Archive for category Business
We have talked a lot in this column about how board shops should treat their customers. How they should try to get to know their customers and their needs. So now let’s switch things around and talk about how customers should treat board shops, how they should work with board shops to get the best products and the best performances out of them.
For years now we have been talking about the new way of doing business. We have discussed things like what I call the “gray market” where companies like to buy their PCBs on line without ever having to talk to anyone, which by the way I consider the ultimate step in the commoditizing of the printed circuit board as a product. The trend in the electronics market has been to trivialize the circuit board to the point where the technology is considered pedestrian, repeatable and in some cases not even worthy of its own ITAR protection.
Companies can buy boards off web sites with a computer and a credit card without ever having to talk to anyone.
The sales people I work with find themselves overwhelmed with frustration caught between a rock and a hard place with their management whipping (yours truly included) them to get out there and visit those customers. Meet with them face to face; while those wily customers do everything they can to make sure that doesn’t ever happen, putting up barriers made of anything they can imagine to keep those sales people from seeing them face to face and in person. And that’s just the buyer, forget the chance of ever seeing anyone from the rest of the project team.
In short the relationship between the board shops and their customers is now virtually (no pun intended) non-existent.
And that spells trouble. Big trouble. All business is about people, people talking to each other, people understanding each other and yes people caring about each other. And now that has been lost. People are not talking to each other…pretty much never.
So where does that leave us? It leaves us to where we are today when we have the biggest gap between the people who design and engineer the end product and the people who build the boards that go into that product so that now the people building the board have nothing more to go on than what they are asked to build actually; just what is in front of them. They are operating in a vacuum.
In the old days, back in the days before the internet these people used to talk to one another. The customer’s project team would visit the board house or vice versa or both and then they would discuss the project. Then the customer would talk about the project in detail with her vendor. He would explain what they were doing, she would explain why the boards needed to be the way they needed to be and make sure that the people building the board understood why the board needed to be the way it needed to be. In these meetings the board guys would get a good understanding of what their boards were going into and why certain parameters were extremely critical. They would be exposed to the whole picture to the point where the customer’s call outs would make sense to them. And yes often around that meeting table ideas would be exchanged. The board guys could and did come up with suggestions and improvements for making the board a more effective component of the end product as well as more easily manufacturable and yes often, surprisingly often, less expensive.
And then through this process another thing would happen. The teams, the customers and the fabricators would bond, they would start becoming one team, real partners to the point that they were all working on the same project with the same goal in mind, the success of that project. They would become brothers and sisters in arms working for one common goal. This of course would cause them to be open and honest with another. People from both sides of the relationship would get to know each other. The company to company relationship would far exceed the buyer to salesperson only relationship (if you want to call it that) we have today. The teams would get to know each other all of them from engineers to the quality people to program managers they would work on the project together. If the boards were particularly difficult and the shop was having a hard time building them; their customer, their partner would send their team in and they would work side by side solving the problems and thus successfully producing good boards…together….as a team.
Now the irony is that today our end products are more sophisticated than ever. The PCBs to go into those products are more complicated than ever but now we have no partnerships. People in both companies seldom if ever talk to each other never mind actually meet. This has got to change. We have to go back to those pre-internet days where people met, discussed, came up with common solutions and goals, got to know and trust each other and work together building the products of tomorrow. As an old PCB guy I am looking right at you our customers right now and saying clearly and in plain English. “Dear customers we can’t do it without you. Come and visit us, Let us visit you, come and get to know us, come on let’s work together on making your products better than they have ever been.”
Stay tuned as in future columns we’ll talk about the specific steps we have to take to develop those partnership; steps that will make both of us better together than we can ever hope to be apart, the way things are going now. So check in with me next week and we’ll go there…together. It’s only common sense.
