Setting and Tracking Sales Metrics

For a sales team to thrive, team members must go beyond managing leads—they must actively seek new business opportunities. Sales fundamentally is about "hunting," not just managing current business. Holding salespeople accountable for their outcomes is crucial to building a high-performance team. Similar to how manufacturers have metrics for operations, they should do the same with sales. Leadership, sales and marketing must work together to define key-performance indicators (KPIs) that align with meeting the company’s revenue goals. But you can’t just set KPI goals and forget them—they must regularly be tracked and reviewed. 

Additionally, companies should explore what it is they do best, identify their competitive niche and identify their most profitable customers. By better defining target markets and expectations, sales and marketing can work together to create a plan that will help meet the predetermined goals. 

Creative and Strategic Thinking

We’ve seen some sales teams become comfortable in their role and resist change. However, as with many roles, the job requirements and the tools used have changed. Sales professionals must take a creative approach and explore new opportunities to identify new business. Sales is challenging, regardless of marketplace conditions, so as durable-goods demand softens, selling becomes even more difficult.

To generate more leads, consider these approaches others working in manufacturing sales have found useful:

• Leverage LinkedIn and other social networks: Professional networking platforms are a goldmine for potential clients. Sales reps should use these platforms to connect, engage and stay informed about industry trends that can lead to new opportunities.
• Research and referrals: Encourage your sales team to seek out referrals from suppliers, partners, current clients and peers within the industry. A warm lead often proves easier to close than a cold one, and referrals can give your team a competitive edge.
• Attend industry events and webinars: Whether in-person or virtual, these events offer the chance to meet potential clients, learn about their needs and initiate relationships. Aim to attend the right events for your organization—those that will yield the best opportunities—and create a plan for working those events.
• Cold outreach with a personal touch: Cold calls and emails can be effective when done right. Sales reps should take the time to research the company, personalize their messages and add some content of value to show that they understand the prospect's pain points and aren’t blindly reaching out.
• Monitor competitor activity: Keep an eye on your competition’s movements. If they’ve just won a big account, see if similar companies in that industry could be interested in your solutions. This approach helps identify gaps where your company could add value.

Costing, Quoting and Opportunity

The Wipfli team has recently worked with numerous companies to explore options for costing and quoting, working primarily with two costing methodologies: cost-plus pricing and market-based pricing. Cost-plus pricing involves calculating the total costs of producing a product or service, including materials, labor and overhead, and adding a markup percentage to ensure profitability. This straightforward approach focuses on covering costs and securing a profit margin, but it may not fully consider what customers are willing to pay.

Market-based pricing centers around the perceived value of a product in the marketplace and considers competitor prices, customer demand and overall market conditions. This method aims to maximize profit by aligning price with customer expectations and the market environment, often allowing for more flexibility in pricing adjustments based on external factors. While cost-plus pricing focuses on internal cost structures, market-based pricing is driven by external market dynamics.

Many manufacturers do not look at pricing as an opportunity for improvement. The first step is to collect the data and see what it tells you. What does your hit rate data tell you? Are you profitable on your jobs? Do you time sales data to post-project reviews? Can you sell into open capacity?

In a difficult market it is important to explore every part of your business and determine how you can hunker down and improve your bottom line. Companies need to be realistic about their businesses and the marketplace. We feel strongly that durable-goods demand will improve and so will the manufacturing industry. However, we continue to stress the importance of utilizing data to identify gaps and opportunities for continuous improvement across your operations.

See also: Wipfli LLC

Technologies: Management

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