We ended last week’s column with a group of designers from a high-tech company asking me the ignoble question, “Why do all PCB shops suck?” And, I promised, I would not only address that question but also explain why there are two sides to that story.
First, let me say that the designers who asked me the question work for a company that builds innovative products of the future, that fact is vitally important to this story.
Now I will tell you what I told them.
For the most part board shops are trying to do the best they can with what they have. But the problem lies in the fact that most of our customers are now making a concerted effort not, and I repeat not, to talk to us. All sorts of barriers have been created to keep board shop representatives, engineers, and quality experts from talking to anyone at your companies:
- You get furious if a CAM person from a board shop asks too many questions about your design. In fact, some designers have been told to never listen to anybody at a board shop telling these designers that they are in charge and the people at board shops don’t know anything. Tell them to shut up and build it the way you designed it.
- You have created such a barrier ridden bureaucracy that it is almost impossible to get through to you to have a decent conversation about your board needs today and in the future.
- You have found middle men purchasing systems like Exostar which contribute nothing but “gorilla dust” to the vendor customer relationship. Thus, making it near impossible for the vendor to talk to the customer.
- In fact, some of the larger companies have created such a barrier-ridden bureaucracy that their own engineers avoid going through the “proper channels” when they need to buy prototypes or proof of design boards, preferring instead to use online board buying services and their credit cards, thus circumventing the clumsy purchasing system completely.
- Part of your purchasing strategy is to “commoditize” the PCBs to the point where you feel comfortable saying that all shops are alike, so you just got the cheapest one, justifying your decision to use sub-par vendors who probably really do suck.
- You would rather listen to your suppliers who will work with you to spec in something, (laminates for example) without even talking the board shop who will have to process boards with that new product without knowing or even caring if that product might be impossible to process in a normal board house.
- You play fast and loose with your qualification expectations creating a double standard for the Asian board houses versus American board houses
- You subscribe to the theory that board shops, particularly American board shops, are making too much money, so you must beat the ever-loving crap out of them to get prices as close to offshore prices as possible. And then you wonder why they can’t afford to buy that LDI or Laser drill that they are going to need to build your boards of the future.
- And in the case of this particular company, remember them? The one who asked me the question in the first place, you are building products of the future with technology that no one has ever seen before, yet you are discouraged from having any communications whatsoever with the people who are going to be building your boards. So that the first time they ever see these requirements is when you send them the quote. And then expect those boards quoted in one hour, and please no questions asked!
Once upon a time companies talked to one another. They worked in partnership; vendors and customers working hand in hand to develop processes to build innovative technology boards that had never been built before. Companies like Martin Marietta, Lockheed Sanders, Raytheon, and others used to send teams of experts into board shops for weeks at a time to work with the board shop’s teams to find ways to build boards out of everything from LMR Kevlar, to Copper Molybdenum to Copper Invar Copper to Thermount, boards that would go into programs like Tomahawk, Lantern D-Smack and Trident. And these teams would stick to it until they developed a process and got the boards right. That’s how things got done.
Now our customers won’t even allow sales people to enter their building. Customers won’t even pick up the phone when a vendor calls with a question or an idea, never mind allow that vendor to talk to their technical people.
Some of the top companies in this country, companies building products of tomorrow have people engineering and designing those products, who have never even been in PCB shop and because of that have no idea how a board is processed.
These then, are all contributing factors to why board shops suck.
I hope that someday our customers, and yes, our vendors will get it. Someday they will realize that PCBs are much more technologically challenging than they like to believe and that there will be a new-found understanding that a twenty-eight layer blind and buried via printed circuit board is not a commodity. That today’s high-tech circuit boards are very sophisticated and not easy to build, especially in the 72 hours or less you give them to get them built. Its only common sense.
A book recommendation from Dan Beaulieu.
The Camino Way: Lessons in Leadership from a Walk Across Spain
By Victor Prince
Copyright 2017 Amacom
Pages: 199 with Index
What a story! I didn’t even know about the Camino Way until I read this book.
