Mar 6, 2016

OEM SELLING


MANAGING OEM ACCOUNTS

There are most 3 important points for a professional sales people working within a missionary sales company.They are:

Focus first on maintaining your current business, then,

Develop new applications/projects at existing accounts, while you

Have a plan that defines this direction.

OEM accounts need OEM account plans. These plans are central to expanding your business within that account, although each one is specific to the account, they have

several common features, including...

Company profile and contacts.

Current applications.

Customer benefits.

Brief sales history

Distributor.

Distributor sales person.

The account plan must then define how to keep the business and how to grow the business over the next 12 months.

Not all OEM accounts are the same.
There are 3 account structures that require account management and therefore a plan.

1. Most companies design and manufacture at one location. These accounts require a plan if they are among the small group of accounts that give you 80% of your business.

2. Some accounts may have a design centre within your territory; however, one or more of the manufacturing locations are cited within your business unit but outside of your span of control. A plan must be established for these accounts should sales management support a coordinated effort.

3. A few accounts will have design centers within your territory but all manufacturing outside of your span of your control and that of your business unit. Account management and plans should be established for those accounts which have corporate blessings.

Success in category one accounts is easily measured and recognizable. There are, however, many accounts in category 2 and 3 where measurement and therefore compensation is divided between a design center and manufacturing responsibility. Senior management within the group or corporate management in the case of category 3 accounts must endorse the effort. Failure to address the Recognition/compensation issue will result in poor penetration of these usually larger accounts.HOW TO CREATE THE PLAN?...

If you already have the contacts…..

First off, you should document every existing application within the plant. Talk to the foreman, line engineer and product engineer.

Ask them why they use your product and it benefits them. Where possible, translate these process savings, warranty and component cost savings into rupees/dollars.

Add to this an estimate value of the gain in market share made possible by these lower costs or improved quality. Don’t worry if these figures are not exact. They will carry weight if you and the plant manager agree on them. And even if the agreement is only between you and your distributor engineer the figures still help. They will be the foundation of your customer value file.IF YOU DON'T HAVE THE CONTACTS…

In this case there are 3 ways of securing the information you need.. Through the plant manager, a profit improvement team or an OEM seminar.

Approaching the plant manager.

Write and tell the plant manager the following:

You want to make sure the plant is using the right products of you for the right applications.

You want to review his applications processes to ensure his applying or using your products in the most cost effective manner. New applications are being developed that might help him.

You want to ensure his equipment maintenance people have sufficient spare parts and know how to install them.

You would appreciate taking an hour of one of his people’s time. And you would prefer to do this on a specified date when you will be travelling with your manager of technical services, equipment servicer representative, technical service representative (or whoever you need to open the door.)

Most probably the discussion will take more than an hour. If so, spend only that hour and then set a date for another one or two, hour appointment. As you were already introduced by the plant manager then your new contact should be willing to help.

All the time you’re documenting these existing applications, gather other useful information as to: who is the foreman, the process engineer and the product engineer? Who championed the idea in the first place? What other opportunities present

themselves for future reference? All this information will assist your OEM account plan. PROFIT IMPROVEMENT TEAM:

Use a profit improvement team on your most important OEM accounts. It’s a more substantial tool and it should you get access to huge manufacturing locations or major multi-product companies.

Understanding these giants can be difficult why not therefore create an all embracing document which outlines all contact, opportunities and benefits at each location? Its aim is to calculate the savings that your applications would bring to existing processes.

Creating this profit improvement team requires team effort between you and the company. You must therefore sell the idea first to the president, general manager or the director of manufacturing responsible for the whole location.

This contact should have responsibility for profit and loss of that location, but not much more. If you want to run a profit improvement team at a particular engine plant, for instance, you do not need to contact the national president.

HOW TO MAKE A PROFIT IMPROVEMENT TEAM WORK:

Once you have selected your contact, tell him that based on your experience and your company's experience with similar plants you believe you can save this client X amt of dollars or rupees. This must be a reasonable but attractive figure. If you have a completed PIT in a similar industry, you can give him a contact to talk with for a second opinion on the value of a PIT. Never offer to give him a copy of the actual proposal. It is confidential.

