3. 1Introduction Issues with Complex Selling Organisations selling complex products face some veryCompanies selling complex products and services have specific issues, which may include:always had their own very specific challenges as well as • Sales channels struggling to understand the productsthe wider issues that all industry sectors have to face. well enough to sell them fully and effectively.The changing business, economic and technologylandscape has thrown these unique challenges into • Getting sales reps and channel partners up to speedsharp focus. on new and existing products is expensive and time- consuming.The global marketplace and the pervasiveness of theinternet have, perhaps inevitably, taken longer to impact • Sales spending too much time on “non-selling”the world of complex selling than other sectors. But activities such as quotation preparation, chasingeven companies in the most protected market spaces corporate resources, expediting and resolvingcan no longer ignore the changes brought about by problems with quotations and orders.these and other factors. • Preparing labor-intensive and time-consuming proposals and quotes.In this paper, we look more closely at the issues andopportunities that arise from these changes; in particular, • Heavy dependence on inside sales and other internalthe challenge of capturing and deploying the groups—“Chasing the Expert.”knowledge that the “extended enterprise” needs to sell • Diverting key internal resources from morecomplex products and services in today’s global strategic/high-value activities.economy. • Errors in quotations and orders. • The desire to grow sales through new channels, partnersComplex Products and the web.Complex products are largely, although not exclusively, • The need to assimilate product lines/sales teams fromfound in the high-tech and industrial product sectors. mergers and acquisitions. While there has been much activity in the developmentExamples of complex products include: and deployment of CRM (Customer Relationship• Network, communications and IT equipment Management) systems, the focus has almost exclusively been on the needs of companies selling standardised• Air and liquid movement systems products. The functionality has targeted areas of sales• Electrical power systems efficiency rather than effectiveness. CRM systems tend to look at the processes around the sale but do not• Motors, compressors and fans address the issues highlighted above.• Transportation equipment Although the fortunes and perceptions of the internet as• Industrial machinery a selling vehicle have fluctuated wildly, the fact remains that it offers an invaluable additional or supporting channel (and differentiator) for those companies that canComplex products are typically characterised by: address the specific challenges it poses for complex• High-end item value products.• Many features and options• Complex rules governing applicability and interoperability of options• A complex product structure and/or manufacturing process• A selling process that is heavily dependent on knowledge or expertise, frequently involving multiple “domain experts”• Being sold through direct and indirect sales channels
4. 2Business DriversCompanies have spent considerable time, money andresources implementing enterprise backbone (ERP)systems to improve the performance of their “backoffice” processes (finance, manufacturing, purchasing,etc.). Companies selling complex products and servicesmust now move their focus to the “front office”(customer sales and service). The need for this shift isdriven by several trends:• Cost containment – The economic changes flowing from the bursting of the dot-com bubble and the aftermath of 9/11 mean that few companies are insulated from the need to contain or cut costs.• Increased competition – Technological or manufacturing excellence no longer guarantees competitive advantage. Innovative, fast-moving competitors who are more responsive to customer needs are challenging market leaders.• Customised products and services – Increased competition means more choice and increasing customer demands. Customers are no longer willing to buy “standard” products when they can have “exactly what they want, when they want it, for a fair price” from someone else.• Broader product offerings – Most companies are responding to these demands by extending product ranges and offering more variation and options within their products and services. But increasing product variety and complexity puts heavy demands on a sales channel that is probably already struggling to keep up with existing product and service offerings.• Shorter product life cycles – While product offerings are growing, product life cycles are shortening—a “double whammy.” Traditional product ROI models are invalidated as companies are driven to embrace the principles of Mass Customisation1.• The internet – The internet makes it possible for customers to rapidly assimilate information about products and services that might meet their needs, to match them against their requirements and to obtain prices—without ever talking to a salesperson. While sellers of more complex items have been relatively immune from this pressure, the expectations of buyers are rapidly changing.• Knowledge – Customers are more knowledgeable Selling has and they expect knowledgeable selling. Yet few companies can afford to involve their “experts” in never been every sales cycle. so complex.1 Mass Customisation - The profitable delivery of customised productsand services at mass-production prices.
