing mentality of the past 20 years has brought plant related staffs down to a couple of overworked individuals. Specialists fill the void.
Human Resource mavens tell us there is a future shortage of trained technical workers. Nearly 75 percent of 1,400 global companies participating in a Deloitte survey in 2005 said they expect a shortage of salaried staff over the next three to five years. This fact drives value in the work Specialists perform with training and answering technical questions quickly.
U.S. and Canadian companies are placing a greater importance on up-time. Think about your own personal life. Your car may be beautiful to behold and have tens of thousands of drivable miles left in it but if it won’t start just 5% of the time, you have it on the road to the junk heap. Manufacturing facilities face a similar fate. With high costs of labor, massive overhead and other burdens, these facilities have to produce when management wants them to run. When things break getting back on-line and running is of paramount importance. Specialists provide a level of local expertise that can quickly produce positive solutions.
Join us as we explore a few of the real selling advantages produced by Specialists and how they can turn into opportunities in the MRO environment.
Training – It’s not just about education.
Positioned properly, Specialist led training provide an outstanding opportunity to build relationships and ferret information. Technology training is in demand and leading edge companies use it as “bait” in their sales process. Specialists working hand-in-hand with their colleagues in the outside sales force can easily turn training into a vehicle for prospecting.
Often those attending training are “unknown” to the sales team. They may come from non-technical departments (i.e. HR person attending an electrical safety presentation) and they may have big buying influence. Here are a few quick points to consider when taking part in customer based training:
- Ask Sales and Customer Service to indentify any key players attending prior to the class. This gives you an opportunity to tune into these people.
- Learn about the students during breaks, before and after training. Gather information on their department, the problems they face on a daily basis and the implications of these issues.
- Follow-up with students following the training session. A phone call placed several days following the training does a lot to signal the student that you feel they are important. It also provides you with addition time to learn about selling opportunities.
- Think about the important things you would like to know before the training. For instance if you are conducting a lighting seminar, you may gather information on types of work planned, those involved and potential competitors.
Use your position to leverage with customer management
One of the best ways of gaining advantage in an MRO environment is through solid management connections. Yet electrical wholesale salespeople confess that calling on Production Managers, Plant Managers, IT Managers and others is their greatest fear. Sometimes the fear is well founded. Salespeople who spew forth product data or stumble over “trial closings” face immediate door slamming from management types. And, some managers tell me they just hate salespeople because “they always try to snow me with product baloney.” Here’s where Specialists shine – officially, they aren’t salespeople. And, they have lots of credibility with maintenance and the shop-floor guys. This paves the way for your audience with these “mahogany row” guys.
These people are the ones who can provide you with the right information to build a bullet-proof strategic advantage. To help you along your way, here is a simple phrase that will jump start your management level call:
“I am not a salesperson; I am responsible for finding the right products and technology for our clients, companies just like you. As I do my research, it would be very nice to know what our best customers will be doing in 3-5-7 years. Are there technologies you believe are promising for your industry? And, can you provide some insight on what you feel the issues facing your company might be in the mid-term future?”
Stand back, take notes and don’t you dare talk about products - no matter how ripe the opportunity. There will be plenty of time to talk about products in subsequent calls and in meetings with those who work for this person. Plus, armed with this information, your salespeople will have a better insider scoop than any of their competitors.
Understand the financial drivers
When you work with MRO customers the drivers are slightly different. Seemingly little things add up to important dollars. Researcher indicates that administrative costs associated with a single purchase order hovers around the $100 mark. With MRO buying decisions it’s as much about “other costs” as it is your price. Smart Specialists understand this and use it to their advantage. If your company has a “blanket order” or some other supply agreement in place with the customer, work to add your products to the list of those purchased.
Inventory affects MRO costs. Some wholesalers use this to their advantage and promote consignment plans. If you don’t know where your company stands on this topic, I suggest you spend 10 minutes at the next Specialist-Management alignment meeting discussing the topic. But consignment is not the only way you can affect the customers need for inventory. Are there new technology products that functionally replace several individual spare parts your customer now holds? If so, this is a value to the customer and a potential opportunity for you. Does the customer hold hundreds of back-up spares in inventory that your organization keeps in stock 5 blocks away? This might be another drive to eliminate inventory.
Standardization is another issue of inventory. If the customer standardized on a single vendors product, they would need fewer emergency spares. Position yourself and your company as the expert on standardization. One trick of the trade for MRO based distributors is the “Clean Sweep”. In this program you offer to clean up a product grouping for the customer. Disposing of obsolete and oddball junk and replacing all of this with the right stuff to make the plant run. While I wouldn’t suggest that every Specialist jump into the role of clean sweeping customers repair crib, I do suggest you thinking about how you can provide the right tools to your sales team so that they understand how to insert your products into the customer’s crib. (If you want more information on conducting a “Clean Sweep”, send me an email. River Heights Consulting has a detailed plan for building these programs.)
The Holy Grail of MRO business is downtime. Decreasing unplanned downtime is the trump card of the MRO world. Purchasing people get “at-a-boys” for trimming a few cents off the price paid for some commodity. They get fired for making a poor decision and shutting down the plant to save a few dollars. Every Specialist and salesperson involved in the MRO market needs to understand their customers cost of downtime – it’s typically measured in the hundreds of dollars per minute. If you know something that will keep the plant running, it’s valuable. If you suggest a product that produces 2 hours less downtime than the one they currently purchase – and you can prove it – price becomes no object. How many times do you face that opportunity?
A parting thought…
As a Specialist, one of the most important jobs you face on a daily basis is targeting accounts for increased sales. You are uniquely qualified to aid your sales team in identifying and closing sales opportunities within your customer base. MRO customers provide the biggest opportunity for quick results. In a short meeting with each of your sales team I suggest you outline the following:
- What issues are commonly found in the customer’s environment?
- Which products might solve the customer issue?
- Who within the organization would know the ramifications of the issues?
At the end of the meeting set a timeline for exploring the issue and presenting your solution. Each of these issues becomes an opportunity for increased sales. That’s what Specialists ultimately do – convert customer pain into sales gain.
Check out Frank’s latest book, The Distributor Specialist: Customer Champion, Profit Generator! It is now available from the National Association of Wholesalers Institute for Distribution Excellence.