By Liz Stevens, contributing writer, The American Mold Builder
Knowing that creating and implementing a successful sales strategy is critical to the bottom line of any business, AMBA offered a new event centered on the sales process. The AMBA Sales Process Forum was held on February 27, 2020, in Hoffman Estates, Illinois. The forum featured presentations from best-in-class mold builders on sales management strategies, processes and best practices. AMBA members Hillary Coombs, vice president, sales and marketing at Westminster Tool, and Charles Daniels, chief financial officer of Wepco Plastics, Inc., shared strategies for improving underperforming accounts. The American Mold Builder talked with Coombs and Daniels to learn about the insights they discussed at the event.
Westminster Tool, located in Plainfield, Connecticut, has been in business since 1997, when Ray Coombs began manufacturing mold components in his basement. Now expanded to a large facility and with another location in the works in nearby Sterling, Connecticut, Westminster is a complete injection mold builder serving the medical, automotive, aerospace and defense, consumer packaging and industrial markets.
Wepco Plastics is located to the west of Westminster Tool, in Middlefield, Connecticut. Wepco started out in another basement – that of Wally Parmelee – in the 1980s. Now in a 10,000-square-foot facility, the company specializes in rapid prototype and short-run plastic injection molding for medical, industrial, aerospace, consumer goods, construction and more. Wepco’s tool room also can provide job shop machined metal parts, custom sinker EDM work, 3D printing services and stereolithography.
Components of a Robust Sales Strategy
In the presentation that Coombs and Daniels delivered together, they began with an overview of key sales strategies. For each customer, they explained, it is important to first identify what is of value to the client.
Coombs explained that “value” is quite distinct from “need,” and that value is often a moving target. “What is valuable to the client,” she said, “is different for each customer and sometimes for each order. At the end of the day, we are providing a mold (that is the client’s need). The value that we can provide is what differentiates us from our competitors.” She illustrated value with a comparison. “For some clients, the pertinent value is a really tough tolerance that they have to hit. For other customers, the value might be lead time.”
Daniels concurred, and offered another example of differing values. “If you are selling based on price, and customers really just care about lead time,” he said, “you will not be able to provide what they need and want.” Both speakers clarified how to capitalize on the highest value identified for a customer and an order. “Once you understand what is driving the client’s purchasing decisions,” said Daniels, “you can customize your solution.” “When you pitch your quote,” Coombs stressed, “you should cater your wording to focus on the value most important to the customer for this order.”
Having evaluated the customer, and the customer’s needs and wants, Daniels and Coombs suggested that the next key sales strategy is setting expectations for the type and quantity of work likely to be proposed, won and ultimately delivered to the client. As Daniels explained, it’s all about communicating and being in sync.
“Ensure that you and your customer are on the same page,” he said. “They need to understand your process, including agreeing on how you will communicate, identifying important milestones, setting payment expectations, etc.” He pointed out that failure to set expectations up front could lead to misunderstandings and potentially negative impacts on the relationship. Coombs reiterated the importance of this strategy. “We call this setting the expectation,” she said. “If you don’t know it, how can you meet or exceed it?”
Once a working relationship with a customer has commenced, regular reviews of how sales performance is stacking up against one’s initial expectations for a client’s book of business will reveal whether there are any problems to explore and resolve. Coombs offered an example. “You believe a customer should generate $500,000 per year in sales. If, at mid-year, you have only done one quote for them for $250,000 and the customer has a 10% hit rate, it is not likely that you will hit the $500,000 sales target.” Customers that are judged to have become underperforming accounts (more on how to make this determination later) will require their own care and handling.
Another crucial element in the sales process is managing relationships with customers, and the first step is to understand the nature of the relationships in a sales setting. “It isn’t really one company buying from another,” explained Daniels. “It is more that people from one company are buying from individuals at another company. Spending time to deepen those relationships is extremely valuable. You want your customers to rely on you as a friend and a partner, not merely as a vendor.”
Coombs agreed and took the exploration of relationships a bit further. “This is critical to ensuring transparent and consistent communication,” she said. “And Charles is right: It varies from person to person in a company.” Coombs explained that some of her customers really value dinners and lunches for building professional relationships. “Others,” she said, “are very straight to the point and prefer using detailed emails to communicate.”