Then I had to find out how reading about this book and what a pleasant surprise that was. Author Victor Prince uses the backdrop of his own pilgrimage along the Camino Way to give leadership lessons.
All along his thirty-day journey he received like every other pilgrim who takes this journey he stopped to have his Pilgrim’s “Passport” which formally documented and officially marked every step of his journey. He notices that on the back of the passport titled, “Spirit of the Camino” he found seven guideposts for not only the journey but also for all aspects of a life being well-lived. It was on these guideposts that he constructed his very useful and inspiring book.
Here they are:
- Welcome each day, its pleasures, and its challenges
- Make others feel welcome
- Live in the moment
- Feel the spirit if those who have come before you
- Appreciate those who walk with you today
- Imagine those who will follow you
Mr. Prince took these very valuable guideposts and turned them into chapters of the book. Relating first where he was on the pilgrimage in each chapter, talking about his own journey through life as well as the people he meets along the way.
Then as a special treat each chapter ends with what he calls a Camino Leadership Lesson here he applies the guideline to business and yes to life. Here is discusses lessons like, “Identify Hidden Pockets of Value” or “Maximize Recognition” where he demonstrates the value of recognizing people for their contributions.
And finally, he wraps up the book with a summary of lessons learned from Camino Way. The very fact that he ties in a religious experience with a personal experience with a business lesson was surprisingly appealing to me as I hope it will be for other readers.
This book is a true and unique pleasure to read and ponder.
Most people will tune out when you tell them how great your company is. The will even turn you off if you spend too much time talking about all of the great things your company can do for them. And they will practically throw you out of their office when you start to pull the dreaded Power Point presentation out of your bag! They expect you to tell them how great your company is, you are after all there to sell them on your company and its’ services they would be shocked if you did anything but that and that’s the problem. They don’t really care what you say when it comes to talking about your company to the point where it only becomes a bunch of blah, blah, blah, yada, yada, yada to them sort of like the parent talk in Peanuts.
So what are you supposed to do about it? How do you get your message across to them if they tune you out when you even come near talking about your company? Simple you get other people to talk about your company. You get your best customers to tell potential customers about your products and services. There is nothing more powerful that a customer’s testimonial or a customer’s service story.
Look, it’s pretty simple people like to hear what other people have to say about a product they are thinking of buying. We all do it right?
When you’re looking towards buying a new car you are going to talk to people who have the same brand and model of that car. Hell you’ll even stop a person in a super market parking lot and ask her about her new Lexus if you are thinking of buying one for yourself. And most importantly you could actually base your buying decision on what that person says to you in the three-minute conversation. You will take that person’s opinion much more seriously than all of the millions of dollars of advertising that Lexus has spent promoting their new model.
You’ll do the same thing with just about any other major purchase you are currently considering. We put much more weight on what the person who has used the product says that anything the manufacturer of that product has to say.
The same applies in our business today. We can tell our customers until we are blue in the face what a great product we have but it is not going to amount to a proverbial hill of beans when compared with what our current customers say about us.
Now I hope we all have some happy and satisfied customers…some “best customers.” If you don’t, or if you feel that none of your customers will want to say nice things about you then you have much more serious problems and you should go take care of those problems before you try to sell anything to anyone. The old “we’re no worse than anyone else” justification has no place in business and no place in the referral business.
Okay not that this is out of the way let’s get back to asking your good and satisfied customers for referrals. In his new book High Profit Prospecting, Mark Hunter gives is a four step plan for getting referrals from customers:
- Ask for referrals. Every time the customer sees value in what you’re selling is a time when you should ask for a referral.
- Connect with the referral. Ideally the person who gives you the name will connect the two of you through an email or phone call. Even if that is not the case, following up as soon as possible is showing respect to the person who referred you.
