Tools for EMS manufacturing quote pricing analysis - Optimize total landed cost savings for your contract electronics outsourcing programs

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Tools for EMS manufacturing quote pricing analysis - Optimize total landed cost savings for your contract electronics outsourcing programs

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Three truths about EMS marketing and sales functions

By Venture Outsource Staff

As a result of working with numerous OEM firms over the years we have also interacted with a variety of EMS providers and have come to realize some truths and trends about EMS industry-specific marketing and sales functions and the professionals with these roles and responsibilities.

An underlying issue with EMS sales effort is outreach. Getting ‘new’ customers. Part of the problem we see with ineffective EMS outreach aimed at identifying and winning ‘new’ OEM business is poor EMS sales and business development efforts. To a reasonable degree, we believe this is due to EMS marketing and sales people are not properly measured by the right metrics. EMS sales accountability and new business acquisition expectations are set too low.

What this means to EMS CEOs and owners

To help EMS CEOs focus their sales and business development teams on ‘new’ customer wins, EMS providers might consider implementing the following three metrics:

a.) Number of ‘new’ leads generated this month (excludes additional opportunities from existing customers)

b.) Number of ‘new’ leads in RFQ phase (actual, telephone or direct, in-person discussion (not just emailing back and forth) or “moving toward closing”

c.) Number of ‘new’ customer contract deals signed this month

So, instead of EMS sales and marketing staff submitting massive Excel files, Hubspot or Saleforce CRM printouts with little, to no, status changes for dozens, hundreds (1000s?) of cold leads going nowhere, the EMS corner office should guide EMS sales people to be more specific.

EMS CEOs might consider putting in place guide rails for sales people to help focus only on pre-qualified prospects, prospects converted to leads, and nurturing status of only those leads that sales is in actual discussions with – right now. This can help stop EMS sales departments from hiding behind the noise.

A new way forward

As EMS marketers and sales people become more effective, your teams will think twice before executing ineffective actions, and your staff will be less ineffective with busy OEM professionals. As for manufacturer reps (non-staff, repping multiple vendors), they have different motivations not always in the OEM’s best interest and can also be managed more effectively.

Average- and low-performing EMS staff marketers and staff sales people often hide behind the second metric listed above, prolonging discussions with leads and prospects, promising EMS leadership an RFQ is coming soon, and other delays, so they can keep their jobs.

 

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For some EMS leadership, there is considerable opportunity to counsel average- and low-sales performers unable to meet mutually agreed marketing and sales objectives. Those unable to meet expectations should be let go.

Why some EMS marketing and sales staff don’t perform

How did EMS industry get here? We share three EMS truths Venture Outsource is reminded of regularly when it comes to EMS marketing and sales people:

1.) Too few good EMS marketers: Most EMS marketers behave like sales people. EMS marketers are unable to quantify how marketing costs impact top line revenues, yet the marketing department holds tightly to ROI metrics. ROI is important but it is regressive thinking, serving mainly to justify next year’s marketing budget. The value of any prospect is equal to the amount of business a provider does with that converted lead, as a customer, over the life of the OEM-EMS business relationship.

2.) Little critical sense: Venture Outsource has interacted with a very high number of different EMS sales people over the years. We see lack of mandate alignments with EMS sales and marketers, when asked: ‘How can you quantify how EMS sales costs impact top line revenues?’ This is, perhaps, why many EMS sales people often focus the majority of their time trying to be the prospect’s friend rather than trying to comprehend the prospect’s business challenges.

Understanding intricate business challenges requires critical thinking and many sales people hired in EMS industry approach an exchange of ideas and discussion in a glib manner when a deeper approach is called for. EMS have historically sold on familiarity because they cannot lead a discussion on analysis to strategically position their firm’s EMS services strategically in the buyer’s mind. The vast majority of EMS providers we interact have difficulty explaining differentiation. More on EMS differentiation here.

From one EMS industry company CEO when asked: What do you see as [redacted company name] unique strengths and opportunities?“[Redacted] is a global EMS company that focuses on serving the high-reliability markets of aerospace & defense, medical, and tech industrials. We now have over 3,000 people in the USA, Canada, Mexico, and China. Our strengths are our people and a culture that relentlessly focuses on customer service and operational excellence. Our success is measured by our many longstanding and loyal customers.”