Choosing the right PCB vendor is critical to your success
Choosing the right PCB vendor is not as easy as you want to think it is. There are still many contract manufacturers out there who believe the myth that all PCB shops are the same and that in the end it’s only a matter of basing their decision on price and price alone. Oh, sure you’ll make yourselves feel better trying to know more about who you are dealing with. Some of you will actually visit potential vendors and perform surveys on them. This is a good thing, sometimes, because there are some shops who look fantastic when you visit them, pass your surveys with flying colors, and then go on to be a disaster when it comes to day by day performance. That’s because selecting the right board shop goes further than what it looks like on paper, or what it looks like period. I know some great looking shops that can’t perform worth a darn and then some of the ugliest shops you’ll ever see that are great performers.
Putting all of that aside, here are five good ways to choose the right PCB vendor for your contract manufacturing company.
- Ask them about their delivery and quality performance. Actually, ask them to back up what they claim their performance is. Ask to see the charts, the numbers. They are all going to tell you that their delivery and quality numbers are in the high 90’s don’t believe them, ask for proof. I mean look them in the eye and ask for proof, hard evidence, of this stellar performance they are claiming to have. Ask them how they measure this performance. An honest measurement for delivery is whether or not they meet the original date. Some companies will get a new catch-back date from their customers and then meet that date and call it on time. That is not on time. Meeting the original delivery date is true on time performance, no exceptions!
- Get references. Why doesn’t anyone do this? Ask them for references and then call those references and ask what their experience has been. It’s even better if you now someone who is or has been one of their customers and get their opinion of what’s it’s like to deal with this vendor. Find out for yourself. Do your research.
- Ask them if they are financially sound. The last thing you want is to invest in a vendor that will be out of business three months into the relationship. The repercussions of that situation are endless, especially when their doors are locked and your product is held hostage.
- Ask them how they handle customers issues. You will find that most customer/vendor relationships are formed in hardship. Any time you work with a PC shop there will be issues, there always are, and how you are treated dealing with those issues will end up making or breaking the relationship. Ask them to tell you about a time they had an issue with a customer and how it was handled.
- Once you decide to use a shop, start them off with a fairly simple order. Too often customers will lead off with their most challenging board. The one that they’ve had a difficult time sourcing, the one that everyone has had a hard time with. Do not give them that board. The first order should be an audition order. It should be simple and straightforward technology. You are checking out how their system works. How efficient their quote process is, how easy it is to place an order and of course how they perform on that order. Once you have a good feeling about their logistics, then start placing more orders and even get to the more challenging ones.
And one more, in the spirit of under promising and over delivering there is one more thing to think about and that’s the people. In the end it’s all about what you feel about the people you will be dealing with. You are after all, getting married to these people, not the company but the actual. people you will be dealing with. What kind of vibe do you get from them? Do you sense they respect their customers or do they delight in telling you some “the customer was stupid and we were so smart stories”? don’t laugh it happens all the time. Remember that your company and this company, your people and their people are going to be significant partners working towards the success of your company, so choose wisely my friends. No survey form ever tells the true story of the actual people you will be dealing with.
And, finally beware of board shops offering great price incentives, because in PCBs, like everything else, you get what you pay for. In the end a ten or even twenty percent discount will not make up for boards that are late holding up your production lines and causing late deliveries or worse yet, boards that have poor Quality causing eventual field failures on products that have your name on them, not that board shop’s. Once that happens, buying the cheapest board that money can buy will no longer seem like a great idea. It’s only common sense.
Artwork courtesy Bob Tarzwell (gallerydeboer.ca/portfolio/tarzwell-robert/)
For many years now, too many that I want to count, I have been a real pain in the neck advocating that all board shops need marketing, they need to advertise, send out newsletters, hire and manage, measure, and motivate sales people, create forecasts, and account plans and pay attention to their customers’ needs. Interestingly enough, up to a few short years ago there were only a few tier two contract manufacturers who were doing the same things. I know, because I managed to work with the few of these rare companies who were willing to invest time and money into their own sales and marketing efforts.
I was never sure why there were son few CMs interested in sales and marketing? There are over eighteen hundred contract manufacturers out there and the vast majority of them and I mean a real vast majority of them are under fifteen million dollars in annual revenue, in fact, most of them are under ten million. So, I wondered what was the deal here? Why did so many contract manufacturers feel little or no need to pay the slightest attention to the sales and marketing end of their business?
