Canadian Plastics

MAKING THE SALES CYCLE WORK FOR YOU

One of the most challenging aspects of business often faced by a smaller-sized company is how to handle peaks and valleys in sales. While some up and down movement of sales over time is natural, frequ...

February 1, 2000   By Michael LeGault, editor



One of the most challenging aspects of business often faced by a smaller-sized company is how to handle peaks and valleys in sales. While some up and down movement of sales over time is natural, frequent and/or steep pitching of sales volumes is neither desirable or inevitable. The key is understanding the sales cycle.

“Most small business owners come up through the floor and typically, at the end of the day, they still have the dirtiest hands in the plant,” says Chris Singleton, sales manager, Ontario Die Co. Ltd. “They’re very technically proficient, but very few fully understand the cycle of sales.”

What is the cycle of sales? There are many interpretations out there but Singleton says it boils down to a few basic stages. These are researching, prospecting, quoting, sale and after-sale service. Sales will most likely hit a dry spell if sales staff is focused on only one part of the cycle, instead of the bigger picture.

Says Singleton: “You have to have a lot of irons in the fire at once. If all you’ve done for the last month is after- sales service, if you haven’t been researching, prospecting and quoting new jobs, in two to three months you’re going to be dead slow.” Singleton says the overall objective is to use the sales cycle to build long-term relationships with customers, an approach he calls pro-active vendor partnerships.

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MANAGING THE SALES CYCLE

RESEARCH

The day when you could walk off the street into someone’s office and get business is over, Singleton observes. People are too busy, and nine times out of ten cold calling turns out to be a waste of both their time and your own. Research is an essential first step to maximizing the efficiency of your sales prospecting.

Research is product and market driven. For a Tier Two supplier to the automotive industry, the potential customer list is limited and well known, notes John Bell, CEO and president of Cambridge, Ont.-based Polymer Technologies. Bell acquired the company in 1996 after selling Shred-Tech, a company he founded in 1977. Since he purchased Polymer Technologies, sales revenues have tripled to nearly $30 million. Today the company makes over 600 parts with 55 injection molding machines

“The main thing in the auto market is getting on the approved supplier list,” Bell says. “Your research is driven by your customers needs.”

Singleton says his personal favorite research resource is Scott’s Business Directories. He says the section of the directory containing a city-by-city listing of manufacturers is especially useful to him. “If I have a 10 o’clock meeting in Ajax, Ont., I can use the directory to see what other companies that make things out of plastic there are in the area. The directory gives me all the pertinent information about the company, including SIC codes and contact names.”

Other effective research sources, according to Singleton, include articles in trade magazines and newspapers about plant expansions, Internet searches and word-of-mouth leads and referrals.

PROSPECTING

Making contact with a potential customer is the next stage of the sales cycle. It encompasses everything from mailing out company brochures to initial interviews. A key step in successful prospecting is an aggressive and savvy phone technique. The objective is to learn who makes purchasing decisions at the company (see page 26) and to pave the way for an eventual one-on-one meeting.

A common misunderstanding among sales people, especially younger or inexperienced staff, is that a purchasing decision will only be based on the criteria of quality, service and price, says Singleton. In reality, a sale is much more complex.

“Some sales people walk into a company with the attitude, ‘if we can offer you better price, quality and service, why aren’t you buying from us?’ Well the truth is the buyer doesn’t know you from a hole in the ground but he’s been buying from the other guy for 20 years.” Singleton says relationship, consistency and comfort are often just as important to a customer when making a sales decision. He notes that in the initial contact stage, it’s important to bring something to the table that the competition doesn’t have.

While you’re prospecting a customer, they’re also prospecting you. It is often at this stage that a potential customer will request to audit your facility. In the automotive market, a company audit is a critical step in getting on a customer’s supplier list, says Bell. “It is your moment in the sun, and you have to make every effort to come across as a well run organization.”

QUOTING

A customer doesn’t want any surprises or extra charges when billed. Shipping charges, type of currency and other details should all be worked out beforehand and included in your quote. The quoting process is also a good time to work out value-added features with the customer.

“We will often ask to get involved with the design process because we feel our experience in designing parts can help reduce the number of revisions and shorten delivery time,” says Singleton. In designing a quote which in some respect adds value, it’s important to understand the needs of the entire organization, not just the buyer. Building relationships with the key players in a company’s QC, engineering and production departments is a critical part of obtaining insight to a company’s needs, he notes.

As quoting can generally be a drawn out process, it is important to have differing revenue streams. Says Bell: “The length of time of the sales cycle in automotive is frustrating, especially for a small company, because we have to be capable to take on new business in order to quote, but we may not see production revenue for one to three years.”

SALES SERVICE

After-sale contact with the customer is in some ways more important than your before-sale efforts, because it can determine how well the job gets done, and whether you will be able to turn it into repeat business. Communication is the key.

“Often a shop owner will wonder why business they quoted on months ago is just coming in the door now, when they have only eight weeks to make a tools and shoot parts, say, in time for a trade show,” says Singleton. “It’s because some designer at the client didn’t take the time to understand the job, or wasn’t told you have to have final drawing by such a date.”

Tooling build timelines, while effective for internal project management, may not relieve a customer’s anxiety that real progress is being made on a particular project. For distant customers, Singleton suggests videotaping portions of a tool build and mailing the tapes to the customer.

Managing the sales cycle requires good planning, attention to details and lots of legwork. The benefits, however, can be improved operation efficiency and performance with fewer extreme peaks and valleys in your workload.

Singleton’s favorite research

tool: Scott’s

Business

Directories


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