DiscoverBusiness & Economics

Industrial Sales



Readers will discover how you to sell better to giant industrial companies. Reviewers of this book have the chance to learn valuable sales lessons as well.

Industrial Sales enforces your selling system. Within a few steps, you will create a more effective commercial process, which will bring more sales with the same effort. Industrial Sales will help boost your sales independent on what area of the world or the type of industrial sector.

Everyone involved in oil, gas, petrochemical, renewables, marine, mining and chemical industries should read Industrial Sales!!

Bram van Oirschot traveled the world to sell technically complex services over the last two decades and came across the same challenges over and over again. The things that make industrial sales unique make the job of a salesperson fun but challenging. In Industrial Sales, he tells you all about selling to industrial clients. He shares the key actions to take in every industrial sales cycle and how to adjust your selling system to win better deals with the same effort.

The commercial process

Brian never expected his career path to take a commercial turn, but he is enjoying the excitement of being involved in many more projects. However, after a year in the role, he has become overwhelmed by nervousness. The revenue growth achieved by his sales team has been stagnating. This feeling is reinforced by the ever-increasing expectations from company management. He has decided that adding more members to the team will not solve his challenge.

At this stage, Brian is coming to realize that he has no idea what keeps his team busy. They should be focusing on battles they can win. The individuals in the team all have their unique strengths and weaknesses, but they seem unwilling to support each other and only ever follow up the low hanging fruit. Brian feels he needs to start measuring all input, as well as the output (revenue). He doesn’t know where to start but decides to create an improvement program. He understands this might be an intense period, but feels he is responsible for improving the performance of the team. So first he will assess the commercial process and then divide it in smaller steps. Finally, he will act on the different steps in the process. He decides to give himself and his team two years for improvement, after which he will make room for his successor.

2.1       Keep the sales wheel turning – the process

The starting point for setting up your sales team is an assessment of your commercial process. Identifying the responsibilities of your sales team may seem a straightforward task, but once you start by compiling a list, you will start to see points which can be discussed. The division of responsibilities is influenced by many factors, as the following example demonstrates:

·      The sales director believes the evaluation of contractual terms is the responsibility of the project manager, since she is the one who needs to work with the contract.

·      On the other hand, the project manager believes it should be part of the commercial process, because the terms should be negotiated before closing the deal.

·      The finance manager has always performed a check on every contract, so sees themselves as the owner of this activity.

·      The managing director believes the evaluation of contracts is a profession on its own and would like to outsource it.

·      One of the salespeople aims to grow into a contract management role and so would also like to play a vital role in the process.

Discussion of such conflicts should always be held at management level since you are defining the roles and responsibilities within the organization. It should be clear what everyone’s responsibilities are, what they can expect from their colleagues and how the roles interact.

Every part of the process starts with a defined objective and ends with achieving that objective. In the commercial process, the input is the activities performed by the commercial team (marketing and sales) and the output is the sales results. In most business environments, the commercial process is measured in turnover or another accounting unit. In short, effort is put into finding business and turnover is the result of the process. However, much of the turnover might be realized outside the sales team, e.g. project managers securing additional work. These side processes contribute to realizing the overall business objective and can be influenced by your sales team.

Figure 2.1 shows the commercial process, which is the responsibility of or can be influenced by the sales team.

Figure 2.1 Commercial Process

2.2       Responsibilities of your sales team

Create a list of all the activities required for achieving your commercial objectives. You can list these in the order in which they need to happen, or you can divide the sales process into sub-processes. At this stage, focus on the primary process from lead generation to relationship management.

The primary activities in your list form the operational process. As a sales director, you will also be tasked with the management process and you should list all the supporting processes as well. Add all non-primary activities to your list and mark them in a different column.

Table 2.1 Example activity overview

Table 2.1 can be used to allocate resources, prepare job profiles, assemble the sales team, perform gap analysis and much more. So, the time taken to prepare the list will be time well spent.

2.3       Choose your methods - commercial strategy

This paragraph will lead you through some of the steps to achieve a clear sales strategy.

Brian, our struggling sales director, has asked everyone in his team about their sales process. He got different answers from all of them. Some start with receiving an inquiry in their mailbox, others wait for a recommendation, while one person tells Brian they never need to look for an opportunity, because their current clients provide enough turnover. Brian is puzzled. How can he improve the system, when there doesn’t seem to be a standard sales process?