- Keep the person who gave you the referral in the loop. Don’t keep the person who gave you the referral in the dark. By keeping them in the loop you will encourage them to provide you with more referrals.
- Be appreciative each step along the way. Nothing you do will create more referrals along the way than showing appreciation to each person in the process.
Once again there is no better way to get new business than to have your current satisfied customers tell other customers about your products and services.
One final thing to remember and that is that good referrals are based on good service, actually outstanding service. You have to be good enough that your customers will be proud and happy to be giving out your contact information to others. You have to be good enough so that you’re customer actually feel so smart for using you products and services that they want to tell everyone about you and your company. Its only common sense.
I recently got an e-mail from a good friend of mine. He has been in the industry even longer than I have, and that’s a really long time. He works for one of the most high-end defense and aerospace companies in the world. His company has also used their technology base to branch out and get involved in other high-tech marketplaces such as very sophisticated medical electronics.
He writes, and I quote:
“I hesitate (slightly) to complain but here goes on two fronts.
My company has to use domestic suppliers for a lot of our products and that is getting more difficult all the time. Our technology is getting so sophisticated that we can no longer use domestic suppliers.
Many people still think that PCBs for defense and aerospace products are simple technology with fat lines and thick boards, but that is no longer the case. New defense and aerospace products require higher technology, not to mention the fact that we have also branched out to bio-medical, chip-scale interposers, and a lot of other technologies, albeit in small volumes. All requirements we cannot get here domestically. Or we can get it domestically but not in a reasonable time frame. Nowadays we have 25-micron lines and spaces. Our target is 75-micron laser vias, thin dielectrics, and other small features. Swiss operations have supplied us with interposers and that will increase. We are NOT designing our own components but we are using commercially available fine-pitch devices. BGAs down to .5mm are now common for us, .3 mm pitch more so, and we are approaching much finer design pitches. But that all-important board on which that finer pitch BGA must be mounted will not come from this country… sadly.
What has happened to common sense? I have tried to treat others as I want to be treated and I know that the board industry is suffering, but for pity’s sake, why do I have to call and ask, “where is my stuff?”. If it were just one board shop, I would say good riddance, and move on. But, it is almost universal among our supplier base, that late deliveries only get discovered when we ask. Again, what the heck?? With the continued decline of the supplier base, one would think that customer service would get better. So, why not?
One former supplier’s rep was not even allowed to attend daily production meetings so she was rarely informed about part status causing delays in responses. What?? The work that our company now undertakes is not the long lead stuff of the past. We need 5 days turns on 10 layers, we need 20 days on 12 layers with Microvias with buried vias. Our domestic suppliers are happy to quote these requirements, but once we place the order, we almost never get the boards on time…if at all, thus leaving us with loaded pick and place machines and people standing by wasting time and money.
I am a little sad that the industry is where it is. It could improve but I’m not seeing it; and just keeping on the same path is not a long-term proposition for success. Being an optimist, I have some hope with some newly discovered suppliers and I’m keeping my fingers crossed that communications with them will not turn adversarial as they often have with our long-term suppliers adversarial.”
Just to be clear, this friend is part of a very good company, a well-known company, one that all high-tech board shops would be thrilled to count as their customer. He has been in the industry a very long time and is now ready to retire or as he calls it “re-purpose” his life. It’s sad that he will leave with this impression of our industry, an industry he has been an integral part of most of his life.
Please note that much of what he is complaining is the lack of good business practices, like open communications, telling the truth when making a commitment and then sticking to that commitment. Letting him know when a board is going to be late. These are things we have been talking about for years and yet we still have not learned how to do them right.
Personally, I still find myself arguing with some of the companies I work with about these things. I once had an ongoing argument with one of my clients about the importance of on-time delivery. He did not see the importance on delivering his boards on time. He even went so far as to tell me that his customers were not complaining so it wasn’t hurting his business, He was right for a while, the customers did not complain…they just walked away quietly without making a fuss. Apparently, they did complain, but with their feet, not their voice.
