Archive for November, 2016
Seven things you should think about
I hear you’re tired of working for someone else. Following rules that you don’t believe in; doing things someone else’s way when you know a better way. You have a bunch of customers who just love you and would probably follow you wherever you go or whatever you do. And yes, you want to sell more than what your company has to offer; you no longer want to be restrained by the limited capabilities of one company, you want to be able to sell a complete portfolio of product solutions. And, of course, you love the idea of being on your own.
And there is the money. Oh, the money. The deal you have now is not bad, you have a solid base and a decent incentive package but you’re never going to get rich on that. You hear that the reps you work with and compete against are raking it in. As far as they’re concerned the skies the limit for what a rep can make in a year of you get out there and hustle. A rep gets paid very well for your efforts, and that’s what you want to do.
But, and there is always a but, this time a pretty serious one, you must to take a few things into consideration before you take that giant leap to independence. Here are seven things you need to consider when planning your new rep company:
- Money, you should have some money in the bank. Some say up to a year’s worth of income before you even think of starting your own firm…some say two years’ worth. What are you going to live on otherwise? There is one thing you can do. You can approach your current employer and offer to convert your deal with him from a direct employee to a rep situation if they are willing to convert your accounts to rep accounts. This is a logical move and most of the time a win/win. The company doesn’t lose you but they do lose your overhead, your expenses and benefits package. Most of the time they will agree. But you must make sure that they understand they will no longer own you. You will have other non-competing lines going forward. That change could be bumpy at first but it can also be the one way you can launch your business comfortably.
- The next step is to decide who you are going to represent. If you have made a deal with your current employer, then that is one principal you have but what about other lines? If you are in the board business, you must consider lines that are non-competing but synergistic with your approach to sales. I recommend the following PCB lines for anyone going in the rep business selling printed circuit boards first a domestic quick turn prototype, and a military house, a good and solid flex and rigid flex provider, domestic 2-8-layer house that is very competitive and a good and reliable offshore house. I would also consider having a small contract manufacturer as well.
- Be sure all your principals are well-run, well financed and customer focused. This is critical. You want to spend your time selling not apologizing
- Make sure that you feel a sense of partnership with your new principals. You want to make sure that they respect their reps and know how to work with them. It would be a good idea to check in with some of their other rep firms to see how they have been treated.
- The contract is very important. Study it carefully and make certain that you can live with the terms. Don’t be afraid to push back if there is something you want changed. This is the time, not after the contract is agreed to and signed. Things to look at are: the terms of termination. They should be at least 90 days and this means you will be paid for every single order book right up to the 90th terminations day. Also, check out the payment clause. When are you getting paid? If it is after the principal receives his money, then make sure it is as soon as possible after he receives his money from the customer. In fact, try to get payment on shipment if possible that’s the best deal you can make.
- Who is going to be part of your firm? Are you going alone for a while or are you getting together with a couple of associates. True, there is power in numbers, but there is also expense in having one or two other people and their families to feed especially during the start-up phase. Choosing a partner is like choosing a spouse proceed carefully, very carefully.
- Develop a marketing plan. Yes, a marketing plan. You already know how to sell but you must know how to market your firm. How to get your name your name out there so people will know who you are. Most reps don’t have a marketing and branding plan it’s a big mistake.
And one more, under promise and over deliver: develop a reporting plan for your principals. The biggest problem between reps and their principals is lack of consistent communications. If you develop a b-monthly written report of your activities for each of your principals, they will love you for it. It’s good for them and it’s good for you as well. I would recommend you also set up a weekly call with each of your principals as well. I promise you they’ll love you for that. And one last thing. Forecasting. Yes, you must forecast not only for your principals’ sakes but for yours as well. How can you possibly consider successfully running a business without a forecast? Its only common sense
Book Recommendation – Nonstop Sales Boom: Power Strategies to Drive Consistent Growth Year After Year
A book recommendation from Dan Beaulieu.
Nonstop Sales Boom: Power Strategies to Drive Consistent Growth Year After Year
By: Colleen Francis
Pages: 280 with Index
This one has it all!