2.4       When does the sales process start?

Considering the difference between marketing and sales is a useful starting point, and one that can affect your sales team on multiple levels. For example, you might not want your account manager to be working on content for your website or your communication officer performing cold calls.

In short, is the input to your sales process the identification of a target group or is it a pre-qualified lead?

Figure 2.2 When does sales start?

2.5       When does the sales process end?

Sales ends when the predefined sales objective is met. Setting these objectives is part of strategic business modelling. The sales process does not need to end with closing a deal. Bringing the sales milestone forward in the business process might be effective for reaching your ultimate business goals. In highly specialized markets, and those in which multi-billion contracts are signed, the handover from sales to the rest of the organization (and / or to account management) might come earlier in the process. On the other hand, in less complex sales environments the sales process might end after delivery of the goods. In those markets, standard catalogues are available, so the sales department can enter the order, and the quote is prepared and submitted automatically.

Figure 2.3 When does sales end?

When is the opportunity or project handed over to the rest of the organization? Companies that like well-defined scopes of work will want to involve the operational part of the organization early in the sales process. The two examples below display the difference:

1.      An engineering firm has been asked to provide a chemical process plant on an EPC (Engineering, Procurement and Construction) contract. They have systems in place that can efficiently turn the specified raw material (e.g. crude oil) into the required plant output (e.g. fertilizer). The engineering firm must involve the product specialist in the sales process. The engineering firm’s sales team has a supporting role in this sales process. In contrary. most of the engineering firm’s suppliers have a different sales strategy. They offer a specialist piece of equipment, which their sales team can specify and present. At those suppliers, the sales process ends after the contract has been negotiated.

2.      The second example is a software provider, where the sales process might never end. This industry relies on periodic subscriptions, and the continuation of the subscription is the main priority of the project manager. When the software firm distinguishes between sales and account management, the sales process might end at the first contract, or when the target company has realized the required volume. The account manager will then take over to ensure the relationship thrives and that business continues.

2.5.1       Choices to be made - strategy variables

When you have identified the input and output of your sales team, you can focus on the primary process. This should identify the most efficient way to reach the sales objectives.

At what stage are we adding value?

You will need to find out which of your business processes is making you money and at what stage you add value for your client. Identifying these two parameters will provide you with a lot of insight to shape your operational strategy. In most business processes, you will add value at least twice. In general, the revenue stream will start after the first moment you added value and will flow around the other moment(s) during which you add value. 

Figure 2.4 'added value' vs. revenue

Just before the lines in Figure 2.4 first cross, the contract is awarded to your company. Before that time, you have been adding value for your client by offering your product or services. The revenue stream starts flowing after contract award and will decrease after completion of the contract requirements. At a later stage, you will often find service or aftersales opportunities.

However, many companies have a multitude of revenue opportunities. They have aligned their processes to meet the moments of adding value. Revenue cycles are repetitive for each client and they create value for their clients at many points. In this case you have the option of either directing your sales attention to the beginning of the relationship with the client or letting your sales representative be at the side of the client throughout their relationship with your company.

In the software company example, having the sales team involved through the whole process helps grow trust in your company as a service provider. The client doesn’t want a company where the salesperson gets the contract signed and leaves. They want to believe that the company they are purchasing from is as vested in the final product as the salesperson.

Figure 2.5 Sales involvement by type of business

When to start fulfillment

Fulfillment describes the process used to present the solution to the client’s requirement. In traditional business processes, fulfillment will be completed before most of the work is carried out and even before contract award. In the case of product supply, the fulfillment stage is always finished before the contract award. In the end, the client needs to know that the product or service being purchased will solve their challenge. In the case of more complex system supply or services, the fulfillment stage should be postponed until after the contract award; you don’t want to give away all your knowledge before the contract is signed.

The exception is for engineered solutions, which don’t specify the package to be delivered, only the desired outcome. In that case, fulfillment takes place during the completion of the works. For these kinds of businesses, the revenue stream will be spread evenly throughout the client’s journey. The client should be looked after well throughout the journey. You need them to retain confidence in your company, since the quality of the service is not specified in detail.