The bottom line, according to Coombs: “The more you can get on the same page the better. It is just like every relationship – you have to know how to communicate effectively.“
The final point that Coombs and Daniels emphasized as part of successful sales strategies is for mold builders to see themselves as partners with their customers. Creating and cultivating personal relationships is half of a strategy that is complete when the relationship moves from acquaintance or friendship to real partnership.
Becoming a partner requires an investment, and investments can really pay off. “Invest in the success of your customers,” urged Daniels. “Really work to help them achieve their goals. If they view you as a valuable partner, you are more likely to gain loyalty from them.” You can’t fake it ‘til you make it; sincere, thoughtful attention and caring are what’s needed.
The Symptoms of Underperformance
According to Daniels and Coombs, there is a simple test for identifying an account that is underperforming and, therefore, failing to create sufficient sales opportunities. Either of two scenarios may signal the drop in performance: a decrease in sales when actual business awarded is compared to the potential business projected for the customer, or a drop in sales when the current book of business is compared to the customer’s past history of sales.
Coombs gave an example to illustrate that first scenario: a drop in sales versus the sales forecast. “Do you have a prospect who you believe should be generating more sales?” She described a customer with a $20M annual tooling budget, of which a mold builder hopes to capture just $500,000. “Historically, let’s say your hit rate is 10% with this customer,” Coombs suggested, “so you will need to generate $5,000,000 in quoted volume.” If the mold builder sees evidence that it is not on course to reach the target, Coombs offers some important questions for identifying the source of the shortfall. “What is keeping you from getting that small sliver of their business? Do you need to increase your hit rate to reach your goal? Does the customer not see your value?”
Daniels offered another way to judge a looming decrease in sales as compared to projected sales for a year. “During the quoting process, a new customer states that it expects to order 5,000 parts per month for the entire year,” he said. “After three months, you notice that it has only ordered 2,000 per month and you don’t have a PO for the future months. It would be important to reach out to this customer.”
A look at current year sales as compared to a customer’s sales history also might point to a problem to explore. “Review year-over-year sales figures and determine if customers are doing the same level of business that they have done previously,” suggested Daniels. “If the sales are lower than in the past, it is time to investigate why this is happening.”
Coombs offered another illustration. “You anticipate $500,000 per year, but are only at $100,000 in June – when you would normally be at $300,000-plus,” she said. “This is a cue to dig deeper and understand the cause. You could evaluate your quotes: Do you have enough pipeline that you should focus on closing or do you need to generate more business… OR does the customer just not have the work this year?”
Diagnosing the Cause of Underperformance
Armed with the figures that reveal underperformance – whether in contrast to expectations or to historical trends – remediation begins with a little more research. Specifically, the research includes talking with the customer to share the concern over lost sales, to ask for more business and inquire as to the reason for decreasing sales, and to probe for whether sales have fallen due to an objection or a condition perceived by the customer (more on objections and conditions later).
Daniels and Coombs bank on using honesty, transparency and flexibility to seek remediation opportunities. They stressed that understanding the actual current state of the relationship with the customer may be somewhat time-consuming, but that it will pay dividends.
In assessing the current state of the relationships, Daniels suggested going deeper than just reviewing the mold builder-customer relationship. “What is going on in their industry,” he asked, “and what is happening to the global economy?” To Daniels, this is a basic starting point. “You can’t get to anywhere efficiently if you don’t know where you are starting,” he said. “You will use the information on current state to form the base of your remediation plan.”
“You have to take some time to understand the situation, to get curious about gaps before diving into a solution,” said Coombs. “An example is that – without having communicated with the client –you might jump to a conclusion, such as ‘I have to be cheaper to win more.’ But in fact, the customer might just not have any new business this year or maybe isn’t comfortable with how far you are from the location.”
The pair suggested that mold builders can dive in to learn the customer’s entire “pie” of work, and then maintain a relationship to get as many slices of the pie as possible. Or, mold builders might ask for more business as a jumping-off point to learn why they are not getting more of the customer’s work. In terms of diagnosing a problem and moving toward a solution, knowledge is power.
Coombs and Daniels also pointed out the importance of asking questions to clarify a customer’s objections, but they stressed the importance of knowing the difference between a customer’s objections and a customer’s insurmountable conditions. Here’s how Coombs described the difference.
“Let’s say a customer says your mold cost is too high, but you are at the lowest point you can be at without taking a loss on the job,” she said. “If this is an objection, it is something that you may be able to overcome. That is, you are not the most affordable option. As a remedy, you could drop your price, but you don’t want to do that. In the case of an objection like this, you can work to understand if price really is a deal breaker or to see if what you need is to increase your perceived value to help the customer understand what extra value you will provide at your price over the ‘cheaper’ option.