And sad to say, my friend and his company are not alone. I hear these kinds of stories of frustration about our board shops all the time. I was once invited to a meeting of designers working for another famous high-tech company building products of the future. Once everyone had been seated and the introductions done, the first question from the design department manager to me was. “Dan, can you tell us why all board shops suck?” Next week we’ll talk about what I told him, because like every other story this one has two sides. It’s only common sense.
Everyone is struggling to fill their factories these days, as the fight for more business heats up. It used to be that contract manufacturers had a good solid base of good customers, they could depend on year after year. Many of them were satisfied to pick up a couple of customers a year as their base remained stable, But, all of that has changed for a couple of reasons. The first being that attrition has set in, stuff happens, companies go out of business, or change direction, or have their products built overseas or they are acquired and somebody new and more powerful is making their contract manufacturing decisions.
So now my contract manufacturing friends have to find new and innovative way to capture more business. And, as we have been talking about, the last few week, finding new contract manufacturing opportunities is a much more intense process than selling bare boards, for example. Winning new EMS customers is a much longer and more arduous process, one that takes more planning, persistence, and yes, patience. This means that if you want to increase your business you have to start early, in most cases so early, that you won’t even feel you need new customers when you start in. Or, I have a better idea, never stop the first place.
Working with CM’s over the years, it has always surprised me that many of them managed to keep their companies full with little or even no real sales and marketing effort. When I’d asked them how they got their business they would tell me that it was word of mouth, or just a good reputation, or a good base of a few solid customers.
But now things have changed, and many CM’s are out there looking for new business, if you are one of them, here are five things you can do to kick start your sales and marketing effort going forward:
- Get your name out to the marketplace. No one is going to buy from you if they have never heard of you. Develop a good marketing and branding plan that includes social media, and implement it immediately. Tell your company’s story. What are you good at? Why do your customers like you? Why should potential customers work with you? Make sure you get some of your good, longstanding customers to vouch for you. Get their testimonials, these will be the most effective and powerful part of your marketing plan. Remember, you have over one thousand competitors out there and you have to be the one that is outstanding.
- Offer quick turn to new product introduction companies. Quick turn assembly services are in demand right now. You customers want to be able to get their initial products very quickly, and they are willing to pay for this service. Many times, they will provide you with the complete kit and you just have to assemble it ,I know that many of you don’t like to this because of lost revenue on the parts, but be patient, offering this service will pay off in the very near future. Your chances of getting the production business go up ten-fold if you have built the prototypes.
- Be willing to collaborate with other companies. There is always strength in partnerships. Instead of being limited by your own brick and mortar capabilities, be willing to extend a hand of partnership to other CMs who cannot do what you do and also CMs who can do what you cannot, because together you will be much stronger, and create a much stronger offering to your customers. There are many large CMs both domestic and offshore who are looking for smaller and more flexible CM’s to collaborate with to use as their new product introduction partners. Seek one of those and partner with them. It will be good for both companies.
- Find some good independent sales reps. And I mean good ones. Make sure they have business at hand that they can bring you. Let’s be get real, a good rep can bring you introductions. She can bring you RFPs but she cannot bring you the business. You are going to have to win the business yourself. But a good rep can bring you the opportunities and that is what he is paid to do. Find two or three very good reps and then treat them like part of the company, part of the family and they will deliver for you.
- And finally, pay attention to your customers. Go out of your way to always give them spectacular customer service and they will love you for it. They say I most businesses it costs about ten thousand dollars to acquire a new customer, but I would suspect that it takes even more of an investment to win a contract manufacturing customer so protect your investment at all cost. When you finally win that customer, do everything you can to keep him.
And finally, one more, always under promise and over deliver, right? Never stop, never ever stop your sales and marketing effort once you have started it. Keep it going, week after week month after month year after year and always be improving, getting better at it all the time and in the end, it will pay off. It’s only common sense.