Why is the question about the starting point of fulfilment relevant during strategy formulation? The reason is simple. For the right kind of fulfilment, you will need expert knowledge. If you want to perform the fulfilment before the contract is awarded, you will need to have the required resources in place. If fulfilment is part of the contract, you will need to focus on trust during the sales process. The table 3 can help you to direct your focus during the different commercial stages. For example, when to start to discuss costs; when to focus on facts, or when you should have an established relationship. If you try to fill in the table, you will be forced to think what the best focus point is at each stage. You can add as many focus areas as you want but stick to the focus areas that have a direct impact on the success ratio.

Table 2.2 Focus areas during different phases

Development path

The development path of your company should influence sales strategy. Most company missions focus on one of three objectives: continuity (or survival), growth or profit. The reason for the chosen objective is not relevant for developing the sales strategy, but the type of objective is. Companies in survival mode don’t need to put major efforts into the acquisition of new business as they will primarily focus on relationships with existing clients. There is some focus on replacing expiring relationships, which needs account managers to keep developing their network, but it does not require aggressive sales techniques.

Most companies have an objective to grow, either in terms of size or in turnover. When it comes to the sales strategy, the basis of growth is irrelevant. In general, growth requires more sales. Growth can be achieved by increasing the number of orders or the average order value. To increase the number of sales orders, the sales department’s emphasis will be on the beginning of the sales process. To increase the value per order, more effort is put into the stages further along the sales cycle.

Figure 5 shows the difference between the two growth objectives in relation to the different commercial stages. When your intention is to grow the number of orders you invest in marketing and lead generation (top funnel activities). Shifting your attention towards opportunity management and relationship management provides a basis for growth by increasing the average order value.

Figure 2.6 On what stage to focus for achieving growth?

2.5.2       Sales outcome

In the paragraph “When does sales end?”, we saw how the outcome defines the scope of the sales department. A similar exercise is required for developing the sales strategy. As a starting point, this simplified value chain can be used. Typically, marketing and sales is displayed in the beginning of the value chain. However, you can argue that it has a clear handover to Project & Operations or that it continues throughout the value chain.

Figure 2.7 Simplified value chain

Your sales department might be required to provide a certain outcome, which will influence the sales strategy. Some examples of sales output are listed below:

·      tender opportunities

·      signed sales contracts

·      signed sales contracts and sub-vendor selection

·      sub-assembly lists of ordered equipment

·      signed contracts and project / procurement support

·      contract management

·      complete process management until delivery

Each business model has its own characteristics. The type of business has a strong influence on the required sales outcome. A highly specialized technical firm might employ a salesperson who is only required to bring in opportunities. Others will need the sales team to provide more input for the operational phase. A supplier of IT equipment will have a sales team providing lists of ordered equipment. A project organization requires sales involvement during the execution of a project, in the form of contract management.

2.5.3       Level of client involvement

Your client will be involved in your sales and business process because they are the reason your company exists! Clients become increasingly aware of their own needs and requirements, and for some business processes, which impact their output significantly, your client wants to get involved. The term co-creation has been introduced to give the end user an active role in realizing the product or service. Co-creation is not new; all companies lean on the involvement of their clients. The level of involvement required to reach the desired output can differ, however. A salesperson might be required to act as a guide for the client to create value for the company. In other businesses, clients can choose from a well-developed set of services and products. These products and services meet most of the client’s requirements at the price they are willing to pay. In such businesses, sales will have a strong focus on transferring information. For both types of business, you will have to adjust your sales strategy, depending on the type of your business.

2.6       Sales strategy formulation

The formulation of a strategy will provide guidance to the team and it must include the strategic objectives. These will be broken down into operational objectives with an underlying set of supporting objectives.

Figure 2.8 Sales strategies and objectives

The operational objectives lend structure to the primary process. The supporting objectives will act as input for the supporting processes. For example, increasing the number of contracts is an operational objective which can help to realize the strategic growth objective. Making the proposal preparation an efficient process is an example of a supporting objective which can help to achieve the operational objective. Objectives are formulated in a way they can be measured. This is not a prerequisite for strategy formulation but for good teamworking reasons; measurability is required to avoid disagreements.

2.6.1       Key aspects of a sales strategy

The sales strategy will be aligned with the corporate strategy and will influence the input to the sales process. It will also define the output and give some overall guidelines on how to complete the process effectively. Furthermore, the sales strategy must focus on the continuous improvement of the sales process.