One of the reasons was I came up with was that they didn’t really need to go out and find new business because it always came to them one way or another, they always had all the business they needed. So, I dug a little deeper, why did they have all the business they needed to stay busy and keep making a profit? It did not take long to discover that many of them started their business to service a larger company that needed them to produce a special unique assembly for them. Often the people who started their own contract manufacturing company had done so at the requests of a large company, often one they worked for. Often, the person who started the CM company had run the assembly department of that larger company, or they had been responsible for specific product line that the larger company was producing and that finally powers that be decided that it would be more economical for them to have those products built outside of their company by another smaller company they would help launch. It was amazing, how often this was the case.
And then, from that guaranteed base of business the new contract manufacturer grew by adding just one or two other customers a year to the level where they always had enough business. In fact the company that had originally helped launch them, did not want them to have too many other customers.
But now all of that has changed. These companies have grown where now they have to maintain a certain level of business just to handle their overhead costs. Often the original projects that had started them in business in the first place have disappeared. So now they find themselves in the position of having to get out there and find more business.
Unfortunately, this is proving to be a daunting task for a couple of reasons. The first one being that they do not have the sales and marketing infrastructure to grow their business. They need to hire sales people and develop and implement sales and marketing plans; and the second reason being that the sales cycle, the time it takes to acquire a new customer, is a long one in their business. It can take from eight months to a year to find and win a new customer, and then in many cases it takes at least six months to scale that customer up to production levels. It is also much more difficult for contract manufacturer to handle a lot of customers. By the very nature of their business, they are structured to handle only a few good customers at one time. At least most of them.
Because of these factors it is apparent that contract manufacturing companies need as much help with sales and marketing as the board shops always have. So, it’s with that in mind that I am going to focus my next two columns on contract manufacturers, helping them to develop sales and marketing programs that will help them kick start their sales efforts and started on the road to successfully filling their shops.
In next week’s column, I’ll be talking about how to find and hire the right sales people. And then how to manage, measure and motivate them. I’ll talk about incentive packages that assure results and how to keep sales people focused to success. I’ll also discuss the pros and cons of direct sales people versus independent sales reps.
The following week, I’ll talk about marketing, including creating and implementing great marketing and branding packages that will help contract manufacturers stand out in their marketplace. We’ll talk about social media, advertising, newsletters, and all other aspects of marketing your contract manufacturing company.
And sometime in the next few weeks, I’ll dedicate a column to how to select the best possible PCB vendors for your specific needs, something that is near and dear to my heart. Stick around it’s going to be fun, and good for you too. It’s only common sense.
The hottest topic on the PCB circuit these days is the lack of young people in our industry. As the rest of us get older, it is finally occurring to us that there is no one following in our footsteps, there is no one there to fill our shoes, when we decide enough is enough.
Thinking about this the other day, I remember what it was like when I started in this so industry so many years ago. It was with a company called Maine Electronics, a wholly owned subsidiary of Rockwell International. Originally, I was supposed to be an English teacher, but after about an hour of student teaching, I decided that honorable career that it was, teaching was not for me. So, then I had to decide what it was I was going to do to make a living if teaching was out.
Through a series of circumstances and coincidences and a long story best left form another day, I found myself hired at Maine Electronics as what was then called, a Program Coordinator, a fancy name for an expeditor. My job was to track and report the status of every single PCB in the programs I was handling. In those pre-computer days, taking status and tracking boards was all done annually by myself and seven other Program Coordinators. It was an interesting group. All of us were young, all of us were men of course, it was only much later that management realized that women could track and expedite boards as well as men could, better actually. We were all under twenty-four. And we all had some college, some of us had degrees but most did not yet. All of us with the same demographics politically and socially, which meant long hair and liberal politics which was ironic when you think that we were working on Minuteman missiles and F-11 bombers.
You can just image the fun we had chasing our boards all over the shop, and competing with one another to see who could get supervisors to work on their boards first. It was a time when our technology was respected enough that our customers were used to late dates and catch-back schedules. We lived under a great deal of pressure but as always when looking back at hard times, today when we get together, we consider those the good old days.