Contract manufacturing is a service not a product. As CEMs, we are actually building someone else’s product, someone else’s baby. Our customers are putting the fate of their companies in our hands. If we build the product incorrectly our customers will be the ones to pay. In the end they are the ones who have their name on the product. They are responsible for designing, engineering, and marketing the products, we are responsible for the manufacturing of that product.
Think about that for a moment. Consider how much trust comes into play when our customers decide to turn over the manufacturing of their products to our contract manufacturing services. They are putting their company’s reputation in our hands, they are putting the entire future of their company in our hands.
This is a huge decision on their part. They must make sure that we are able to handle all their needs. They should be certain that we have all the processes in place to deliver a product that is as good, if not better than the one they themselves could produce, and at a better, more competitive price. So, these companies have two very difficult decisions to make. The first being if they should use a contract manufacturer in the first place; and the second, which contract manufacturer will they select in the end? And this is where, we as professional sales people come into the picture. It is our responsibility to convince our customers that they will be in good hands if they decided to trust out company with the fabrication of their product.
When you consider all these factors that go into a decision like this, it become evident that ours is not a simple sales process. It’s not merely holding up a product and giving a sales pitch for why the customer should buy our product. No, not at all. This sales process is very personal and some would even say emotional. In a way is almost like turning over your child to be raised by others.
When selling contract manufacturing services, as great sales people, we should focus on making our customers feel completely comfortable and yes, safe, and secure, enough in our company to choose us to build their products. This means that when selling to these customers we must focus on the following key factors:
- Reliability: They need to understand, nay believe, that we are completely reliable. The best way to do this is through references and testimonials. They should be able to see a track-record fully based on happy and satisfied customers. Customers who are happy enough with our performance that they are willing to talk about it to other customers. If our target accounts see that we have customers who are willing to stand up and vouch for our reliability they will feel safe a secure in making their decision to engage with us.
- Consistency: When potential customers come to our company we must prove to them that our process is in control and that are production lines are putting out the same great consistently high-quality products from the first assembly, to the last. We must demonstrate that we have all the right systems like ISO in place, assuring them that we have a fool-proof quality assurance system.
- Credibility: This is key. They need to know that we are completely truthful in all our business transactions. This is the time for open-kimono discussions. Our company must be on an open-book basis to our customers. We should concentrate on showing them that we are a real, viable, and yes financially sound company, that will not only be there for them today but in the future as well.
- Flexible and easy to work with: This is so very important. As a CEM, you are literally their business partner in a relationship that is much more intense than the typical vendor/customer relationship. As a great CEM partner, you must always have the customers’ welfare at heart, realizing that you are playing an integral part in their success as well as yours. You have to always be prepared to walk that extra mile to assure that your customers are selling the best products money can buy, products that your company is producing for them.
As a salesperson, it is your responsibility to convey all of these points to your customers, to assure them that your company will indeed treat them as true partners. But you cannot do it alone. The most important thing to remember about selling contract manufacturing services is that the entire team should be involved in the sale. From the owner/president of the company, to the program managers, to the Quality managers, to the department leads, to the all-important purchasing manager, everyone should take part in convincing your customers that your company is unquestionably the most qualified, reliable, consistent, credible, flexible, and capable company in the industry to build that their products, it’s only common sense.
Does anybody know your name?
Unlike PCB shops where there are now less than 200 left in North America, there are well over 1000 contract manufacturers of all shapes and sizes. Everyone knows the big guys from Celestica, to Flextronics, to Sanmina to Plexus all of them doing hundreds of millions to billions of dollars, but what about all the others? Most of them are under twenty million dollars and many of those are under ten million. There is nothing wrong with this, most of these companies are very good, very well-run companies.
But the true problem lies in the sheer numbers, there are so many of them that it’s hard to tell one from the other. There are very few of these companies that can be identified by more than a handful of companies who, work directly with them, which is the very reason today’s contract manufacturers need to develop and implement their own ongoing marketing and branding plan.
