The Manufacturing Executive
The Manufacturing Executive

Episode · 1 year ago

Stop Giving Away Engineering and Consulting Services for Free w/ Joe Sullivan

ABOUT THIS EPISODE

I did something a little different in this episode. As opposed to bringing in an outside guest and interviewing them, I did a solocast. It's just you and me talking about things I've learned while serving the industrial sector for the last eight-plus years as a sales and marketing consultant. Today, I discuss how to stop giving away engineering and consulting services for free.

Here are some of my thoughts from this episode:

  • How to package your expertise so you don't go down these long time-suck paths where you give away free insight and engineering work
  • Examples of how paid engagement can work, including a site audit, a second opinion service, a research report, and a product sample
  • An idea I call "the spectrum of value creation"
  • ...And how your buyer's mindset changes when you approach them this way (and why that's a great thing for your business!)

To ensure that you never miss an episode of The Manufacturing Show, subscribe on Apple Podcasts, or Spotify, or here.

Manufacturers who sell complexengineering driven solutions are often giving away hours upon hours oftechnical expertise up front for free and just to win the job. Welcome to the manufacturing executivepodcast, where we explore the strategies and experiences that aredriving midsize manufacturers forward here, you'll discover new insights frompassionate manufacturing leaders who have compelling stories to share abouttheir successes and struggles and youill learn from dtob sales andmarketing experts about how to apply actionable business developmentstrategies inside your business. Let's get Ino the show welcome to another episode of theManufacturing Executive Podcast, I'm Joe Sullivan your host and thecofounder of the Industrial Marketing Agency Gerilla. Seventy six. So I'mgoing to do something a little bit different today, and I intend to dothis from time to time, maybe once a month or so would be my goal. But whatI'm going to be doing here is recording a solo cast or a one person episode.This is just me as opposed to bringing in an outsideguest and interviewing them. I'm going to lean on some of the things that I'velearned serving the industrial sector for, say the last eight eight plusyears as a sales and marketing consultant and agency CO owner andbring some of the topics to the table here that have really resonated havehelped manufactures that we've consulted. Take big steps forward andthe first of those topics today has been one that it's a more recent topicfor me. But it's really taken off. I've been a guest on other podcasts. Talkingabout this, I've written a series of well two articles, a set of twoarticles on the topic, a lot of the content of Posta on Linkedin, hisreally resonated, and- and so I thought it would make a newbrainer topic here for a solo cast, and so the topic isessentially this: How to stop giving away engineering and consulting forfree, and this is a pattern that I've...

...started, seeing with manufacturers aswe consult them. Really what's going on here. IsManufacturers who sell complex engineering driven solutions are oftengiving away hours upon hours of technical expertise up front for freeand just to win the job? This is before there's ever a purchase order with acustomer they're diving in and they're leaning on some of their best internalpeople to demonstrate that you know were capable of doing this. We can help,show you what the solution looks like and to earn trust so that thispotential customer winds up, saying yeah you're the ones for us we're goingto write the check- and I understand why you did this and why you do this.If you do it, because, frankly, there are a lot of parallels to how marketingagencies operate and we've been in this trap in the past two now we figured outfor ourselves how to get out of it and to start charging for that expertise ina way. That's not driving away potential opportunities, but actuallybringing in more of them and better ones too, and I can't help but thinkthat the same idea of of bringing in a new customer through asmall paid consulting engagement can be the way to earn their business for thelong term for the bigger engagement that you really want to sell, so youmight be sitting here thinking I not in our industry doesn't work here. Youknow O r. The challenges that Aur customers face are super complicatedand we can't give them an off the shelfsolution. We need everything, need to be custom and delivered to them upfront in a very custom way, and we have to earn their respect and attentionfirst and yeah. That may be true, and it probably is trutful a lot of you,but it doesn't mean you have to give it away for free, so bear with me here andI'm going to get into it and and I'm hoping that you walk away from here atleast thinking Huh. I wonder if this is something we should explore, wonder ifwe could think about the way we...

