Ok, hopefully, that headline got your attention! But hear me out, and when I’m done, I think you will agree with my characterization of this important business process.
First, let’s get our definitions aligned: Installed Base = customers who have bought machines from you and buy parts, consumables, service, replacement units, upgrades, and modifications, etc for these machines. Expanded definition = customers who have not bought your product, but do occasionally buy your aftermarket parts and service to maintain and operate equipment from another manufacturer.
What is Installed Base Prospecting?
Installed Base prospecting is the act of looking for sales opportunities in this vast pool of customers who have already bought something from you. Installed base is a motherlode of sales opportunities – if done right. If not, like a lot of manufacturers we meet, it is a barren desert of growth. But it need not be that way.
So why do I say it is broken? Very simply, the combination of people, process, and tools that deliver the outcomes of Installed Base prospecting, i.e. sales orders – don’t function as they should within OEM. Here’s why:
People:
Despite titles like “Inside Sales Manager” or “Sales engineer” or “Account manager” – more often than not, the prevalent behavior is “order taking” vs. selling. And it is not because these professionals are incapable of selling – they’ve almost always never been trained to do so, or even worse, expected to engage in a sales motion. So why would you expect them to know how to sell? Or even more elementary, how to prospect in the Installed base? (see the LinkedIn post Ron Giuntini wrote earlier this week).
Process:
This one gets me. Not only are people not trained to prospect and sell, very seldom are they expected to follow a well-defined sales process. The excuse usually falls under the rubric of “order sizes are too small to track and waste our time on”. Well, all I can say is that it is a self-fulfilling prophecy. Most customers will need more than the 1 or 2 things they want to order from you. There is sufficient data and information available to analyze and decide on the cross-sell and upsell options. But if you never track it, you will never know the opportunity existed. So let’s go build a solid process to drive prospecting.
Tools:
This is the piece de la resistance of the prospecting trinity. Spreadsheets are the de facto tool. CRMs are just making their presence felt in many companies, and they are “limited to” the equipment sales teams. Besides “hunting and pecking” inside ERP systems, or asking for a report from IT, most Installed base selling teams are starved of good, modern technology that could make their jobs easier. What we see often is a mishmash of custom-made analytics, very few of which are shareable, and aren’t deployable into action across functional systems.
“Taking a knife to a gunfight” is just not a formula for success. OEMs ought to do better, and help themselves succeed. They need to invest in building the right processes, modern tools purpose-built for the job and train their commercial teams on hunting and farming, not just order taking. Installed Base prospecting need not remain broken.