Then request an hour’s meeting with him and with his key manufacturing and cost accounting people. You will introduce the profit improvement team concepts. You will outline the six or seven areas where you have expertise using applications or project case histories to clearly illustrate the cost saving opportunities. You objective is to gain their commitment to provide the necessary people and cost information so that you and your engineering and management team can develop an accurate picture of the potential savings.

As you can see one successful PIT should lead to another. Yet, best of all a successful PIT provides you and your customer with a recommended course of future cooperation that may last several years.

THE SEMINAR:
An OEM seminar can be the catalyst for getting your arms around an account. The objective of the seminar is to review the several areas of your company expertise with a group of manufacturing engineers or designers. Through application/projects case histories and demonstrations, the seminar must be so thought provoking that the audience suggests applications areas or asks questions or throw body languages indicates that have made a connection between your idea and a problem in a plant. These ideas must be noted for follow up, as the seminar progresses.

Once an application is flagged and you have a potential champion to work with, you have a start and understanding that account and managing it. In working on one idea ask where else your product is used and who is responsible for that part of the line. Ask your new contact for a tour of that line and an introduction to the line process engineer. Keep asking questions and building your file. Before long you have what you need to document existing business, you are working on one or two new applications as a result of the seminar and yes, during your tools you spotted several more opportunities.

SOME FURTHER POINTS ABOUT OEM ACCOUNTS:
Getting your arms around an OEM account is not hard to do once you have set your mind to it. Remember this is no gimmick that you are selling but a process consultancy at a very reasonable price.

Establish firm control over the MRO business at your account. Maintenance people are valuable sources of information about what’s going on at the plant. They understand manufacturing problems and they know who is in charge. Don’t turn your OEM’s over to a MRO specialist, especially not the key accounts.

Get to know the plant manager. Any reason will do. Good ones include a 5 min update on a project important to the plant. An annual review of your customer value file. Support for one of his employees who completed a new project of benefit to the company.

You must know the key players.

Use visits by top management of your company. These are best for establishing new contacts at high levels. For big potential OEM’s, ask for the company chairman, or president if necessary, to make the visit with you, plant managers like to talk to presidents.

Keep finding new applications. Especially new cost saving applications. As long as you keep saving the money, they will never switch their sourcing.

Maintain the business through more personal relationships. This is an area o be handled very carefully but it’s useful in situations where the OEM is reaching saturation in applications.

HANDLING MULTI LOCATION ACCOUNTS

Do you remember OEM account categories 2 and 3- those situations where you may be responsible for the design center but the plants are outside your territory? At these accounts your success depends on a strong team effort.

The first, vital step is to secure agreement from all the parties involved that the account is worth perusing. This agreement must establish how your contribution will be measured.

Compensation is often seen as a barrier to cross territory account management. It should not be. Sales account measurement is the greater problem and that problem stems less from logistics than ineffective cooperation.

The national and international account manager must manage/coordinate all of the business activities as if the account was within his span of control. All of the activities of documenting, maintaining and growing still must happen but many of the activities will be delegated to others. The account manager’s job becomes one of managing and coordination, rather than doing everything alone.

THE ACCOUNT MANAGER'S RESPONSIBILITIES INCLUDES:

Coordinate.

He must gather the account history from the field, including documentation of existing applications and their resulting benefits.

He must track service calls, seminars, training exercises, lab projects and anything else happening in the business which assists the customer.

He must liaise with product or engineering management on all applications resulting from process improvements coming from the plants and remove any road blocks that could potentially emerge.

He must establish new specifications for new product requirements emanating from the field.

He must gather all of the cost savings information from the plant or plants.

He must routinely report all of this information to his purchasing and management contacts.

MANAGING:

The account manager has the responsibility to specify your products on every conceivable application on new designs.

He must identify and coordinate the sales activity at any outside design suppliers and coordinate those activities.

He must identify all part suppliers, potential or approved applications by location, by salesmen. Marketing can be of great assistance here.

He must coordinate the quality control programs of the account with the company.

He must understand current warranty problems to offer service fixes and to identify long term decision projects.

He must manage the worldwide pricing philosophy of the account.

He must make sure that all of the products used in manufacturing are available to and through the field service organization.

He must understand the account’s new product needs and communicate those that fit our capabilities to the product development function.

Download or see a demo of a sample format of Customer Training Worksheet of a salesperson below:

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