Influence input

The input to the sales process is generated by marketing activities, so the sales strategy should define what is required to initiate the sales process. These sample extracts from sales objectives, include defined inputs:

“The sales team will perform all required activities to transfer qualified leads into…”

“The sales team will actively search for tenders, which it will…”

In these examples, the qualified leads and the tenders act as input into the sales process and guidance on how the sales team influence the input is provided. For each type of input different activities can be initiated to influence the sales strategy.

Table 2.3 Influence sales process input (examples)

The list in Table 2.3 is not intended to be complete; the sales input will depend on your specific business. When formulating the sales strategy, make sure you include the sales input. Defining the input will provide useful information for the rest of the organization. You will be able to assign roles and responsibilities to other departments within your company.

Desired output

The desired output is described in paragraph “Sales outcome”. In the sales strategy formulation, the output will be further defined. The corporate vision will be translated into the desired output for the sales process.

Table 2.4 Sales output details (examples)

The output of the sales process should align with the desired input for the next stage in your business process, so it should be discussed (and negotiated) with the operations or project teams. Inefficiencies in the value chain are often the direct result of misaligned output and input in the steps in the value chain. Any gap between the parties within the value chain will cause time delay and resource spillage, so tailor them to your specific business.

Process definition

Most sales strategies include on the human capital required to complete the process, so systems and procedures should already be in place to support that. The sales strategy should help to define how the different resources will be deployed to efficiently achieve the required outcome. The sales strategy will thus focus on those aspects that can be influenced by people, such as who can be deployed to reach goals and to optimize systems and procedures.

In the examples below, the process definition is underlined:

… qualified leads (input) will be converted into prospects (output) by the sales team with a strong focus on the client’s personal objectives …

… opportunities presented by the online application form (input) will be translated into client-specific proposals (output) without personal contact between the sales team and the client …

… lists of target accounts (input) will be explored to retrieve potential clients (output) by actively contacting individual contacts …

… our clients’ competitors (input) will be tracked, contacted and converted into prospects (output) by our sales team …

… social media (input) will be used to find potential leads and understand their behavior to be able to customize the service we will offer to them (output) proactively …

Stick to your process

People, and especially salespeople, want to know why they are being asked to follow standardized strategies. So, the sales strategy definition needs to indicate the reason why they should follow it. The success rate of sales will depend on the motivation of the individual members of the sales team, so they need to understand why certain actions are required of them. The sales strategy should clearly relate to the corporate strategy and make a connection to the next steps in the value chain.

Some examples:

·      to meet corporate objectives X, Y and Z

·      to contribute to the company image in a positive way, in line with corporate objective A

·      to use resources effectively to bring value to our clients

·      to limit the need for the project manager to adjust the handover from sales to projects smooth

·      to optimize the production planning by aligning the client’s demands with production line capacity

2.7       Set your goals - sales objectives

John is the most senior member of the sales team. During his annual job appraisal, he requests a pay rise, on the basis that he has met his targets. Brian asks to which objective he is referring. John has divided the company turnover target by the number of sales team members and is thus claiming that “his” clients brought in his quota. Brian doesn’t approve of this seemingly narrow-minded approach but isn’t sure how to oppose this argument: this is the kind of problem that can arise if you don’t have clearly defined sales objectives.

Sales objectives can be drafted after you have defined the sales strategy. At this point, the output can be measured. Only objectives that can be influenced by the sales team are relevant. Including objectives which depend on external variables is unnecessary and won’t add value to the sales process.

As mentioned before, there is a difference between operational objectives and supporting objectives. Operational objectives typically cover the output which is required to meet the corporate objectives. Supporting objectives are formulated to improve the internal processes which make the operational objectives more realistic. Operational objectives guide the commercial front runners, the people who are directly in contact with clients. The supporting objectives will then guide the back-office staff.

When setting sales objectives, the structure of your sales department will become apparent. The sales cycle might be divided into smaller scopes. There might for instance be a need to define intermediate sales objectives, focusing on an output, which becomes the input to another sales sub-process. You might define a sales objective such as “20% more leads need to be qualified by the lead generation process in comparison to last year”. The qualified leads will be input for the next step in the sales process, which might be to find 25 new opportunities for a given year. When aligning objectives, you will be able to see gaps in your process which allows roles and responsibilities to be divided accordingly. The intermediate objectives can be the responsibility of one person or can be carried out by several team members. The combination of sales objectives and how they are linked to primary processes will provide clarity on how the sales strategy should look in everyday business, and how accountability should be divided between members of the team.

