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Dirk Schneider, VP Sales APAC, ElringKlinger
When sharing the experience with others, you still find companies not having their salesforce fully digitized – for miscellaneous reasons. Today, selling is beyond acquisition and is more selling business, less products and solutions only. Looking at life, especially in the automotive supply chain, the majority of business is within MNC environment and multi-year contracting with prices & conditions firmly locked in. Nevertheless, huge pressure comes in when customers confront non-contractual new price discount requests - often alongside the remark that products offered are fully overpriced, and the business should have not been agreed to before. This could be observed frequently across the globe. It feels familiar at a point, hearing the same thing - too expensive, prices down. That’s like the starting point of all.
Industry 4.0 and Customer Management
So how do digitalization and new manufacturing principles like industry 4.0 now into play for the salesforce? well, data leave traces, and who can, will use them. Here we go increased industrialization and moving towards 'Industry 4.0' is providing a chance of setting new ground rules, as there is breathtaking transparency in looking at 'true bottom prices.' Taking a full ‘Industry 4.0’ setup into mind, direct labor doesn't play a role—most costs are depending on fixed cost elements amortized on volumes sold quite transparent. Once the overall equipment efficiency (OEE) is known, the possible maximum 24/7 output defines together with the overall CAPEX the total business case clearly. This enables to identify true bottom prices for most industrialized mass production products—which then can be used in digitized systems to support the salesforce.
Frequent discount requests will always happen in the automotive industry, and there is nothing wrong with it when connected with good business made mutually. Nevertheless, and not seldom, they are unreasonable coming as a kind of shot out of the dark- questionable in some cases when the request is against contracted conditions, and the deal was made, not less connected with lower volume consumption against the initial scope too. Anyway, to be taken as a request and valid to ask for. The most effective line of defense for the salesforce is information "on hand" about customer’s late payments, long payment terms, single-sided deductions, awards not given, or even accounts receivable overdue. Unreasonable discount requests can be more successfully questioned by highlighting inefficiencies to deal with- at the same time, relevant data must be on hand.
Sense of Using CRM Applications – the Good and the Bad
Digitalization in sales can be both—crux and a helpful weapon. When we look at it from a pure salesforce perspective—knowing your numbers is key. That's where modern CRM systems come into play to act as a ‘single point of truth data pool’ mechanism across large organizations.
Digitalization in sales can be both—crux and a helpful weapon.
Those need to be on hand at all times—and setting them up smartly, fed, and maintained properly is a necessity. Collecting, maintaining, monitoring, reporting data for consumed volumes to also provide proactive alerts is unbeatable—ideally getting them linked to price levels and get alerts on the measures to be taken, when ‘item’s sold volume’ is running against the fixed cost elements of a defined business case, or even if the agreed business cycle is coming to an end OR amortization effects have been accomplished early. Digitalization and transparency can be the friend of the seller and buyer likewise—whoever is using the data on hand in his best interest.
To emphasize the importance of price management and to combine the volume aspect with the prices locked in- needs certain action. This subject is as old as auto manufacturers buy parts. There is no such thing as a volume guarantee from the automotive buyer side, but there is also no guarantee that the price stays unchanged if the volume-related base conditions change significantly either. When it is too late, money is often down the drain - simply the ‘fire alarm bell’ for fast response subjects before it happens saves money. Such big data management connected with today's business targets is simply impossible to bear without some sort of cloud support.
Good Dashboard Monitoring would Contain:
price adjustments, payment terms, change management, phase-out management, tool and equipment amortization, late payments or no payments, credit control, order book development, retention management, discount monitoring, claim management, contract management, cost of sales monitoring, customer intelligence, competitor watch, control of ownership, customer organization tracking, cost of sales monitoring, performance ranking, account penetration, material price management, project pipeline management, and customer portfolio monitoring.
Control of Ownership
Another aspect to mention is the control of ownership of physical manufacturing assets like tools, gauges, fixtures, project-specific investment, which comes heavily into play, whenever a customer underpaid assets amortized into items sold, but the volume falls behind to make it impossible to amortize fully. Such monitoring makes it almost impossible to track and trace for hundreds of part numbers managed typically in automotive.
In modern times most sales organizations work 'remote' - and the COVID-19 pandemic intensifies this trend tremendously, that people management is purely digitized. Besides the salesforce support, also management tools for reporting, follow-up, and monitoring are required to be accessible easily. This adds to the leading trend of digitization and having a single point of truth mechanisms - a necessity for modern leadership. Giving the remote teams a chance to address alerts earliest and record pending subjects in case teams are changing heads. This is even more important for regions with high fluctuation in the sales force. A positive 'bycatch' of using digital systems for pending duties in the salesforce is to reduce overload in mail traffic when so-called 'logbooks' and 'alert messaging' are combined. It not only helps for handover procedures but also to streamline subjects across the levels - ideally standardized.Podcasters would say: "...put it in the show notes", here it gets centrally stored in the digitized logbook.
At times companies reduce traveling, all kind of virtual management becomes increasingly important too—so does customer intelligence. The banking industry knows what is meant by ‘KYC’—it stands for ‘Know Your Customer’ and very simply said, it supports avoiding wrong bookings and enable a proper service level. The same value it gives to any salesforce—and again a good CRM system helps to build up organizational charts with relevant side information too—describing relationship tactics and define future targets for top-to-top dialogues backing up the daily duties of the salesforce in the field. It becomes obvious that modern sales forces can hardly catch up with their peers without following the trends of proper CRM solutions.Closing with salesman's greeting: Sky's the limit!