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Three truths about EMS marketing and sales functions

By Mark Zetter

As a result of working with OEM decision makers over the years we have interacted with thousands of EMS providers and have also come to know some truths about EMS industry-specific marketing and sales functions and the professionals with these responsibilities.

The biggest issue with EMS sales is outreach. Getting ‘new’ customers. Part of the problem we see with ineffective EMS outreach to ‘new’ OEM prospects and poor EMS sales and business development efforts is EMS marketing and sales people are not measured by the right metrics. EMS sales accountability is 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, consider the following three metrics:

A. Number of ‘new’ leads generated this month (excludes 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 this month

C. Number of ‘new’ customer deals signed/closed 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, force EMS sales to be specific.

EMS CEOs should force sales people to 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. Stop sales 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 annoying to 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 should be managed differently.

Average and low-performing EMS staff marketers and staff sales people often hide behind metric B, prolonging discussions with leads and prospects, promising EMS leadership an RFQ is coming soon, and other excuses, so they can keep collecting monthly paychecks.

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EMS leadership should 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 EMS marketing and sales staff don’t perform

How did EMS industry get here? We share three EMS truths VentureOutsource.com 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 they hold tightly to ROI metrics. ROI is important but its 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 business relationship.
  2. Little critical sense: Most EMS sales people, in alignment with marketers, when asked, also cannot quantify how EMS sales costs impact top line revenues. This is why many EMS sales people focus most 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 in industry approach an exchange of ideas and discussion in a glib manner when a deeper approach is called for. They sell on familiarity because they cannot lead a discussion on analysis to strategically position their EMS firm’s services strategically in the buyer’s mind.

    To emphasize how glib thinking often comes from the top, 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 focus 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 simply responded in a drive-by manner, applying no critical thinking. There is nothing ‘unique’ in the CEO’s response or claims. Hundreds of other EMS providers can make similar claims. This is also one reason I stopped doing EMS CEO interviews once they began requesting questions in advance, to control the narrative, then wanting to cherry-pick questions followed by responding with canned answers, in email format, only. The EMS executive mindset has transformed into a PR platform, adding no real value for 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: 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.

    Some EMS providers 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 the 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 revenues growth is driven by incumbent OEM customers handing off more business/additional programs to the EMS sales contact they already know. The EMS sales role today is more closely aligned with program management. This explains 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 their 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.

What this means for OEMs

EMS CEOs talk about wanting to go deeper into existing customers’ wallets. They recognize onboarding costs for acquisition for additional business [from existing customers] are considerably lower than staffing and management overhead costs for EMS marketing and sales employees, plus admin/maintenance/training costs for CRM and marketing and quoting software used for identifying, attracting, prospecting, tracking/qualifying/de-qualifying, nurturing and wining and dining and travel costs associated with acquiring ‘new’ customers.

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