Yes I’ll use the cliché, if you are going to buy and read and study and teach from and hand out one book this year, then it has to be Nonstop Sales Boom: Power Strategies to Drive Consistent Growth Year After Year because this book has everything you need to be a successful sales manager, successful sales person, successful sales team and yes a successful company.
Here are some of the facts of the business world we live in today:
It is nearly impossible to get appointments
Only 3% of sales occur due to cold calling
The sales pipeline is never full enough leading to sporadic sales
Sales people seldom meet their quotas
There is very little customer loyalty
Sales people are not as engaged as they once were
Advertising the old way is brining fewer results than ever
Now okay does anyone want to stand up and argue with me about these facts?
No? I didn’t think so.
And that is exactly why I feel that Ms. Francis has written this year’s go to book about sales. Throughout the book she examines each one of these problems and more and shows us how to overcome them.
As an example in the very first chapter she list 14 reasons for sporadic sales. Here are just a few:
Delayed buying decisions
Emotional decision making
Sales rep stress
And the she addresses the issue and tells us what to do about it by developing your sales pipeline by doing the following:
Identify the prospect
The thing I like most about this book is that it provides the readers with all the modern day solutions they need to solve today’s problems. There are a couple of chapters on social media, a chapter on how to conduct a one on one meeting with a potential customer and a chapter on closing an order.
The author reveals that she is a close friend and protégé of sales guru Alan Weiss and uses his 4M approach to handling those one on one meetings.
Maximum: what is the plan A for the meeting?
Minimum: What is the least you want to get from the meeting?
Move forward: taking the process to the next step
Motivation: find a good way to motivate the buyer to make the sale.
The chapter on negotiations is worth the price of the book. In very clear and simple terms Ms. Francis shows the reader who to stand firm during negotiations. Always be ready to discuss price; never be apologetic, look the buyer in the eye and never move on the price without getting something in return and most of the time never move on price at all. Always hold firm.
One tip about your proposal that is especially valuable: “To increase your win rate on proposals, you need to present each one as a draft to every customer first.” This way you can get the customers feedback and in fact have the customer act as your advisor and help you develop the final version of your proposal. It is a great way to pre-negotiate… without negotiating, yet.
Okay I’ve given away enough already; it’s now up to you to get out there and pick this book up. It will be the best money you have spent on your career this year.
Look we all know that this is one of our industry’s greatest challenges. For a number of reasons not the least being that many board shops have screwed many reps over the years, it is getting more and more difficult to get good reps to represent us.
I know that of all the services I provide finding good reps is the most challenging. The problem is that many of them just don’t trust us anymore. Some of them have completely given up on the printed circuit board fabricator as a viable principal. They tell me that it is difficult to get and keep customers for a PCB shop when the performance is less than 85% on time; or if they are successful, they can become “too” successful to the point where the board shop cuts them off because their commissions get too large.
Now to be fair, this week I am going to talk about things from the reps’ point of view and next week I will approach the subject from the board shops’ perspective.
With this in mind here are seven secrets to finding and keeping some great reps:
- As always make sure that you are performing, this applies no matter how your sales force is made up. If you don’t perform you are not going to grow your business whether you have direct or independent sales reps. In this highly competitive environment performance is king and value is prince if you don’t provide these to your customers your are doomed.
- Make the rep an offer he can’t refuse. By this I mean tear up your traditional contract. Who said that we have to keep using the same old boiler plate contract over and over again? Man that thing is over fifty years old; the world has changed so should we. Who said that commissions had to be from three to five to seven to ten percent? Who said that commissions had to be paid only when you get paid? Who said that thirty day cancellation is cast in stone? Who said that? Think out of the box. If you are going after a rep who you feel is so good that she can really boost your company’s sales then figure out what will be a great deal for the both of you. Offer her a percentage of the profit on the part number, offer him a longer term arrangement do whatever it takes and of course what makes sense financially to get that rep signed up.
- Make that rep your partner, no I mean your real partner. Bring him into your business family; treat him just like one of your direct people in terms of regular communications. Listen carefully to what they he says. You are paying this person to be your hired expert with his customer base. You are hiring this person to bring you the customers that he knows. Be good enough for him to do that. Follow his instructions when it comes to how to win those customers’ business.