I was fortunate to begin my career in a company what was one of the leading PCB producers in the world. A shop was run by very experienced PCB experts from either Rockwell Autonetics in Anaheim or left-overs from the previous company Maine Research which had been designed and built as the most advanced PCB facility in the world. Just to give you an example we were building controlled impedance boards before people even knew there was such a thing.
But the point I want to make, is that we young people were trained every day of the week. Everything we did was a lesson for our future. Once we had been there a year or so they started grooming us for the next step in our career development. Some of us were destined to become process engineers, others were to become supervisors or Quality managers and a few of us where trained as sales people. In other words, from the very first day we were hired we were considered long-time members of the Rockwell family, and training us was considered an investment in the future of the company. Ur managers were tasked with starting all of us on the career path of our choice…within the company.
They were always working on the future of the company, with great intention. There was nothing haphazard about it.
And now, as we look back on the past twenty years how many of us have done that same thing? Not many of us, which is why we are in the dilemma we are in today. I daresay part of it is due to the arrogance of the boomer generation. We’ve always thought that we were the coolest generation with no regard or much respect, for that matter, for the generations that followed us. We thought we would live forever, so why bother looking back? We could not imagine a world without is and so we concentrated on the present with little interest in the future, especially a future we would not be part of.
Thus, here we are, a bunch of old gray men and a few better-looking women wondering how we are going to sustain our industry going forward, wondering who is going to carry the torch into the future.
But here is a reality check for you; it’s not really that we have had a shortage of young people in our shops because our companies actually do have some young people working in them. Take a walk around your shop, look around. Notice anything? Yes, that’s right there are young people there. They have been there all along, working in the plating department or the drill room or in shipping. Yes, they are there but we have not taken the time to notice them. We have not taken the time to talk to them, to get to know them, to find out what they are like, what they like to do when they’re not working. We need to sit down and talk to them and find out what their career aspirations are? We need to work with them, develop them just like those professionals at Rockwell did with me and my fellow Program Coordinators so many years ago. And then we must sit by their side and start working out their career path. Showing them that a career in the PCB business can be a good career. Demonstrating to them just how important our work is. Explaining to them what these little green cards go into and how they are changing the world.
We should make them believe that this is a good industry, an industry to be proud of and an industry that can provide a bright future for the person who is willing to work and to learn. And we should be willing to teach that person and help him or her to become a viable contributing member of our PCB community both today and in the future. It’s only common sense.
Times may have changed, but some things never do. The old adage that the customer is always right still stands. No matter how hard it is to accept, you have to live with that law if you want to stay in business.
We all know that it is harder to respect the customer now than it has ever been. Customers are much more demanding and insistent that we do things their way. And the irony is that they want less direct communication with us than ever before. The want to do everything online, and they won’t pick up the phone if you call them. And heaven forbid if you try to visit them in person…they want no part of that.
So you are supposed to figure out what it is they want, and in many instances with absolutely no help from them. Many times they will even get angry if you ask too many questions, even if those questions are designed to help give them what they want.
Difficult as it is, this is the world we live in, so we have to do whatever we can do make it work. Here are five things you can do to communicate with your customers and educate them, so they can help you help them to build a better product.
- Show them how valuable your knowledge can be to them. Instead of trying to “one up” your customers by showing them how much smarter you are about PCBs, try to educate them in a friendly and helpful way. Offer them seminars and webinars on how a board is built. Send them presentations and books about how boards are fabricated. Do whatever it takes to make your customers “board smart” because the smarter your customers are about building your product, the better their tools will be and the more respect they will have for your technology and what it takes to build their boards.
- Invite them to your facility. Look, captive board shops are a thing of the past. Many of the people we used to interact with, the ones who were buying boards or supporting those who bought boards, had come out of their companies’ captive board shops. For the most part these people are long gone and the people who have replaced them have never been in a board shop, so invite them to yours. Ask them over for the day, feed them, lecture them, tour them and educate them. Bond with them and create a partnership. This will go a long way toward making you their trusted advisor and expert on printed circuit boards.
