As manufacturers have navigated the difficult road past COVID-19 disruptions, one bright spot has been the significant government investments in the manufacturing sector. Between the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act, the US has approved nearly two trillion dollars over the next ten years to boost production—but if your company wants to see the benefits from this funding, it’ll be important to make sure your sales team is up to the task.
To understand why, let’s look at the scale and the speed of the transformation. The US Department of the Treasury recently published an analysis showing construction spending for manufacturing facilities having doubled since the end of 2021. Investment of this type points to a potential resurgence in American manufacturing compared to the past few decades. Companies which have experienced single-digit growth for many years have an opportunity to achieve double-digit growth by taking advantage of the increased investment. Few manufacturing sales teams have encountered a market like this before, and the transition from the difficult market of the last several years is sure to be a shock. Ultimately, your profitability depends on your ability to navigate this period. To get ready, many manufacturers can benefit from sales modernization.
Sales modernization is exactly what it sounds like: examining outdated processes and updating them to align with current best practices. Today, this means leveraging technology like modern analytics, AI, and enterprise software to measure and inform your sales techniques. To help you get started, we’ve outlined a few important places to modernize:
Identifying and targeting the right customers at the right time will be critical for any sales organization. To grow, you’ll need a smart customer acquisition strategy, allowing you to target customers that are in the market and looking to buy. Too many sales organizations rely on broad outreach to narrow down a large prospect list, wasting valuable staff time with customers who aren’t gettable. In a booming manufacturing market, buyers will be saturated with outreach from you and your competitors, making it more important that you take a more informed approach.
Modern analytics solutions help you arrive at a validated list of prospects without as much manual effort. Instead of pulling a list of all your potential buyers, you can use your data on your existing customers to build an ideal customer profile and apply look-a-like modeling techniques to identify prospects. This lets you start with a smaller, smarter list right from the beginning—which you can then further focus by using customer intent data. Modern solutions can use behavior cues to identify which prospects in your pipeline are ready to buy and which prospects are still testing the waters. While customer acquisition is sometimes overlooked, modernizing this system offers several ways to improve your overall productivity by focusing sales reps on customers more likely to buy. And in the coming manufacturing sales boom, you’ll need all the productivity you can get.
Speaking of productivity, it’s obvious that you’ll need people for your sales operation. But how many? In which roles? When should they be hired? People are invariably the largest expense for any sales force, making it imperative for organizations to plan their headcount needs to control costs. As your sales force scales, it becomes tougher to make these plans based on hunches, and erring on either side can hurt your profitability.
To plan effectively, organizations need to understand how their staffing intersects with the rest of their sales plan. Your headcount plan needs to consider how sales targets change over time, how technical specialists and support functions support the broader sales organization, how seller productivity fluctuates, and what patterns of attrition exist. Making headcount planning decisions with the help of data allows you to see productivity drivers and capacity constraints in more granular detail, allowing for smarter hiring.
Of course, hiring sales professionals is only half the battle. The other half is keeping them focused on selling—and not just on selling, but selling according to plan. This brings you to your incentive plan. You can assume your sellers will do what they’re incentivized to do, so it’s critical to have the right incentive plan in place to drive achievement. But beyond getting your incentive plan right, your sellers will also want to know where they stand, how they’re performing against their goals, and how much they can hypothetically earn when they hit the right benchmarks.
By modernizing your incentive compensation plans, you have the chance to build vital trust with your sellers. Modern solutions show sellers not only where they are against their goals but also how the numbers are calculated and what they can expect at each level of achievement. This kind of transparency and simplicity in the system gives salespeople confidence that performance is rewarded fairly. This means less time spent worrying about receiving credit, and more time spent talking to customers.
It’s important to note that modernization is a continuous process, not a state that can be achieved permanently. But as the last several years have showed us, the adaptable organizations will always have an advantage. Organizations that modernize now, while investments in the sector are starting to flow in, will be better prepared for the boom in the market that typically follows.
It’s also true that no two organizations will have the same path to modernization. What you need to modernize will depend as much on your business and your strategy as on the whims of the market. All organizations can benefit, however, by better understanding where they fall on the modernization spectrum and understanding the options at their disposal. This is a journey that Spaulding Ridge has helped numerous manufacturers through. If you’re curious about where your organization might be on that journey, and how to reach greater revenue and profitability, please get in touch.
