Until recently, the machine industry was in a very comfortable position. Demand exceeded supply, goods sold well, and there were no unsold products in yards and warehouses.
Unfortunately, today, the large production-large sales relationship is a thing of the past. What’s more, manufacturing companies, wanting to make profits, are changing their approach to a customer-centered one. This is, of course, a positive phenomenon – although it certainly poses a challenge.
Recently, we hear a lot about recession, broken supply chains, crises, factory closures, and rising energy prices. Some of these problems are beyond our control, but there are concrete steps that can and should be taken to not only maintain the status quo but to prosper in challenging times.
Let’s take a look at the challenges that companies in the engineering sector face on a daily basis.
Knowledge retention after a salesperson leaves
In some companies, all knowledge of the customer relationship resides with one person – the sales rep assigned to a specific customer. If such an employee leaves the company, all knowledge, often accumulated over the years, is lost with them. The next representative must therefore rebuild the relationship and trust, and this can take a very long time.
The most extreme case is when an employee, collecting all the data in his notebook, left the organization, “taking away” key customers. Surely, in a digitized company, such a situation would never happen.
Lack of insight into the work of vendors in the machine industry
Company boards frequently lack insight into the work of their salespeople, which makes it impossible to assess their effectiveness and can result in financial losses or damaged customer relationships. Time-consuming status meetings with the sales reps are therefore necessary to figure out whether:
- the customer is satisfied with the cooperation,
- the product meets the customer’s expectations,
- there are no delays,
- nothing needs to be changed to improve cooperation, and
- how many meetings or conversations the rep had with the customer?
Limited knowledge of partners’ activities
Machinery companies work with many distributors and dealers – sometimes hundreds or even thousands in the case of the largest companies. In turn, the partners also sell products from competing companies. The more partners, the more information is collected. Ideally, it should be stored in one place.
If this is not the case, boards of directors do not have full insight into the activities of distributors and dealers – so how can they be sure that their products are properly displayed and sold as agreed?
Losses due to backlogged goods in warehouses and yards
In an era of difficult demand forecasting and outstripping supply, it’s hard to estimate production so that all the merchandise will sell. Yards and warehouses full of unsold machinery and goods are a daily occurrence, and the millions of euros depreciated in warehouses are a nightmare for machinery industry executives.
We have discussed the challenges, and now we will focus on solving them. It is almost certain that the advantage will be built by those companies that know more about the customer and improve the quality of service, especially in the context of falling demand.
An advantage in the machinery industry through CRM technology
Right now is the best time to invest in technology that will help you get through the crisis with a dry leg and streamline a number of processes in your company. You’re certainly using an ERP system, so we won’t focus on it, but we’ll tell you what you can gain from a customer relationship management system – CRM.
Such solutions are used in many organizations in various industries. It is no different in manufacturing companies, where they can be easily integrated with ERP-type systems.
With a CRM system, you can coordinate a range of activities, including sales and customer service. Moreover, the CRM system supports your salespeople by automating the following processes.
The process of managing potential customers (sales leads) who have expressed interest in your products or services in some way – such as filling out an application form or downloading materials from your website. Lead management involves collecting and analyzing data about potential customers and classifying them according to their readiness to purchase.
Customers have already made a purchase or used your services, and now you need to take care of communication and interaction with them. The primary goal of account management is to build lasting relationships with customers, which is expected to translate into customer loyalty in the long term.
In this case, the focus is on sales funnel management. The most important part of pipeline management is making potential customers move through the stages of the purchase path. Monitoring sales progress, classifying potential customers based on their stage in the sales funnel, and working to meet sales targets – this is also included in the term pipeline management.
Monitoring and reporting of results
The processes involved in collecting, analyzing, and presenting data on company performance. Applies to areas such as sales progress, costs, and all company key performance indicators.
Machine industry: understand the customer
Modern CRM technologies make it possible to better understand customer behavior and needs and thus personalize the offer for each customer. CRM tools also support production – both short-run and long-run.
