2019 is a Burning Platform for Industrial Automation Suppliers & Channels. You’ll need to do something about these NOW… Amazon, Boomers, Tech Transitions & more!
You read the trade magazines with article after article and ad after ad about the same topics… Industrial Internet of Things, Artificial Intelligence, Cyber Security, and more. You note that the automation giants are moving ahead, and the newcomers with niche product directly in this space are partnering up. As an existing automation device manufacturer or channel partner, you might be thinking your chosen automation giant will be your guide and safe haven to make sure you’ll get your piece… but think again.
2019 is a year like no other for many industrial automation businesses. Yours may likely be one of them. Beyond the trends and fads, there are several significant market transitions that are already affecting your business. Your challenge is to change and adapt or face declining sales and a disappearing customer base. I’m not trying to peddle doom & gloom here, because each of these transitions also represents exceptional opportunities for growth, if you act. Further, many of the actions you take doesn’t require a huge financial investment, but rather your priority, focus, and commitment to execute the improvements.
Here’s my 2019 “Do Something About It “ list:
Amazon is for real. Customers will buy MRO parts and commodity products from them today… for many companies, this is the high-profit / low cost-of-sales part of your business that keeps the lights on. If this trend continues and business gets interesting for Amazon, they’ll begin to help with selection & carry even more of what’s on your line card.
You can and should do something about it! Beyond adding value (yep, we all hear that), there are so many opportunities here, I had to write a separate article to list ’em all. Here are a few. Have your tech support learn the customer’s application. Keep their drawings & key application notes and share with others so that you’re familiar with their application when needed. Provide free (within reason) support and service for MRO parts. When the part is purchased elsewhere, share the value of the service, comp the customer a few times, and let them know its free when they buy from you. Offer fast and direct access to your technical resources to help with parts of the customer’s project, including research, design, selection, proof-of-concept and even startup. “Register” key parts customers buy from you & offer significant discounts on repair or replacement. Ensure everyone working with your customers smiles, even when on the phone… the customer can tell.
Boomers retiring/changing customer base is for real. You should now see some of your loyal customers retiring or changing positions for a new workforce, with very different skill sets and none of the practical experiences that are needed to pick up the slack. The apprentice, on-the-job, company training programs and ability to double-up on jobs so the new person can learn have been cut back or eliminated several years ago when everyone decided to go lean and compete with global competition.
You can and should do something about it! For starters, be the company that provides the kind of training you received when you got started. Offer services to fill gaps in expertise that your customers no longer possess, start a forum for ideal customers with newer workers to learn from more experienced people. This is an opportunity to ensure your younger customers learn using YOUR brands, and are put on a path to success.
Industrial Internet of Things is for real, however some of the parts continue to evolve. Most customers are being directed by their senior management to create an IIoT initiative, even though they’re not sure about what that initiative’s goals might be for their business, let alone what makes up the IIoT. Meanwhile, the giant automation vendors are promoting new technology, products and partners to ensure they’re included. While they share their presentations and training with you, the information seems more like lofty concepts, while your customers are looking for clear answers about what to do and what to buy, and how it will meet their company’s fuzzy initiative goals.
You can and should do something about it! You can start by ensuring all of your customer-facing employees are able to de-mystifying what IIoT is all about for their customers. Challenge your outside sales team to ask about IIoT, to meet new, higher level people at their customers who need help. Be sure to provide practical steps the customer can take now, including choosing intelligent, networked automation devices and moving from ad-hoc factoring networking to a network infrastructure that can support IIoT.
The way your customers do projects and purchase products & services is changing, “for real”. Even the “older” generation of worker begins new projects with research and some design work done on the Internet. Customer preference for face-to-face visits from an outside sales person have shifted away from regular visits toward a preference that you visit once, then do everything with Email & phone calls. The same customers expect Inside Sales to be fast, flawless, and technically excellent. Your traditional outside sales, inside sales, and marketing efforts may seem to lose traction.
You can and should do something about it! Match the customers’ project cycle with the right set of online content, outside sales, technical support, inside sales, and customer service help. Think through the advantages each function uniquely brings. For example, Outside Sales and Specialists see and hear a ton of input touring a customer facility, and Inside Sales could have faster access to tools and resources than anyone else. You might adjust your teams’ behavior, tools, and training to match your customer preference AND take advantage of each group’s skills much better than they do today to dramatically improve their effectiveness and grow sales success.
IT/OT Convergence is real. Today, almost every new automation project uses Ethernet networking for literally all control and information needs. This market transition opened the door for IT to get involved in designing and managing plant-floor real-time networks. IT people speak a different language, use different tools and often don’t know much about industrial automation. If you haven’t been working with them, you’re likely losing influence.
You can and should do something about it! Ensure your sales and technical support learn both IT and OT languages, and make a significant effort to help IT learn how to succeed in an OT world. You’ll have great opportunities to help them not only work safely and effectively in a factory environment, but you’ll also have the opportunity to help them differentiate industrial products from office grade.
Cybersecurity is for real. While you get more than your share of horror stories, hacks and new threats, much of the noise barraging your customers has either caused them to default to their own IT group, or literally do nothing. At that same time, new projects mandate security, and if you’re unable to deliver, your competitor is likely to gain control of the whole project.
You can and should do something about it! Like many new and complex technologies, your sales teams may prefer to avoid this topic, but your opportunity is to ensure they’re armed with simple, solid advice backed by products and support. Most cyber security engagements reveal significant opportunities to upgrade network equipment and replace many of the automation devices as well as selling a few security devices.
Need to do something, but not sure where to start? Let’s talk. -Brian