I say “implement”, because that really is the key to any good plan, especially a marketing plan. Here are the more basic steps to developing and implementing your own customized marketing and branding plan:
- Tell your story: This is where it all starts. What is your company’s story, when you did you get started? Who started the business and why was it started? What is the company’s mission and vision? Talk about some of the history. This will be the foundation of all your marketing. It is also helpful for your own team to have a good understanding of the company that are part of.
- What are you good at? What separates your company from the rest of the pack? This is sometimes called your unique value proposition. What is your forte? What do your customers like about you? Why do they keep coming back?
- Who is your ideal customer and why? Speaking of customers, who is your best customer? Why are they your best customer? What markets are they in? Develop an ideal customer profile and use it as a template when going after other customers. These are the customers and markets you should pursue.
- Getting the word out: Now we get down to it. You know what your company is good at, you know what customers and markets you want to pursue, now it’s time to put your marketing together and get your message out there to the right companies. Done right, this can be very effective and will not cost you much money at all, in fact, you can do it yourself if you want. The first thing to know is that marketing is a mosaic and all the marketing options listed below are the tiles making up the mosaic. It’s up to you to decide what you want your marketing mosaic to look like based on which of these, “tiles” you decide to use. Here are three of the most important “tiles” to use in your marketing mosaic.
- Interviews: This is your chance to tell your story. You can be interviewed by one of the trade magazines like this one I-Connect 007, which offers all types of interviews from print, to audio, to even video. They will give you the opportunity to talk about our self and your company. Your story makes a great cornerstone for your marketing because as in the case of I-Connect your story is put in front of their thousands of readers, and once it has been published, you can use it for your own marketing and social media. You can put the interview on your web site and your newsletters. You can send the link to your customers. You give it to your sales team for them to send it to customers. If its print interview, you can have it reprinted in a glossy magazine style format complete with photos and use it as a hand out. All very effective and powerful ways to market your company.
- Press releases: Please send out press releases about everything that happens at your company; from hiring a new sales person, or general manager to buying a new piece of equipment, to updating your technology. Press releases are a great way to keep your name out there. And just like everything else you can re-purpose your press releases through your own marketing and social media once they have been published in the trades.
- Newsletters/ technical bulletins: This is the very best way to get your name out there to the right people. But this is not a “It’s Sally’s birthday!” newsletter. The best newsletters are filled with content that is valuable and appealing to your customers. Each newsletter should contain:
- A president’s message that highlights what has been going on at the company as well as what is contained in this issue.
- Anything you had had published since the last newsletter.
- Some helpful technology tips that will help your customers
- A special call to action
The newsletter will go out to your entire customer base and will serve as a valuable “touch” to those customers once again keeping your company’s name and services in front of the right people.
And yes, in the spirit of under promising and over delivering, there is one more “tile”,and that’s social media. Don’t groan! It’s about time you went there. Linkedin and Twitter are the most useful and powerful forms of business social media right now. Stop bragging about the fact that you don’t even know what Twitter is anymore, it’s no longer cool to do that and sorry but you’re showing your age. There are many books and seminars on social media today so it’s for you to get on board very quickly. My friend Bruce Johnston (email@example.com) is one of the world’s leaders in LinkedIn and he offers excellent training courses for you and your team to learn how to use LinkedIn effectively. The good news is that everything you do as part of your marketing plan can be re-purposed via social media reaching many more people and reaching them very quickly
One last thing to remember, and it’s worth restating, marketing is a mosaic and you should develop a complete annual schedule of the marketing you are going to be doing for the next year, month by month, quarter by quarter so that you will always know where you are going by following this time-lined road map. And by the way I have a great sample marketing plan I can send you if you contact me.
So please, start working at getting your name out there. You are competing with over one thousand other companies and in the end the true winners are going to be those who marketed the smartest and yes, the loudest. It’s only common sense.