Executive Question: What is Happening to Our Business?

Headlines often appear about US jobs heading overseas and companies selling off parts of their existing company. Why is this going on?

Related to overseas jobs, companies in every product category must create products with the highest value to the customer. With a global market, come global competitors. Oversees companies have labor rates that are a fraction of domestic labor rates. Domestic manufacturers can’t compete on price and overseas manufacturers have proposals into some or more of your customers…or they will soon. In addition, the internet allows proposals & RFP’s/RFQ’s to be done on-line; diagram’s, design plans, and architecture can be done over the internet rather in person.

The companies that are thriving are focused on their core competency. This trend began with large companies about 20 years ago as they looked to outsource non-competency areas, like the cafeteria to organizations such as Marriott. Another example is Boeing selling their floor panel & air duct plant in Spokane, Washington. Boeing is a world class complex systems integrator applied to the most complex products today; commercial airplanes, space station, F18….. not floor panels and cockpits. Carrying this trend forward, businesses are exploring every aspect of their work flow & looking at what aspects can be outsourced; with outsourcing comes a move from a fixed cost to a variable cost structure. Those new companies that are flourishing are those that are picking up small niche’ aspects of business & developing deep, best in class expertise.

Customers are doing both, in most cases; looking for the lowest cost and disposing of parts of their engineering & manufacturing processes.

This applies to how we sell to these companies and customers. Their buying process is changing and therefore so must our selling process. As an example, it now becomes to important to consider such questions as:

How do we add value beyond the lowest cost?
Who is the customer? For example, is it, “The company that bought the floor panel & air duct plant or is it Boeing?”
Whose contract do they buy from?
Should we become the outsourcer to the division to retain the business?
What is the competition doing to react to this?

This is the playing field and the winners will understand the buying process and create a new sales process to meet or exceed customer expectations, learning from their experiences to create a new sales process for the next time and the next customer.

The winner will not be the low cost supplier but the business that brings value in alignment with shifting trends.

Jeff Rogers is co-founder of OneAccord Principals, which helps companies grow revenues with interim executives that can serve your organization on a project, interim, or permanent basis. He has been involved in both sales and management development for the last 25 years and has taught every aspect of selling: prospecting, presentation, closing, and answering objections. You can contact Jeff at Jeff.Rogers(at)OneAccordPartners.com.

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