Packaging and Production Lines is perhaps one of the most important sectors of the manufacturing industry. Having a fast, efficient, and effective production systems in place can give manufacturers a strategic advantage over its competitors.
The high demand for faster and better packaging and production equipment means that there is a lot of competition for suppliers. Whenever there is high competition, margins tend to be tight and competitors are forced to find different ways to gain a competitive edge.
To understand this industry better, we sought the expert opinion of Tacton’s Chief Product Officer, Nils Olsson. Nils brings a deep knowledge of the Packaging and Product Lines sector, with more than a decade’s experience at Tetra Pak. During his tenure as e-solutions and portfolio manager, he’s helped this global enterprise to revolutionize their sales process.
3 ways to rise above the competition:
1) Shorten sales cycles by selling exactly what customers need
Time and speed are two of the most important factors in packaging and production lines. Nowhere are the sayings “faster is better” and “time is money” truer than in this sector. This demand for speed and efficiency also applies to the sales process. Here, buyers are interested in getting the product they need faster and on schedule. The faster this can happen, the faster they can get to a Return on Investment (ROI).
Understanding the needs of the customer from the first contact is key to shortening the sales cycle. This requires a lot from the ordinary salesperson. It’s about allowing the customer to describe what their ultimate goal and targets are. During this exploration phase, the salesperson should be able to identify which solution will help the customer achieve those goals.
This certainly sounds simple, however, in this industry, the solutions and equipment themselves are complex. Often products require a customized solution for every customer. This customization generates a challenge for companies that are not equipped to quickly generate detailed, error-free quotes during a sales meeting. To learn more about Needs-Based-Configuration and Guided-Selling, click here.
In summary, in an industry where competition is fierce, being first and effective can really make you stand out from the pack. When a talented salesperson that can quickly understand the needs of the customer, and is also able to configure, price and quote the proposal during a sales meeting, it can really make an impact.
2) Compete on Value (not on Price)
Once your sales team is able to determine what product, components and configurations will be offered, it’s important to ensure that the customer understands the value being provided.
To understand this distinction, Nils likes to quote Warren Buffet, “Price is what you pay, Value is what you get.”
So when one takes into consideration the value one receives, it changes the way we look at the price. As everyday consumers, we see this play out whenever we buy a car or eat at a restaurant. We tend to overlook the price tag when we believe the item gives us a higher value from what we’ve paid.
How to communicate value:
Here is a quick list (not conclusive) of the type of information that a sales rep should convey during the quoting process:
- – How well the equipment works
- – How easy it’s to operate
- – How well can you maintain it
- – How adaptive and versatile is the equipment
- – How compliant is it with legal and regulatory requirements.
- – How it’s installed – steps, costs, and timeline of the installation project
- – When will the investment start generating revenue for the customer
While these factors apply to any sales process, Nils remind us that communicating value plays a bigger role in the production line and packaging sector.
“Companies competing in this field often operate at marginal costs, they have high installation costs, and are subject to ever-changing regulations.”
The ability to communicate the value to the customer is therefore key for avoiding the trap of a price war in an industry that is already operating under thin margins.
3) Focus on building customer relationships
In a competitive environment, maintaining solid customer relationships goes a long way. While it may be tempting to use the word “loyalty”, the fact is customer relationships are based on facts and measurable outcomes.
In this sense, building strong customer relationships is about delivering on your promises. Certainly, getting the quote quickly and convincing the customer of the great value you are providing is certainly important. However, these two are meaningless if they are not followed through successful delivery.
One of the best ways of achieving this level of effectiveness is to ensure that there are no errors in the quote. It is in this crucial moment when a quote is converted from a contract into a production order, that can make or break the trust that sales teams worked hard to earn.
Another similar factor that plays a role in keeping customers loyal is by the confidence shown by the sales rep. This confidence comes from having accurate and reliable information at hand. It can also come from being able to promise a delivery date and installation costs. In this sense, Nils highlights the importance of sales teams to collaborate closely with engineering and production teams.
It is important here for sales teams to have reliable information, readily available and accessible from anywhere. Luckily there is a tool for that!
In case you haven’t caught on, there exists a tool that can help you achieve shorter sales cycles (1), Compete on Value (2), and build stronger customer relationships (3). That tool is Tacton CPQ. Sound too good to be true? Have a look here: http://www.tacton.com/tacton-cpq/