This CEO responded in a drive-by manner, applying little critical thinking. Other than geographies and number of employees, there is nothing ‘unique’ in the CEO’s response or claims. CEOs often speak to their company strength based on number of employees. What happens when EMS industry begins adopting real AI? It’s important to note the distinction between real AI vs machine learning.

We encourage the EMS executive sales mindset to transform from PR platform, and add real value in conversations with OEM decision makers tasked with making informed decisions.

In some ways, you can’t fault EMS marketers and sales people for their poor performance. You have to look at poor EMS leadership. There’s a saying about chain of commands concerning sound executive leadership: A-quality leader hire A-quality people around them. But, B-quality and C-quality people tend to surround themselves with others less qualified – perhaps because they feel threatened.Circling back on the glib-thinking theme, many EMS sales and sales types, when questioned about their industry knowledge, cite their number of years of experience in industry — as if this justifies a certain level of competence.

To combat these short comings in EMS industry sales, some EMS sales departments have realized lack of real sales competence and are replacing front-line sales types with women and men with operations and engineering backgrounds, who can listen as well as talk and, who can hold more meaningful discussions at the OEM’s level of concern. But even this is not enough if critical soft skills are not present.

Meanwhile, poor sales performers are hiding their low performance, especially in larger EMS firms where driving accountability can be more difficult. Whether intended, or due to lack of oversight, responsibilities for EMS sales persons today is more tied to account management activities with existing customers.

3.) EMS sales people don’t drive revenue growth: Most EMS provider individual company sales figures (and greater EMS industry sales figures) for top line revenues growth is driven by incumbent OEM customers handing off more business programs to the EMS sales contact they already know. The EMS sales role today is more closely aligned with program management.

This could  help explain why ‘new’ business sales-to-close ratios for the vast majority of EMS sales people are so low. Little selling is required by EMS sales people if the customer is already familiar with the EMS provider. However, this takes away motivation for EMS sales people to become better, to increase their knowledge, to hone their craft of conveying the value of complex services to busy OEM executives.

Content for EMS marketers and sales functions

As a service to the EMS side of the OEM-EMS business relationship, Venture Outsource has published a number of papers about EMS marketing and sales practices, vs best practices, based on our decades of experience interacting with many EMS marketing and sales departments and individuals. EMS industry sales and marketing departments can access this content by filling in the form on this page.

What this means for OEMs

EMS CEOs talk about wanting to go deeper into existing customer wallets. They recognize that OEM program onboarding costs tied to acquisition of additional business from existing customers are lower than admin and maintenance and training costs for CRM and marketing and quoting software used for identifying, attracting, prospecting, tracking/qualifying/de-qualifying, quoting, nurturing and wining and dining and travel costs associated with acquiring ‘new’ customer business.

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OEM professionals deserve EMS industry practitioners who are knowledgeable, timely in their outreach, and considerate of the OEM decision maker’s valuable time.

For OEMs reading this, Venture Outsource can help save you some time.

We have a long history of detailed information concerning new business cost of acquisition in EMS industry, average sales-to-close ratios and, average sales cycles for EMS providers, primary reasons why many OEMs leave EMS partners and/or why OEMs choose one EMS provider over another, internal EMS industry marketing and sales tools and practices, and more.

Start your EMS conversations at the top. We can provide you with a custom list of quality EMS providers matching your program requirements. We can also connect you directly with top-level (non-sales) decision makers at these EMS companies.

If you want information about identifying, vetting, selecting and contracting with potentially suitable EMS providers the following article is suggested, starting with your RFQ preparation and process. OEMs can also search for EMS and ODM suppliers in our global directory of EMS/ODM suppliers.

To help OEMs further, on some contract electronics provider company listing EMS directory search results pages, and on corresponding company listing pages for those companies identified, we display a small banner notice which reads: Venture Outsource Message

When clicking the small banner, the revealing message reads:

“Venture Outsource has been made aware of recent reports or events or actions concerning this provider which may not be reflected in reviews or information found on this listing. Accordingly, you may wish to perform additional research and due diligence for information about this provider when considering your options.”

This banner is based on first-hand experience Venture Outsource has with that provider and lets users know to dig a little deeper with your due diligence before making decisions.

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“Was able to very quickly find details on the important elements of setting up EMS and ODM partnerships, talked with an advisor for personalized info on quality providers matching our requirements while getting up to speed quickly about the industry and connect with key staff from like-minded companies and potential partners. Great resource.”

— Jeff Treuhaft, Sr. Vice President, Fusion-IO

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