- Learn everything you can about them. Visit their company. Find out how their boards are being used. Learn about their marketplace and who their customers are and what they have to do to succeed with their customers. Go to their receiving department and learn what they do with your boards when they arrive. Try to find ways to make it easier for them to use your boards. Could you package the boards in a way that would be more compatible with the way they receive the boards? Teach them how to handle your boards, how to pre-treat and bake them if need be. Show them how boards fabricated from different laminates should he handled differently and why. Be their expert, their partner, and their friend.
- Help them design the boards so that you will build them the best boards for the best price. I know this is not always easy and often they don’t want to hear what you have to say, but keep trying. If you have been working at doing items 1, 2 and 3, they should have enough trust and respect in you by now to listen to your advice about designing boards and calling out the right laminates in a way that will make your job easier while giving them the best product at the most economical price.
- Go back to what we said in the beginning of this column: the customer is always right. There’s another old saw that is relevant here: “He who has the gold makes the rules.” Live by that; it’s the only way to go. And finally, one more (there is always one more in my “underpromise and overdeliver” world):
- Lead the way when respecting your customers. Show your staff by your example that you’re in business to serve your customers and that without customers you would not have a business. Never allow your folks to speak disrespectfully about your customers. Make sure you never speak disrespectfully about your customers, because if you do, you are giving everyone in your company permission to do the same.
The customer is always right and it is your job as a company leader to understand that and make sure everyone in your company understands it as well.
It’s only common sense.
———————————————————————————————————Dan Beaulieu is a 30-year PCB industry veteran, sales and marketing expert, and writer. He has contributed to numerous industry publications on topics ranging from sales and marketing, to board shop performance.
Okay, I give up, you don’t have the funds to properly market your company. You don’t have the less than one percent of your revenue that it would take to get your name out there like it should be. Or maybe you don’t want to. Remember the motto of PCB shop owners, “when your sales are low fire your sales people and buy a drill.” So maybe you’re just one of those guys who doesn’t get it. You never had to market your company before so why should you start now. Every time things got hard you just muddled through, cutting corners, and laying off people and holding costs until the business came back…because it always did, sooner or later. You’re not sure why, but it always did. So now even if business is down you see no reason to do anything but the same thing you have always done and that is…do nothing.
Well let me ask you, how’s that going for you? Or maybe I should ask, how did it go for the over one thousand or more North American board shops that have gone out of business in the past twenty-five years? They didn’t do anything either. Some of them just kept buying equipment, equipment that in the end earned their creditors some of their money back. Or they just kept cutting costs to the point where one day, poof! They just disappeared into thin air.
Get this guys, times are not what they used to be. I know that in the seventies and maybe early eighties you could just sit tight and the business would come to you. You didn’t need to market, you didn’t need sales people. Back then all you needed was to build boards and they would come. But back then North America had over eighty percent of the PCB business world-wide and back then there was no Asia factor and back then, well how much are we going to cling to this “back then” stuff. The world has changed get over it, move on and do something about it.
And if finally, you get the point and at last realize that you are going to have to do something, here are three easy things you can do right now to market your company and get your name out there.
- Send out value-added newsletters about your company. They don’t have to be long and they don’t have to be fancy they just should have information that your customers’ can use. The newsletter should be made up of technical information that will help your customers with their PCB needs. They key is to build a data base of customers and potential customers and get your newsletter out on a regular basis, say about every six weeks. This means that with very little effort on your part your customers will be hearing from you on a regular basis. And once you have their attention you can stick in an offer that will serve as a call to action for them to start buying from you.
- Write and publish a regular column. There is something about appearing in print that somehow makes you an expert, whether or not you are one and believe me I know. You can write about a specific technology, or service that your company is good at. Writing a column will go a long way towards branding your company. And once columns are published you can use them for your own marketing efforts as well
- Issue press releases: This is the easiest one of all. Put together and send out press releases about your company when you buy a new piece of equipment or hire a new sales person or a new director of operations, or you are heading to a trade show to exhibit. This will keep your name out in the market and the best part it cost nothing. Done right, a well-written press release is as good as a paid ad.