...approach new business a little bitdifferently and maybe figure out how to package our expertise in a way that youknow we don't have to go down these long time, suck paths of getting away all this free insight andengineering work or whatever. That means for you. So let's get into ithere. So I want to start here by drawing a little bit of a parallel tothe way a marketing agency works, because it's really not all thatdifferent. If, if your customers of what your customers buy is a complexbig ticket solution that requires a consultative sales process, probably along buying process or probably multiple people involved on their endfrom engineers to plannt managers to CEOS to procarement. If all that isgenerally true for your business, that you're not sutselling a widgit off theshelf, then I think this applies to you and so the way what I've seen for ourbusiness over the years. Is You ow? The expectation is we're going to come inthere and maybe listen to the customer for an hour on a call and then we'regoing to dive into this long process of putting together an unpaid proposalwhere I'm pulling in strategists and writers and experts from my team tohelp figure out what solution makes the most sense for this customer and, inthe meantime, it's distracting their time from our paying customers. There'sgoing to be, you know a good chance, we don't win the work anyway, and it'sgoing to be hard to get the attention of the right people on the customersend if we're just sort of another vendor who's, quoting the job. So wekind of looked at this a few years ago and said now hold on a second Har. Ithin. I think we need to be doing this differently. We need to be paid forthis expertise and we need the customer to have some skin in the game or we'rejust going to be another interchangeable company and it's Gol bevery hard to differentiate ourselves from anybody else.

So my idea here and what we have done forourselves with success and what we've started, helping other manufacturingorganizations figure out how to do for themselves is, is essentially Thas. Take the first onepercent or three percent, or five percent, of what your flagshipengagement, you're generally trying to sell, would be and design and brand a call it the your company diagnostic orsomething along those lines where this is step, one in any new customerengagement. It always starts the same way. You do some sort of analysis whereyou're putting your best people on it, because you can afford to since you'rebeing paid for it and you're helping the customer figure out what solutionmakes the most sense for them, and so I think this thing could be. This could be a lot of different thingsand Ou know a few examples of the form that this paid engagement could takewould be. You know one maybe a site audit, if you're Aying, automation,company or somebody who you know, builds custom machinery, can you get onsite, be paid to do so, but have a very defined process for coming in, and youknow evaluating ABC and d leaving and then providing a report on everythingyou found and a set of recommendations along with expected, Rali or how itwould transform you N W operating efficiency on the floor or whateverthat might be. But Y, U N, W sight. Audit would be a great way to do this,and maybe you could charge even if it's a few thousand dollars for it nowyou're, covering the cost of sending your person, you know, put them on anairplane, sending them across the country and and spending a day in thefacility and their time afterwards. I don't know what the right price tag isfor you, but anything is better than zero I'll talk about. Why, in a fewminutes I'll talk about why your customers, probably more open to thisidea than you may expect you knowother thing to do, would be a second opinionservice. We've seen this work well in the construction industry and I thinkit can work well with manufacturers as...

...well, where you know, if you thinkabout it, the cost of switching a service providers often enough to delaychange so rather than you know, asking a potential customer to completely makethe switch from whoever's been serving them for years. You coald you come inand do a small second opinion service and get paid a small fee for that, sothat they it can kind of baby step in with you, but see. Youre thinking andyour expertise come to light so that that's another way to do it. Some kindof paid consultation could be another way. Maybe it's you know, maybe it's anhour long, free consultation over the phone, followed by some kind of paidconsultation or engagement, where you can help them figure out the solutionand not have to worry about. You know sucking your teams, time away fromother paying work. We do some something like this for our clients or our futurecustomers that we call the industrial marketing roadmap. Wer We've defined avery specific process. There's a discovery survey, that's filled outahead of time, there's a half day workshop with leadership, there's acouple weeks of research and there's delivery of a plan. What's your versionof that? Another thing you could do would be aresearch report: How about conducting some investigative work to explore avariety of solutions, and how could you package up those insights or maybethere's w customer interviews involved there, where you actually interviewexisting and past customers of theirs and try to understand what actuallymatters to them and then deliver all of that recorded audio files and a summaryreport to help them figure out? You know what maybe, what changes they needto make or what direction they need to go in Ou. Another thing you could do asknowledge transfer. Could you, rather than you K, O coming in and doing allthe work for them? Could you arm some of their team members to tackle some ofthe lowhanging fruit and in the process of doing so, you establish yourself asan expert consultant. So that's another way. It may be a product sample. Someof some of you listening probably give out product samples already, dependingon the industry you're in we work with...