5. 3Responding to the ChallengeTo address the issues that we highlighted earlier and tokeep up with increased competition and customerdemands for personalisation of complex products andservices, many companies have adopted some obvious(but ultimately flawed and self-defeating) responses.Simplify Your Offering Sales AutomationOne business response to the information-management Numerous sales automation projects have beenand communication issues associated with complex targeted to improve “sales effectiveness.” In reality,products is to “dumb down” the product offering to however, a vast majority of these projects have focusedsome markets or channels. The supplier deliberately on making the sales channel “efficient” rather thanrestricts the product options available to lessen the “effective” and have frequently increased the non-information requirements. selling time required by the sales organisation.This may resolve some of the issues, but it is likely to lead A primary reason for this mismatch betweento lost or lower-value sales because of unavailable expectations and results is that most sales automationcompetitive product features or the inability to sell add-ons. software packages are first and foremost sales administration systems and do little to improve selling effectiveness.Adopt the “Push” Model In addition, most software packages are designed to accommodate a direct sales organisation model butAnother common “low-cost” response by suppliers is to cannot accommodate a complex sales channelissue secured information on CD-ROM. But, by consisting of both direct and indirect channels.definition, CDs can only be produced periodically andstock availability, product options and price changesoccur by the minute, not by the week, month or quarter. The Real SolutionA significant but often overlooked issue is that CDs area one-way street, allowing the supplier to pump The real key to successfully selling complex productsinformation into channels but offering no solution to the and services lies in addressing the underlying issue—therequired exchange of information backward and forward. need to capture knowledge from wherever it is held in the organisation and making it available to whomever needs it, whenever and wherever that is.
6. 4Changing Routes to MarketKnowledge—a Core Requirement Direct SalesToday’s buyers demand personal, knowledgeable and The traditional sales arm, the field sales force, hasresponsive selling. Addressing these requirements is become increasingly frustrated with the difficulties ofchallenging for any company, but much more so for selling a broadening range of complex, customisedcompanies selling more complex products and services. products and services in an increasingly competitiveTraditionally, these products have been sold by a direct environment with inadequate tools. Typical frustrationssales force, perhaps supported by closely tied dealers are:and often in protected market spaces. • Incomplete product, price and customer informationHowever, companies now need to reach their markets • Customers demanding more rapid, yet personalisedboth through direct channels, such as field sales and call responses, requiring frequent revisits to finalisecentres, as well as through indirect channels, such as customer need and product fitresellers, remote sales offices and even self-serviceinternet capabilities. Each of these “touch points” has • The need to “return to base” to complete customerspecific support requirements. The challenge is ensuring proposalsthat the channels work seamlessly together and can • “Chasing the expert” to determine missing details forcommunicate common knowledge rapidly. product specifications or quotationsInformation about products, pricing and customers may • High potential for order errorshave once remained static for long periods, but todaychanges constantly. More people need to understandthe latest picture immediately, yet the pressure is on to Increasingly complex products, pricing and financingreduce the resources and costs required to provide this result in the salesperson selling “familiar” products—notinformation. To compete effectively, companies must necessarily those best suited for the customer or mostbecome lean and agile in this area as in others. Shared profitable for the supplier.knowledge enables companies to implement rapid,coordinated action across the extended enterprise. To resolve these frustrations and to become more effective, the knowledge that is so often frustratinglyTraditional support methods fail rapidly in today’s locked away elsewhere in the organisation needs to becompetitive, faster moving, multi-channel, global made available to field salespeople. Solutions aremarket. A sales process relying on paper-based needed to help them close business (not just managecatalogues and frequent interaction with increasingly their contact lists). Salespeople need solutions that:pressured product, manufacturing or pricing experts willquickly fracture. • Are available at the point and time of sale—tools that can be used away from the office while face to face with the customerA major challenge is to ensure that all channels work • Provide up-to-date product, price, customer (andcooperatively, sharing and communicating knowledge other) informationin a timely manner. • Develop a complete and accurate product offering to meet a specific customer requirement • Have “point and click” synchronisation with central enterprise systems • Enable them to rapidly assimilate new or upgraded products, revised pricing or other changes • Deliver true benefit (not seen as a hindrance) Of course, field salespeople can become more efficient by using a traditional Sales Force Automation (SFA) solution. However, SFA does not create more effective salespeople. Surveys show that increased effectiveness is the highest priority sales managers seek from selling systems.