And speaking of ads, there is one more, always under promise and over deliver. And my apologies, this is a bit of a commercial, but an important one. Spend a little money on some advertising. It cost much less than you think, and a publication such as Iconnect 007 offers special packages for all budgets. And the neat thing is once you are advertising with a trade-zine such as ours there are all sorts of bonus services that you will get; from free interviews to press release publications to even advice on how to send out the right message.
None of these ideas are difficult and except for the last one, none of them will cost you a penny. And by the way doing these things will help you to focus and define your company’s direction which is always a good thing. It’s only common sense.
All customer service starts at the top. It’s a cultural thing. To have great customer service you have to have respect for your customers, everyone in the company has to respect the customer not just the customer service people.
Look, it’s pretty easy to pass everything along to the customer service people (by the way when I say customer service people I also mean inside sales people because I have found that in our industry these terms are pretty much interchangeable). So for the record here, if a company wants to have great customer service everyone in the company and I mean everyone from the owner to the president to the sales manager to the plating supervisor to the maintenance person to the person in shipping and yes to the customer service person everyone has to be completely focused on the customer. Everyone has to live, eat and breathe customer service. Everyone should be staying up nights trying to figure out how to deliver the best possible customer experience on the market today, and the company leader should be personally leading that charge.
You should also remember that when it comes to the ways customers judge your treatment of them you are not only competing against other board shops but you are also competing against the best customer service companies in the world from Disney to L.L. Bean from Tiffany’s to Nordstrom’s. That’s a lot of pressure!
Yes, great customer service comes from the top and filters all the way through the organization. But please be careful. Be very careful because that sword cuts both ways. As the leader of a company you have to make sure that at no time and I mean at no time will you ever bad mouth a customer. If you get angry at a customer, if you get frustrated with a customer or if you just don’t get along with a customer, you never let than show. You never let anyone in your organization hear you bad mouth a customers. The fact is that anything that comes out of your mouth is multiplied ten-fold when it hits the troops. If you are a company president and you publicly knock a customer you are literally yelling to your people that they now have permission to knock that customer as well. You will have set that example and once that happens there is almost no turning back.
Have you ever said something like this?
My sales people are too close to their customers they need to be reminded of who they work for?
Look I don’t care what the customer wants, this is the way we do it here, this is our policy.
So what if we’re late, everybody is late once in a while? We’re a board shop, board shops screw up once in a while, and they are just going to have to understand that.
Man, I hope you have never said any of these things or anything close to sounding like these things. But if you have, then you better rethink your role in the organization because you are sending a terrible message to everyone who works in your company, particularly those who are working on the front lines, like your customer service and sales people.
The point here is that you can come up with all kinds of great examples, ways to deliver great customers service and you can teach them to your customer service people until you’re blue in the face, but if the rest of the organization doesn’t buy into it you are wasting your time.
True company leaders lead, they lead the charge for great customer service. They monitor what their people are saying, making sure that they are always positive when it comes to the customer. They lead discussions and brainstorming sessions to find newer and better ways to “WOW!” their customers. When there is an issue with a customer, a problem to overcome, the true leader will always take the high road and do what is best for the customer and he or she will do it loudly so that everyone in the organization gets the message and completely understand that this is a great customer service company.
We’ve been talking about the president of the company but this kind of positive customer service modeling behavior has to permeate throughout the entire management team, from Directors to General Managers to Supervisors and Leads, everyone has to bring the customer to the table, everyone has to make sure that the people who work for them completely understand that there is no skimping when it comes to respecting the customer. The customer is king and the customer is the one who pays bills; and without customers there would be no business, there would be no jobs and there would be no company. It’s as simple as that.
In short everyone in the company works in customer service, everyone in the company has to have the customer foremost in their minds at all times and everyone in the company has to ask every time there is a decision to be made, “Will this be good for the customer?” It’s only common sense.