- Pay her on time. Nothing more just pay the rep when you are supposed to pay them rep and make sure that you include a comprehensive commission statement. If you don’t pay your reps they will not perform, get it? Don’t even think about not paying your reps if you want them to work for you. Not paying them on time breaks the contract and disqualifies you as a valid principal.
- Include the reps in your marketing, you have a comprehensive marketing plan right? You are marketing your company with advertising, social media, newsletters, trade shows etc. right? Well make sure that you include your rep in all of that marketing. Think of your rep as a franchisee of your company; the reason people invest in a Subway restaurant or a Midas Muffler shop is so they can take advantage of their huge marketing budgets; make sure you provide your reps with the same marketing and branding advantages. And oh yes don’t be afraid to provide them with the qualified leads that come out of your great marketing efforts.
- Welcome them to your facility. Bring them into your company, insist that they visit before you sign them and then make sure that you provide them with the opportunity to come out to your plant whenever possible. Have a sales meeting once a year and make sure that the reps are there to take part in your strategy meetings, that they have a say in the direction of the company including service, technology and Quality.
- And finally trust them. If you don’t trust a rep enough to share company information with him then you are wasting your time. The partnership will go nowhere. If you don’t feel that the rep is trustworthy they he is not the right rep. You have to be open and honest with your reps, you have to share as much information as possible to that they will be successful selling your company and hence your products.
And finally, yes there is one more, I always deliver more than I promised, Have regularly scheduled meetings with them where you discuss in detail their territory plans. This is critical. Please don’t tell me that you talk to them all the time, it’s not true; you are fooling yourself. Instead have a regular twice a month meeting with each of your reps to track the progress of their sales effort. Communication is the backbone of the rep/principal partnership and if you want to have a great relationship with your reps you have to talk to them…its only common sense
Has there ever been a more nebulous qualification than ITAR? It’s one of those things that everyone has an opinion about but no one knows that much about. To some of us it’s a game with ever- changing rules and to others its simply something to overcome, while to others is something to ignore altogether.
Speaking of ignoring it, some large companies have been ignoring ITAR restrictions for years, flying right in the face of the DOD letting them know that they did not think printed circuit boards were an “important enough” component to be covered by ITAR restrictions. Even after the IPC worked hard and won the battle to have the DOD specifically include PCBs in the list of components officially recognized as an ITAR protected electronic component. In most cases, are getting away with it. While at the same time a small-time broker in the Northwest was fined and actually went to prison for ITAR infringement. So, it seems that we have another instance of too big to be prosecuted.
Look I am not expert on ITAR and all its rules and subtle nuances and frankly I don’t know many people who are, but this is what I know:
To true ITAR expert consultants ITAR means badges and scanning devices, electronically locked doors, no documents on computers leaving the country, absolutely no non-American citizens coming within a hundred yards of an ITAR project and no transmission of ITAR product data over your normal internet lines.
To CEM’s on the other hand it means almost nothing. ITAR is just something to overcome, get around or work around on their way to finding the cheapest products they can find anywhere around the world.
Brokers feel that if they have the “right documentation” whatever that is, they can legally sell offshore printed circuits to American Military contractors who require ITAR.
And to many of our defense contractors ITAR is nothing more than a pain in the neck, and since they claim they must work with an ever-diminishing portfolio of legitimate ITAR board fabricators get their ITAR parts, they are constantly looking for loopholes in the systems so they can head offshore to get their parts.
While to American PCB vendors ITAR has been one last vestige of hope against the ongoing devastation of their industry. Hoping against all odds that at least one small part of the market would be deemed off limits to offshore competition and saved exclusively for them.
To the American government, ah the American government, one must wonder what ITAR means to them since on one hand they are while they try to protect the actual nitty gritty data that goes into an ITAR protected product; while on the other hand flagrantly selling and sometimes giving away the very end products that the components go into to the countries who are friends today but possibly enemies’ tomorrow.
