by Nicole Mitchell, writer, The American Mold Builder
With product demand booming in nearly all consumer markets, now is the time to pursue aggressively additional business opportunities from existing customers and new prospects. “The gestation period on new customers is quite long in this business,” said Carl Jacobsen, estimator/tooling engineer, M&M Tool. “It’s very rare to have contact on a potential project and have a purchase order in three months – it’s closer to 18 to 24 months. So, you’ve got to keep the potential customer pipeline full to give everyone time to do their due diligence and make sure they’re a fit for what you offer.”
Expanding existing relationships
Businesses from all industries deal with customer retention and management. Anthony Smith, founder and CEO of Insightly, a customer relationship management company, wrote for Forbes magazine that a strategy focused on building customer relationships should keep current customers at the center of any marketing attempts. “Keep track of how many customers return to you and why,” Smith wrote. “Then, make sure that repeat customers hold a central focus in your company’s marketing plan.”1
During the early stages of the pandemic, M&M Tool & Mold, Green Bay, Wisconsin, stopped all in person on/off site sales calls with potential customers. The company had recognized the challenges in reaching prospects during a time when many businesses weren’t allowing visitors or had locked down new product launches. Instead, M&M Tool focused on serving customers that it already had and expanding those business lines.
“It’s a learning curve,”, Jacobsen said. “Once we’ve worked with someone, we start to know what they need, so we could use email and phone calls to have discussions about potential projects. With our established customers, many of them have their own RFQs, but we also have a proposal worksheet that we can use to get information about what type of mold they need, how they want to gate it, the press size and other things like that. Then it’s a matter of giving them some time for review before touching base.”
Jacobsen also acknowledged the benefits of getting past the frontline gatekeeper when working with existing customers. “Once you get some work from a customer, you begin talking to the tooling engineers rather than a purchasing officer,” he said.
Kelly Kasner, director of sales for Mishawaka, Indiana’s Michiana Global Mold (MGM), reaches out to customers – new and old – on a weekly basis. “Are you experiencing a disruption right now? Are you having a hard time with your current suppliers who may be offshore? Are you having delivery lead time issues?” she said, providing examples of questions she asks. “I try to suggest pain points, and maybe someone reading my email says, ‘You know, I really hadn’t thought of that’.” By asking these detailed questions, Kasner believes she improves the quality of dialogue between MGM and its customers and better identifies the potential needs of those customers.
Current customers are evaluating which suppliers are adding value to their product and exceeding their expectations. Instead of selling a service, mold builders need to show how that service returns value. “At the end of the day, your customers don’t care how much revenue you generate, what your shareholders expect, or what your sales quota may be,” wrote Ritika Puri in an article titled “7 Subtle Yet Powerful Ways to Build Stronger B2B Relationships,” for Sales Force.2 “They’re looking for solutions to specific business challenges and ways to increase their own revenues.”
“One of my goals is to ensure that our customers are at the leading edge of the marketplace with their products,” Kasner said. “If our customers are successful and we helped with that, we get to be their hero.”
Challenges for sales teams
Even though an established sales relationship makes it easier to talk about additional opportunities with current customers, there still are challenges to overcome.
Diversification
Just as mold builders have been encouraged to diversify their customer base to avoid a business mix that places too many profit expectations on one customer or one market, they may be wary of placing too much business with one supplier. “Over the course of the past couple of decades – and, more particularly, now when we have such a disruption in our supply chain – companies view a little bit of diversification as the key to success,” Kasner explained. “If companies do put all their eggs in one basket and a supplier drops the ball, then there’s a higher risk than if there was diversification in the supply chain.”
COVID-19
Although restrictions are loosening and many companies are returning to normal activity levels, caution still is recommended. After putting in-person visits on hold at the height of the pandemic, M&M Tool is back to making limited sales calls with prior and new potential customers, according to Jacobsen. “I have some parking lot visits set up with three existing customers,” he said. “The general manager has been keeping a close eye on COVID-19 changes based on the areas we would travel to. If we’re planning a trip, the status is checked, and then we make an informed decision about sending vaccinated employees into the area.”
Capacity
Even if new business opportunities come knocking, tool shops have high capacity utilization rates thanks to increases in consumer demand and a flurry of order activity from OEMs eager to respond. “During this last year and a half, shops have been overloaded,” Jacobsen said. “To try and break into new areas in the market or new areas that we can sell to existing customers gets difficult.”
Getting beyond price
Existing customers may be the easiest fruit on the tree, but eventually the sales team will need to reach for a higher branch – new prospects. The most difficult part in establishing a relationship with a prospective customer is getting beyond price.
The first step in building relationships with prospects is to understand what they value. In an article written by Beacon Media + Marketing, Anchorage, Alaska, value-based marketing is “the next big thing” in sales.3 “Creating relationships that are based on more than just a mutual need for a product or service means a deeper and more meaningful experience on both ends of the business model,” the article shared.
A mold building company already should know what its values are, but how are prospects’ values identified? That assessment may be easier when employees of the target company are familiar or when the target company may have similar regional or local values.
“Mold building, in general, is a small community,” said Jacobsen. “Most of our customers are regional, and so it’s likely we have crossed paths with common employees in the past. Chances are, we’ve worked with someone who’s worked there, or we had a customer who’s worked with a previous customer before.”
Values, however, aren’t always articulated and instead hide behind pricing discussions. “Many people that I would be in contact with said they were purely basing their decisions on price and delivery. Quality was considered complementary,” said Kasner. “But more times than not, what actually drives purchasing decisions turns out to be trust. There are plenty of surveys and psychological statistics that show people make purchasing decisions emotionally and they justify them logically. I think, particularly in our industry, there are individuals who believe that price and delivery are very logical and justifiable purchasing reasons, but if you truly dig down, emotion prevails and there are underlying factors that lead to a final decision.”
Those factors include trust, confidence, quality and responsiveness – and customers indicate their reliance on those factors when asking questions that relate to the ways in which tooling companies complete their work. “How do you handle the DFM process? How do you handle the designing? How do you handle the purchasing components? How do you handle communicating with us?” Kasner explained. “These questions further demonstrate the fact that it’s not just price and delivery that are important. What people are looking for is trust.”
Building that trust means it’s critical to understand what customers truly want. “I like to engage and invest in new prospects to further nurture that relationship,” she continued. “I don’t dismiss it when they are clear that their purchasing decision is made based on price and delivery. But, after hearing different questions, then I’m able to turn those around to focus on a needs / benefit analysis.”
After the manufacturing slowdown in the early days of the pandemic, consumer product demand has skyrocketed and tool builders have an opportunity to expand their reach. But, work needs to be done now to reach out to existing and prospective customers.
“It’s something you have to keep up with,” Jacobsen explained. “It doesn’t do me any good to go looking for work when we need it – we have to anticipate what might come in a year down the road.”
References
- “How to Build Customer Relationships.” Forbes, August 1, 2018, https://www.forbes.com/sites/anthonysmith/2018/08/01/how-to-build-lasting-customer-relationships/?sh=a16619c447a5
- “7 Subtle Yet Powerful Ways to Build Stronger B2B Relationships.” June 15, 2015, https://www.salesforce.com/ca/blog/2015/06/build-stronger-b2b-relationships.html
- “Values-Based Marketing is the Next Big Thing.” Beacon Media + Marketing, February 19, 2021, https://www.beaconmm.com/2021/02/19/values-based-marketing-is-the-next-big-thing/