7. 5Telephone Sales and Support Indirect SalesThe typical call centre is not often used to sell complex A network of dealers, agents, resellers, distributors andproducts. On the other hand, there will be many remote sales offices enables effective, low-cost, rapidoccasions when information needs to be given or expansion into new and unfamiliar markets. However,received by phone. Some configured products such as the issues faced by the direct sales force are magnifiedPCs may use telephone sales and support quite for these indirect sales channels. Invariably separatedextensively. from the parent organisation by distance and frequently by time, indirect sales channels surely presentInternal sales and support people share many of the formidable communication and management challengesfrustrations of their colleagues in the field and need to any organisation. These challenges are much moresimilar solutions. However, there are some specific issues demanding when those remote partners handlein dealing with complex or customised products products that require considerable sales knowledge.satisfactorily via the telephone. While communicationmay be two-way, we must make allowance for the Customers selecting products over the internet facelimitations of a solely verbal interaction with the similar problems. Like a reseller, they will almost certainlycustomer where only the agent has the full benefit of have a good understanding of their needs and domaindetailed system information. Therefore, a support knowledge. But even more so than the reseller, they aresystem for telephone users must be: unlikely to have a deep knowledge of a particular vendor’s products. Some concerns are very specific to• Simple to use this arena:• Able to present even complex products clearly • Protracted sales cycles because of the need to consult• Completely foolproof in taking 100 percent correct the vendor over many areas of detail. orders, every time • Security and geographic concerns can make it very• Able to promote up-selling and cross-selling difficult to distribute information and keep it current. opportunities • Because of product complexity, agents may choose or• Closely integrated with fulfillment and other may only be allowed, to sell a limited range of downstream systems products. For instance, companies may simplify their products through dealers to make them easier to sell. But as we noted earlier, this process almost invariably damages competitiveness and profitability. • Lacking the most current information, reseller quotations may be error-prone. • Dealer training is difficult and costly. • Generating forecasts for indirect business is notoriously difficult. A solution addressing these issues needs to: • Cover agents and remote sales offices as well as customers. • Help agents sell a particular company’s products in Companies selling preference to those of competitors. complex products • Deliver current product price and customer and services must now information that is always available. move their focus to • Help develop and close business by providing tools the “front office”— for lead management, quotation and forecasting. customer sales • Operate in multiple languages, currencies and and service. cultures. Communication is vital in any supplier/buyer relationship, even more so in supplier/indirect-channel relationships with complex products. Information exchanged between supplier and dealer must be two- way and above all, current if the relationship is to realise its full potential for both parties.
8. 6A New Channel ModelCompanies must develop a new model to optimise The Internetinformation flowing between suppliers and their indirectchannels. It must be: Clearly the World Wide Web provides the foundation to implement this new form of channel support. Internet• Cost-effective and easy to use support of indirect sales channels or direct to consumers has evolved through three generations.• Accurate and consistent• Secure and two-way• Immediately accessible and always available Generation 1 – Static Web Publishing Most companies have taken steps to publish informationThree technologies have matured and converged to on a website and make it available on a 24-hour basis toresolve these issues: their prospects, customers and indirect channels. This information is typically “static” with periodic updates• The internet and may consist of marketing information, technical• Knowledge-based Configurators product information and perhaps secured pricing information.• Enterprise Relationship Management systems This “First Generation” web approach is primarily one- way communication where the supplier publishes information, but interactive sales transactions are not supported. Generation 2 – Selling Simple Products The growth of e-commerce, electronically selling over the internet, has been well documented with highly publicised “success” stories for companies such as Amazon. However, most high-profile e-commerce websites actually operate in the business-to-consumer market where the products themselves are relatively simple (books, clothes, CDs, etc.) and of low transaction value. Powerful search engines accessing product catalogues and links to credit card payment systems are characteristic of these sites. Transactions can be secured and encrypted as necessary. But there are few, if any, options associated with the selection and ordering of these consumer products and they could not be described as anything other than extremely simple in their technical specifications and pricing. The cost-effectiveness of internet selling cannot be disputed although its appropriateness for anything beyond selling simple products may seem open to question.