To one young man a very able, talented, well-educated young man with a University of Toronto PhD as well as MIT credentials who is a declared expert in special materials used on integrated circuits, 3D circuits and printed circuits boards. With numerous publications and conference presentations on the subject of high end materials and laminates in short one of the most able and qualified scientist our industry has ever seen cannot get a position in the United States because of having the enormous flaw of being born in Canada which seems to me to be a huge loss to our industry especially in these times when we are all desperately looking for technical talent, particularly you technical talent companies won’t even try to work through a perfectly legitimate immigration process to citizenship for fear of the ITAR police. Doesn’t make much sense, does it? If any of you have any need for such a talented young individual or any good ideas on what we can do to help him, please let me know.
But in the end, I feel that ITAR is a good thing and could be even better if we were all the same page. And if we all and I mean all of us from the smallest broker to the U.S. Government decided to respect, honor and yes enforce ITAR it could and would be a great thing. It’s only common sense.
Book Recommendation – No Sweat: How the Simple Science of Motivation Can bring you a Lifetime of Fitness
A book recommendation from Dan Beaulieu:
No Sweat: How the Simple Science of Motivation Can bring you a Lifetime of Fitness
By Michelle Segar Ph.D.
Copyright 2015 Amacom
Pages: 241 with Index
A great common sense book about fitness and exercise
Look people don’t do things they don’t want to do and they sure shooting don’t do things they hate doing; instead they do things they like to do and that is what this book is all about. This book is about fitness, well not really, it’s really a book about staying motivated to stay fit.
This is the simplest and most straightforward book about exercise that I have ever read. I think that it really appealed to me as I’m sure it will to many readers because it teaches you how to use your head to re-frame what you think about exercise and how to love it instead of hating it. The author Michele Segar a motivation and behavioral scientist demonstrates to the reader how to make moving (exercise) the most pleasant part of your day.
You’re not jogging, you’re taking a beautiful tour of your town.
You’re not exercising, you’re contributing to your over-all well-being.
Look get rid of the pain and suffering, stop looking at your exercise equipment as instruments of torture instead look at the fun you can have while running, or playing tennis or just plain doing calisthenics.
As Dr. Selig says, “Human beings are hardwired to choose immediate gratification over benefits we have to wait to receive.” And that is what this book is all about. Full disclosure I found out years ago that the best way to get me to enjoy my daily four mile walks was to add book reading to the task, and not just any book reading but those mysteries and thrillers that I just did not have time to read in my daily life. Now there are days when I can’t wait to get out there slap those earbuds on along with my sneakers and get out there. I even have had times that I have walked an extra two miles so that I could find out what happened next in the Patricia Cornwell book I was listening to. I’m sure Dr. Segal would be proud.
Get rid of all of those books on exercising and buy this one. It is really the only book you will need to start getting fit…or to do anything else you don’t like doing for that matter.
It’s no secret that the independent representative/principal relationship is one of the rockiest in the manufacturing world. Here’s a typical example of how it can go wrong:
The dance between reps and principals usually starts this way: a company decides it needs more sales and wants to leverage its sales budget, so it recruits a network of reps. Often, the reps sign on and are then forgotten. After all, management expects that if they are any good, the orders will start rolling in.
Soon the quotes do start coming, but chances are they are for the wrong products. Automatically management assumes these particular reps are no good. Even worse, after more sales mishaps, management concludes that the rep route just doesn’t work after all.
Before coming to this conclusion, however, the principal needs to make sure they have done the following:
Fully explained the company’s story and products to the reps,
Stayed in touch with reps after the initial courtship and signing,
Visited reps in their territory,
Invited reps to visit the company,
Provided new reps with the basic tools they need to do their job – paperwork, copies of quotes, orders and invoices, etc.,
Told their in-house sales team about the new independent reps.
How to Find Great Reps
Now let’s talk about how to find the best reps for your company. It’s imperative you choose the right territory. In what geographic region do you want your business to grow? Why? How will this new territory help you meet your goals?
Next, use your industry’s trade association network, or a trained professional to interview reps in that region.