...some companies in packaging and labelmanufacturing and that's a common practice for them, but maybe in yourbusiness theres a way to do a small version, whether it's free or not, freeyou know, could you create a small version of prototype? I guess would beanother another thing to do, but actually be paid for that, so those areare kind of some ideas for what that you know, taking that first fewpercentage points of the bigger engagement could be in delivering it ina paid way. Now I want to shift gears here for a second, because I thinkthat's that's one of the early steps, but I think that there are there's thisconcept that I have sort of named the spectrum of value creation. And if you think about all the ways youcould create value for your customers, your most most manufacturers that I seeare either you know, they're doing something like a free consultation,like we've talked about here, giving away all this expertise for free, freeengineering work and then there's the big flagship implementation, which isprobably some fiftythousand to million dollar solution, whether it's a productor some service that you provide. But it's the big sort of flagship thingthat you really want to sell and there's very little between that, andso what I would challenge you to do is say you know almost draw a Horizonaline and put that free consultation. You know somewhere somewhere towardsthe left side, not all the way to the left. Put that flagship implementation.All the way to the riht is the biggest thing, the biggest way you could createvalue for a potential customer and then what you need to do is start filling inthe gaps between that. So you know, if you think, about all the expertise andexperience your team has before you would offer free consultation. Thereare other ways you could get your customers engaged with your company andprocessing. All this knowledge you have and consuming the insights you have tooffer, and I think the best way to do that is to simply publish articles onyour site. It's the smallest possible...

Tran transaction between a prospect inyour company. If you can say what are the most common questions, we get andanswer them in the form of a five hundred word, blog Posta articlespublished them on your site, now you're creating an opportunity for somebody tosee the way you think and the problemsyou're capable of solving to demonstrate you've seen these issuesbefore and you there are different ways to solve them. But here you know hereare some of those options, so many manufacture websites are allabout themselves and it's just like a digital broshure, and nobody reallycares about that until they believe you understand their situation and havesolved their types of problem. So the the smallest simplest way you cancreate value for somebody on the path to the bigger sale is a free publishedarticle or short video of you talking or you know, a Webinar. You could record,for example, so that's one thing I think the next step in terms ofcreating value would be what we'd call a gated resource or something thatwould require somebody to submit some contact information and so now they're,sort of giving you permission to market to them or to pick up the phone andcall them because you're trading them something of value, and that could be atool like an Rli calculator could be asking them to register for a Webenaror subscribe to your newsletter. A lot of different ways to do this, but now you're sort of moving into thisplace where th, the your prospect, is essentially paying for something butthey're not paying with cash they're paying with the currency of online leadgeneration, which is their contect information, okay and then from there.As you start moving more to the right on the spectrum of ways you can createvalue, then then maybe there is that free consultation, but instead ofinstead of forty hours worth of free engineering work to that you give away.Maybe it's a one hour call with one of your senior engineers to sort of diveinto the situation and determine whether there's a fit and t sort ofintroduce the paid baby step consultation that would follow so thatthat would be the next one right. The...

...the paid consultation, the version,your version of that industrial marketing roadmap, that we do that Idescribed Brandit, call it the your company diagnostic or that Your CompanyAudit, or whatever, whatever you want an you, want to put on it but thinkabout what all the steps are and clearly articulate those create alittle pedioff and hopefully a page on your website that can sort of say thisis the process everybody goes through with us. This is how much it cost. Tusis exactly what you can expect to get out of it and from there will help youdetermine how to proceed. How to implement this. So that's the next oneand then I think, there's then you start moving towards the biggerengagements once you've done those types that sort of preliminaryengagement now you're opening up the door to a bigger engagement, t theflagship thing you sell. So I think there are a lot of benefits to doingthings this way, and the mindset of your buyer is just going to change whenyou can, you can engage them in different ways than just you know.Here's this! This free consultation and then here's this this huge engagementwith nothing in between, and so some of the some of the things that I think aregoing to change. Are you a the sale is going to start beforeyou even talk your future. Customers are going to buy on their schedule, notyours. So if you can create an opportunity to build trust with yourcustomers and your prospects before they're, ready to talk well they'regoing to consume sort of bite after a little bite of your expertise in theform of articles or videos or webinars or white papers, or podcast like thisor whatever medium you choose, this is your chance to start earning theirattention for the ready to pick up the phone, so the stale starts before youtalk is the first benefit the second benefit, or way that tha, the mindsetof f your customers is going to change. Is it they all of a sudden have skin inthe game that is going to earn the attention of decision makers, and thisis really the biggest surprise that...