Three operational objectives are defined:

·      generating leads

·      lead to prospect conversion

·      closing

Each sales member has one unique competency and takes ownership of one of the three operational objectives. When one of the objectives is falling behind, the manager of the sales team can decide to assign additional resources or to adjust the supporting objectives, so the numbers for this operational objective improve. It is thus easier to monitor the pipeline and to plan the sales efforts.

2.8       What is required - resources

Figure 2.9 Commercial resources

The commercial process is impacted by what resources are available, which will influence the commercial process and the success of the sales team. Resources are divided into human capital, tools, external resources and internal resources. The sales system should combine all available resources to maximize benefit. Coordination of sales resources is very important to ensure continuous availability and alignment within the sales team.

2.8.1       Human capital

The sales team is made up of several types of sales professionals. Ideally, all the skills you need will be available within the team. Some people are more comfortable establishing first contact while others are better at maintaining an ongoing relationship with existing clients. Besides these skills, many others might be required in the sales team but that will depend on the scope of the department, and on the sales strategy and objectives.

The minimum skills within the sales team should cover the pre-determined scope of activities. The start and the end of the sales process are often particular bottlenecks. For example, lead generation is an activity that is often underestimated. You need to discuss whether it is the responsibility of marketing or the sales team. This can be a controversial area, because lead generation is often seen as an unpleasant chore, as with contract evaluation. The responsibility for this is often shifted to the projects or operations department. Operations tend to see it as final last part of the sales process, so they tend to believe the sales team should cover it, however evaluating contracts is a skill that isn’t always available within that team.

By acknowledging the sales team’s requirements, any gaps can be identified. The manager of the sales team might decide to take one of the following steps:

·      hire new staff

·      train existing salespeople in specific tasks

·      lobby within the company to find the resources and make them available

·      outsource the activity

In the next sections of this book, human capital will be discussed in more detail. The sales process relies on human capital, although the supporting tools can also make a big contribution.

2.8.2       Tools

We are increasingly dependent on tools in the sales process. Hardware tools (such as the phone, laptop, projector, etc.) are regarded as a minimum requirement. To complement these, software tools facilitate many aspects of the sales process, such as reporting and client contact. The value of the software depends on the input of the sales team, as it should support the sales team and the overall process. The sales strategy dictates how much of that process can be automated.

Customer relationship management (CRM) systems support the sales team, by making it easier to track leads, prospects and opportunities. They do this by logging the activities of clients or opportunities. The system makes it possible for several team members to work on one client or opportunity simultaneously, as individual tasks can be apportioned between them. Besides this, reporting capabilities can be used to manage the sales team and to keep management informed, as well as analyzing trends and forecasting sales.

Management should encourage the use of the CRM system because it can help to maximize sales output growth. They can do this by incentivizing it, for example by making it part of the appraisal scheme and reward system.

The CRM system should be adjusted to the sales process you have identified, with the first input into the CRM system matching the input of your sales process. The output of your sales process should be implemented in the CRM system as well. You can choose the output to be a won opportunity or you can keep the project open and define that different quotes in one project are the output.

More and more websites have a feature that allows a prospect to show interest in a product or service. Many companies have included an ordering option online, for example. The sales strategy will define the extent to which the website can be used for ordering or showing interest. In B2B environments, human contact during the sales process is still regarded as best practice. Nevertheless, the trend for encouraging ordering and information gathering online during the sales process is now generally accepted. In fact, most of the buying process is already complete before the client is in contact with your sales team. The importance of online information should not be underestimated and is likely to keep increasing.

2.8.3       External resources

Sales strategies may require some aspects of the sales team to be outsourced. Whether to outsource is subject to the same considerations as outsourcing any other part of your product or service:

·      extent of company-specific knowledge required to complete a task

·      importance of quality of output for the rest of the sales process and/or value chain

·      available resources within the sales team

·      availability of the skills needed to manage external resources within the sales team

·      costs of outsourcing

·      available lead time for the specific activity

·      Intellectual Property (IP) exposure to outsourcing firm

After the decision to outsource has been made, the right external resource can be selected. The marketplace includes sales agencies, freelance professionals, legal advisors and many other types of supporting companies. The contract with the subcontractor can be based on performance (output), long-term frame agreement or on a reimbursable basis. The choice of contract depends on the activity you want to outsource and the level of trust between the company and the subcontractor.