9. 7Generation 3 Is Defined by Complex ConfiguratorsSelling The latest generation of configurators based on ExpertThe “Holy Grail” of electronic commerce—the ability to System technology is having a real impact in sellingsell complex products with multiple variations through complex products. A good configurator packagethe web. captures the rules associated with product offerings and intelligently guides customers, dealers or salespeopleInformation flow needs to be bidirectional with links to through a selection process without the need forfulfillment systems in the supplier’s back office. Dealers supplier intervention.or customers need to identify themselves through log-inprocedures and information is securely transmitted. Beyond product selection, the configurator must manage the business rules associated with pricing,This is the real requirement for industrial products in the customer terms and service requirements as well asbusiness-to-business environment, sold directly or being able to generate personalised documentation forthrough dealers, resellers and agents. prospects, dealers and internal needs. Finally the configurator must translate the product into the formatIn this environment, the many rules associated with needed by the “downstream” users within the sellingspecifying and pricing a complex product must be made company itself.available through the internet. But how, whenconventional catalogues or conventional programming In effect, the configurator captures and deploys thelanguages cannot capture and convey that knowledge? knowledge that humans bring to bear in a sales dialogue, acting as an intelligent agent in productThe answer lies in a knowledge-based tool called a selection, pricing and technical specifications.configurator. If configurators are going to be useful, they must allow rules to be captured and published very easily (otherwise the rules will change before they are issued) and rule maintenance must be simple and quick. The ability for the configurator to be deployed across the internet is a must if up-to-date information is to be made available to the entire direct and indirect sales channel network at the “touch of a button.” Configurators present the product options available in terms understood and relevant to the buyer. The configurator will prevent the buyer from selecting invalid product combinations and will translate the buyer requirements into a technical specification for the supplier to fulfill. It is important that the outputs from the configurator satisfy the needs of both buyer and supplier. The buyer needs a quotation or proposal for a correctly specified and priced product. The supplier needs a specification that will allow the complete and accurate generation of sales and manufacturing orders within “back-office” fulfillment systems if the quotation is released as a firm order. The customer requirements and resultant product configuration need to be stored on the supplier’s database to allow retrieval and amendment by the dealer or customer if the requirements change. This database also gives tremendous visibility of the pipeline for forecasting purposes. Once the configuration rules are captured and deployed throughout the sales network, the need for order validation by the supplier is eliminated since the configurator will ensure that only valid configurations and specifications are generated at the point of sale. One hundred percent correct orders, one hundred percent of the time right across your sales and distribution network.
10. 8Opportunity or Threat?The internet by its nature is a global marketplace and isincreasingly viewed as the major enabler in allowingboth central control of information and potentiallyunlimited low-cost access through browsers. Visionarycompanies are leveraging the internet as the means tomake new sales channels effective quickly, significantlyreducing training and information transfer coststhroughout their sales network.The Gartner Group and other industry analysts considertechnology-enabled selling to be the single, highest-impact investment companies can make in sales andmarketing technology. Shared customer and marketknowledge throughout the whole enterprise, along withoptimal resource allocation, are key factors to survivingtough global competition. Automating these areaspromises a huge return on investment by delivering acompetitive edge whenever you interact with customersand prospects.
11. 9The Bottom LineSelling complex products and services has alwayspresented special challenges. These have beenmagnified by marketplace, distribution channel,technology and customer expectation changes. To retaina position of leadership, organisations need tounderstand the specific threats and opportunities fortheir products and markets and develop approachesthat will allow them to become more efficient, morereactive and more effective. Software applications arenow available that address the very specific issues ofselling complex products and services and enable thesenew approaches to be implemented.The implementation of these applications is acceleratingrapidly and a significant and growing number ofcompanies have now delivered dramatic, quantifiedimprovements in key sales-performance measures. Usershave impacted performance, cost and time across theboard reporting increases in sales revenue, reduction intime-to-quote, reduction in quotation and configurationerrors and cost reductions in developing quotes andproposals.About CincomCincom and its partners deliver and support innovative Software applications aresoftware and services to simplify complex business now available that addressprocesses. Cincom Acquire® simplifies complex sellingby delivering critical product, pricing and process the very specific issues ofknowledge to the point of sale. For 40 years, Cincom selling complex productshas empowered thousands of clients worldwide to and services and enabletransform their businesses and outperform thecompetition by providing ways to increase revenue, these new approachescontrol cost, minimise risk and achieve rapid ROI. to be implemented.Cincom serves clients on six continents includingAmerican Power Conversion, Air Products, BMW,Boeing, Ericsson, Rolls-Royce, Rockwell Automation andSiemens.For more information and additional resources, contactCincom by phone or e-mail at one of the regional officesquoted on the last page of this document. You can alsovisit the companys website athttp://acquire.cincom.com.