...that I found when we started operatingthis way. Ourselves is you know before we we had this paid five thousanddollar industrial marketing roadmap engagement and we were giving away allthis expertise for free, which really wasn't that different process wise. Itwas just. It was free. Well, the CEO very rarely came to the table. Thepeople we wanted that meeting would sometimes show up and sometimes not. Ultimately, procurement was hagglingwith us over price. If we were being considered for the job- and we werejust another vendor that that was the reality, we were another vendor all ofa sudden when we decided we were going to put a price tag on this to find theprocess we all of a sudden earned the attention of the C suite the VPF saleswould be there. The CEO and president would be there. They would communicateto the rest of the R team that this is important. So it's having some skin inthe game just completely changes the way you're going to be perceived a asan expert rather than a vendor. The third benefit or mindset shift. Is thatnow you can give it your all so inwhen you're, giving away all this free,consulting or engineering it's a massive time suck on your most valuableresources, because of course you want to put your best people on it. Yourmost experienced people to help figure out what the solution should be, butyou can't really do that when you can give the future customer who's, notpaying you that your full attention in a lot of cases, because you need thetime of those people on paid engagements, but all of a sudden whenyou're getting paid for these engagements, you can afford to budgettime o some of your experts to to give this discovery process. Or this youknow pre engineering process, the time that it really requires to do it welland to come up with a solution that makes t most sense. So there's thatnumber four, the fourth benefit reminds set shift here is your customer is notgoing to want to backtrack. So one of the biggest objections that I've heardwhen I sort of talk about this process of not giving away consulting for freeis that people are afraid that...

...their prospects are going to take allthis information that was presented to them and then go elsewhere with it andhire somebody else to actually implement the remaining ninety fivepercent of that job when you've sort of done the first five percent at asmaller fee, but here's the reality. This is my observation this. What I'VESEEN FOR US! This is what I see happening for other companies. You knowif you have spent hours upon hours, working with that future customer toarrive at the perfect customized solution. How likely are they reallygoing to be to say I think I'm going to go elsewhere and see? Who else couldimplement this for me and study you, I'm gonna, I'm going to go, see hat ifI can get the low bid from somebody else. You know, and even in theunlikely scenario that they do go elsewhere. It's okay, because you'vebeen fairly compensated for what you have done to date. So if they want torun in the other direction, whatever right, it probably wasn't theright fit for you anyway. So that's that's sort of my my the way. I offsetthe objection that well what F, what if they don't hire us? What, if we don't wask for the full project up front, probably not going to happen, probablynot a problem you're going to run into and then the fifth point o benefitmindset, shift that I've sort of touched on already is just this ideathat you are no longer seen as a vendor. If the stake holders are now at thetable from the beginning, you have the attention to earn theirtrust and attention. Not the opportunity o earn their trustedattention, not just the the lower level people at the company and theprocurement team. You've got the C sweet. there. You'vegot the decision makers there and imagine all the time you've been ableto spend with them now influencing the you their buying process, as opposed tojust shooting another proposal at ther at them or some. You know some Bank ofengineering work that you gave away for free along with a whole bunch of othercompanies. That did the same. So it's really a differenttiator in terms ofpositioning yourself as the true expert,...

...so that pretty much sums it up. I hopethis was Helpfu. I hope this at least got you thinking about whether the wayyou've always been doing it is really the way you should continue doing it. We have a few articles, like I saidthat we've written on this topic, I will link to those in the show notes.So that's all for today. Thank you for joining us. I hope it was helpful andwe will hope to see next time on the next episode of the ManufacturingExecutive, podcast you've been listening to themanufacturing executive podcast to ensure that you never missed an episodesubscribe to the show in your favorite podcast player. If you'd like to learnmore about industrial marketing and sale strategy, you'll find an everexpanding collection of articles, videos guides and tools, specificallyfor B, to B manufacturers at Gerilla seventy sixcom war. Thank you so muchfor listening until next time.

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