2.8.4       Internal resources

Many commercial activities can be executed by other colleagues and communication with the client takes place at many stages of the value chain beyond sales. People outside your sales team can support by completing pre-defined parts or by contributing to other parts of the process.

When Brian was an engineer, he was in contact with his counterparts at the client’s organization and gathered valuable information from them. He wondered why he never shared this with the sales team. He concluded that it was not his job to report this back and he was never asked to do so.

Without knowing it, any employee who is in contact with the client is part of the commercial process. It is the sales director’s decision whether to make them aware of their commercial role or not. There are people within every company that don’t want to be involved in commercial activities. In that case, the sales director might decide not to alert them to the commercial role they already play, because they are performing this role automatically anyway. On the other hand, by making an employee aware of their commercial role, they can be encouraged to improve the quality of their interactions or to help search for potential commercial opportunities.

Colleagues in non-sales positions, such as project managers, logistics coordinators, finance and administrators, field crews and management can all influence the overall success of the company. The direct influence of their role is what receives most of their attention. Nevertheless, these people can also play a vital role in growing the business. Non-sales people are in contact with their counterparts at the client’s organization. These counterparts often have a lot of knowledge and are willing to share it more easily, so the sales team should have processes and procedures to allow this information to flow back to them.

Figure 2.10 Non-sales communication

Your logistics department takes your contract requirements and execute them. They have direct contact with your client and you are happy that you don’t need to be central to that conversation. The logistics team speaks to their counterparts and experiences the challenges they face. When this information is fed back to sales, you will be able to address these challenges in your next bid document. And, when your finance manager has chased your client and found out they are on maternity leave, it might help your next commercial process if you send your client a little postcard to congratulate them on their new born.

Brian went back to his former department and chatted to his former colleagues. They were surprised that Brian is still in the role, having not expected him to survive among commercial people. Brian explained that sales is not difficult and that it relies on information and sharing the word. The engineers listened carefully. Brian explained that sales is just as important as the completion of any project. After a while, the engineers got the idea that they could support Brian in some of his challenges and offered their help. They proposed sharing the information obtained from their client counterparts.

The list below provides some inspiration on what activities might be delegated internally.

·      populating the CRM system with names and details of counterparts at the client

·      asking for referrals and client feedback

·      providing technical training to (new) sales people

·      importing financial results back into the CRM system

·      providing content (text and pictures) for marketing purposes

·      providing information on competitors

·      providing market information

After you have evaluated what might be delegated internally, you should try to create support within the company. Preferably, this should not result in top-down instructions. As a sales director, you should actively persuade the colleagues whose support you need. Convince them of the value of the extra activity you are asking of them. In return, make sure you use the efforts of your colleagues, give feedback on the actions arising from their efforts and keep motivating these colleagues to take on these tasks.

2.9       Chapter re-cap

In this chapter, the foundation of the sales process has been laid. We defined:

·      the different sales activities

·      the importance of identifying the required input

·      the relevance of defining the output of the sales process

·      that the output forms the basis for developing the sales strategy, which results in the formulation of sales objectives

·      the required resources to complete the sales process and meet the sales objectives

The sales process has been broken down into different steps from input to output. We discussed the requirements and the influential factors of the commercial process to illustrate the big picture. The next chapters focus on the three main commercial processes. We start with marketing, since it is regarded as the starting point, where top-funnel activities take place. Further down the funnel and later in this book, we cover sales and account management. The next sections of the book provide instructions, guidelines and inspiration for managing the sales team through the complete sales process.





About the author

Bram van Oirschot is a senior industrial sales expert, who has sold projects worth millions globally to blue chip companies such as Shell, Exxon, BP, Rio Tinto, Vattenfall, etc.. In this book Bram shares his sales system and personal experiences view profile

Published on October 31, 2019

Published by

70000 words

Worked with a Reedsy professional 🏆

Genre: Business & Economics

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