Finally, develop a profile of your ideal rep firm:
Has expertise in your industry,
A track record of success,
An ongoing relationship with target accounts,
A solid work ethic,
The right number of employees,
Time to dedicate to your company, and
Require that the reps you interview meet or beat these criteria. Don’t
forget that the reps must commit a great deal of time and money to sell your products(s). It will be months before they see a penny of income. This means you must sell a good rep on your company if you want his firm to sign up.
How to be a Great Principal
On the other hand, what should reps look for in a principal? They will expect your company to have:
An excellent reputation,
A clear operating strategy and marketing plan, and
Great technical capabilities.
Present an outline of all this information in a plan to your prospective reps during the interview process. Once you have chosen the reps you wish to sign up, don’t just offer them a boilerplate contract. Write a long-term contract that’s fair to your reps, one that compensates them for getting exactly the type of business you desire.
If you want to gain more military business, offer an additional financial incentive for military business. If you want to gain new customers, offer your reps a bonus for signing new customers. Follow up by paying your reps like clockwork.
In short, take care of your reps, and your reps will take care of you and your business.
If you are going to successfully sell you products and services, you first must figure out who wants them. Sorry to say but not everyone is going to need or even want what you’re selling. So, rather than waste time trying to sell to everyone regardless of their needs it is much more efficient, not to mention smart, to figure out exactly who needs your product and then sell it to them.
It’s like the old Willie Sutton quote; when Willie Was asked why he robbed banks he promptly answered, “Because that’s where the money is.” simple, right? We need to do a little more than that to find our ideal customer.
The first thing we should do is to develop and implement what I call an ideal customer template or filter if you will. This requires an honest evaluation of what you do. You should understand first exactly what it is you’re selling.
Then after that you must analyze who you’re selling to right now. Create a list of your best customers. And then further evaluate that list to determine who are your best customers and most importantly why they are your best customers. This list will usually contain your largest customers as well as the customers who have been doing business with the longest. Once you determine that, the next question to ask is why? What are the characteristics that make these companies, these customers, your best customers?
To help you this this endeavor, here is a tool that I use to evaluate and find a company’s ideal customer:
Ideal customer profile
Purpose: The purpose of this customer profile is to specifically define the type of customers that you want to target. These qualifications are simply examples of the type of characteristics you should be looking at in your target ideal customers. It will be used as a “filter” to eliminate chasing after the wrong type of customers and thus saving you a great deal of time and energy. You should expect this effort of filtering will give you the following advantages:
- Cut down on the amount of quoting you do
- Focus on the right customers
- Let your sales people know what type customers you want and should be targeting.
- Allow you more time to service the right customers
Part one: Psycho Graphics:
Note this list was developed with a high-tech company in mind.
So, in this case the ideal customer:
- Places a high value on what we do best
- Quality products
- Quick turn capabilities
- Wants to be a true partner
- Respect and values what we do
- Sees us as part of their future
- Are in a good market
- Are financially stable
- Pay their bills on time
- Are willing to pay for what they get
- Are serious about buying a great board to go into their great products
Technology: Then in terms of technology and matching that customer’s technology needs with our capabilities:
This ideal customer needs:
- Up to 18 layers (sweet spot 6-12 layers)
- 4 mils line and spacing
- FR-4 family/RF/ Hybrid/ Polyimide
- IPC 6012 class 2 and 3
- Heavy copper
- B&B Vias
- Military, medical, commercial, Space and Avionics
- OEM’s preferred (we of course do work with CMs)
- Check web site capabilities chart for a complete list of technical capabilities
Services: And finally, in terms of this company’s needs.
This company needs:
- Quick turn
- Product development
- Working with engineers and designers
- Some R&D
- Low to mid volume production
- High Reliability
Obviously, this ideal customer template can be varied to match your specific product offerings. But the important thing is that by developing and using this template you will not only develop a filter for selecting the right target customers for you to pursue but you will also be able to develop your actual sales strategy based on successfully pursuing and capturing this kind of customer.
From this template, you will develop a list of the right customers to go after
You will develop the right customer made strategy and tactics to win turn these right companies into the right customers.
Probably what is most beneficial in developing an Ideal customer template is that you don’t waste time going after the wrong customers but rather spend all your time, money and energy going after the right ones. In short you learn to go where the money is. Its only common sense.