“However, if the customer’s rationale is a condition,” she explained, “it is a situation that you cannot overcome. If, for example, the customer’s budget is capped at $150,000 for the tool, your higher price is a deal breaker. There is nothing you can do about it other than finding a way to meet the price by making something quicker/easier/etc. But there is nothing you can do to change this condition – the customer’s budget ceiling.” Objections can be addressed and possibly overcome; conditions are what they are, and one’s only option is to bend to meet them.
Rx for an Underperforming Sales Client
With facts and knowledge in hand, mold builders are now ready to try out prescriptions that will boost sales – by applying solutions-based selling techniques.
To Daniels and Coombs, solutions-based selling is simple. “This goes back to being a good partner and establishing the needs of your customer,” said Daniels. “If you understand their challenges, you can then explain how your product and/or service can help to overcome them.”
Coombs laid it out in a hypothetical situation. “Let’s take selling a car,” she said. “Generic sales would be, ‘Here’s this brand new red sports car that is the hottest item. You’ll love it.’ Solutions-based selling is asking the driver what is needed – maybe it is a safe, reliable family car – and then finding the features of a car that solve that need for them.”
As to advice for creating a solutions-based sales pitch and presenting it to the customer, Daniels and Coombs were equally succinct. “I believe it starts by listening a lot more than talking,” said Daniels. “Many ‘sales pitches’ are focused on the selling company – its product, service, experience or culture. In order to really understand a customer’s problems or challenges, it is more important to ask good questions and really listen to the customer’s answers.”
Coombs boiled it down beautifully. “Use your customer’s words,” she began. “Listen. Then take exactly what is needed and connect it to a feature/solution you can provide.”
A Case Study of Underperformance
Hillary Coombs described how she identified an underperforming sales customer at Westminster Tool, and then used the tools in her solutions-based selling toolkit to address the situation and turn it around.
“We had one customer that we knew had a lot more potential work and, even though we were quoting, we would rarely win an order,” she said. “Initially, we kept coming back and discussing money. We would drop our prices and still not win the job. I decided to start visiting face-to-face and try to dig deeper. It took about five visits but, eventually, I got to the bottom of it: The company had stronger partnerships and relationships with other mold builders, which made it more comfortable to stay. BINGO – now I had something to work with. I started building relationships, using our company culture as a talking point, finding ways to show them we are a partner – not just a supplier – and how we could work together to grow together. Within just six months our hit rate doubled.”
Coombs did initial research to learn about the customer’s pie of business and saw that her company was not getting as many slices of the pie as they would like. When price-cutting didn’t change the situation, she invested by making multiple visits to the customer and finally learned the customer’s reason for not awarding Westminster more business. Now with an objection (as opposed to a condition) identified, Coombs set about to overcome the objection by cultivating a stronger relationship that eventually developed into a partnership that benefited Westminster and the customer.
To Your Continued Sales Health
By taking advantage of the insight shared by Coombs and Daniels, and by implementing techniques like the ones they have generously described, mold builders can enjoy stronger relationships with customers and cultivate partnerships that support the growth of both mold builder and client company.
In February 2020, AMBA launched the Sales Process Forum, an unproven concept that relied on the willingness of member companies to share their sales processes with industry peers. Despite the uncertainty of a new event launch, over-sold attendance put an end to any doubt of the event’s success. The exchange led to many companies sharing similar challenges, validating their own processes and discovering new, implementable ideas. Out of the forum, a new concept emerged – Sales and Marketing Roundtable Discussions. AMBA members can register now for the next session, June 3, 2020, at noon Eastern time.
In May, AMBA also will launch a new Emerging Leaders Virtual Ignition Webinar Series, featuring facilitated discussion and speakers every third Thursday of the month. The first session was scheduled for May 21, 2020, at 2PM Eastern time, followed by the “AMBA Annual Meeting – Industry Insights and Updates” webinar at noon Eastern time on May 27, 2020.
Currently, the AMBA has three plant tour workshops scheduled for the fall season – an August plant tour workshop at Century Die Co., a September plant tour workshop at Strohwig Industries (exclusive to members of the Emerging Leaders Network) and a November plant tour workshop at Legacy Precision Molds. In light of the current COVID-19 pandemic, check the AMBA Events calendar at amba.org/events for continuing updates and details.