Here are some advantages of this technology:
- Better planning: a good understanding of end-customer expectations enables more efficient production planning. Knowing the demand for your products, which is crucial in the current market situation, will help you avoid shortages and excesses;
- Optimizing production costs: using analytics and forecasting with your CRM system, you can automate production processes. This allows you to control costs and adjust them according to market changes;
- Higher product quality: various data are collected in the CRM, including customer feedback. Draw conclusions from them and make changes, and you will improve the quality of your products according to customer expectations.
Automate sales processes in the machine industry
Simple and repetitive processes should be automated. This frees up the capabilities of employees, who can use their typically human qualities, such as empathy, to maintain and build relationships with customers and finalize sales. So it’s worth considering getting the software to automate sales processes and order management.
The aforementioned tools automatically perform certain sales and order management activities, thanks to which these processes are significantly accelerated. The efficiency of the company’s operations is also increased, and as a result, customer satisfaction and financial performance improve. The tools that will enable you to automate processes are so-called cloud solutions.
Scalability of cloud solutions in the machine industry
At some point, every business needs to start scaling. It’s easier to do so with cloud computing, which frees companies from having to install software on-site and invest in IT infrastructure. The best systems run in the cloud, which ensures efficiency and security.
Cloud computing solutions allow you to scale your business, and all technical aspects are on the service provider’s side. So if your organization is planning to expand into new markets or is considering opening more sales channels, choosing business tools “in the cloud” will be the optimal solution.
Systems integration: more effective management of distribution channels
Against the backdrop of the growing popularity of “customer-centricity,” more and more companies are deciding to combine their ERP with a CRM system.
The vast majority of companies use several systems, and in machinery manufacturing, these include ERP tools, and increasingly, CRM. If you want to enjoy better coordination of sales activities and smooth channel interaction, consider integrating the systems used in your organization.
Integration involves combining several tools to enable the free transfer of data between them. When you integrate an ERP with a CRM, you gain quick insight into information about:
- supply chain,
- products and their prices,
- sales and production results and forecasts
- all interactions in the communication and sales channels used.
You can analyze all the above information from a dashboard in the CRM system. The data is enriched with information from the ERP in real-time. For the sales department – as well as marketing and customer service – this greatly simplifies and shortens repetitive tasks, especially if you have multichannel sales.
How does machine industry benefit from system integration?
Here are some tangible benefits that we have observed in our daily work with customers.
- The ability to instantly communicate with the customer in the event of a production stoppage, such as a component shortage;
- A view of work-in-progress and unreserved goods from within CRM: this allows goods to reach the customer faster than planned;
- situational awareness and excellent knowledge of customers and their needs enable efficient ad hoc operations – creating short production lines and working in bursts – which minimizes the risk of production downtime;
- with better communication and integration of ERP with CRM, it is possible to better estimate demand and keep less inventory (Make To Stock), and produce more on a specific customer order (Make To Order);
- the sales rep assumes the role of advisor, not just a person collecting orders from customers;
- full knowledge of distributors and dealers makes it possible to make better decisions on business terms for individual partners, depending on turnover;
- better sales service.
Curious about the topic of system integration? Find out more!
Review, optimization, and training
In order to increase efficiency, it is also worth remembering to regularly review and optimize your sales channel activities. What will you gain by doing so?
- You will find out whether a channel is working as it should;
- you will improve your sales processes;
- and adjust them to the needs of your customers;
- you will assess the availability of goods in each channel.
And don’t forget about regular staff training on how to handle specific distribution channels.
After all, each of them has its own specifics. Customers are sure to appreciate your team finding its way well across multiple sales and communication channels. This will translate into trust in your company.
Learn how to increase OEE with a CRM system!
Data analysis in multichannel sales in the machine industry
Analyzing sales data will enable you to understand customer preferences and buying behavior across different sales channels. Organizations collect and store data from multiple sources. Those companies that can interpret the information they collect can make better business decisions.
However, the data is often stored in different systems, making it difficult to draw valuable conclusions and discover relationships.
The solution to this problem is data analysis and visualization tools that seamlessly connect to, for example, a CRM system.
Above all, the aforementioned solutions allow “non-technical” people to draw conclusions from data, thanks to intuitive and clear dashboards. In the context of multichannel sales, data analysis allows you to better understand customer preferences and buying behavior, and to perform segmentation of target groups.
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