Sean:
With all the fancy introductions out of the way, welcome to the podcast, Matthew.
Matthew:
Oh, thanks for having me, Sean.
Sean:
The pleasure is all ours. You're on here to talk about sales and all things sales. I guess to kind of kick things off, what are the latest buying trends in the packaging industry?
Matthew:
There's a few that are I think really interesting and then some that people probably wouldn't suspect. The usual suspects right now in buying trends is that most buyers, if you're a packaging equipment manufacturer or you sell into a CPG or whatever that is, your buyer now wants you not just to know your equipment, but they actually also want you to know everything in the line and how it operates and how that's going to affect how your equipment operates. They now expect you to know that information.
But probably a bigger trend, and this is something that people really have to start paying attention to, Sean, there was a study by Gartner and the research was kind of interesting, and I've shared this with some people in the industry, but what this study showed is that buyers now are beginning to say they want a sales rep free experience.
Now, this isn't specific to the packaging industry, so I don't want anyone to panic, but the trend is towards a rep free experience. Can I do this online? Can I do this by getting the specs and figuring it out myself, such to the effect that if you're a buyer, you're more scared of dealing with a rep than you are of going to the dentist, as an example.
Sean:
Wow.
Matthew:
That's a trend we have to face as salespeople in the industry, and it's important to not ignore that. One of the things when I'm coaching CEOs, I say, "The first thing we have to start with is the truth. You can't pull the wool over your own eyes."
Sean:
No.
Matthew:
That's the truth. Now, there's some good news in here. When buyers are dealing with a sales rep that provides insights into how they can improve their business, not transactionally, and this is important, not, "Hey, here are specs. We have faster run speeds. We can print on labels at lower cost." That stuff's nice. But when you're able to help educate them on what is happening in the world and what they should care about, and you do this in unique ways, the equation flips. They actually will seek you out.
Sales reps today, one of the trends that's really important that we have to recognize is you cannot be about tech and specs. It just cannot be that. You've got to engage with your buyer in a different way, and it has to be in a way where you're helping them focus on what is and what should they care about. That's thought leadership. But at the lowest level is just telling people, "Hey, we can give you good service. We can take good care of you, and you get me." That's the lowest version. And so the trend is, how do we educate? How do we do this in a way that ultimately helps our buyers think of us and think of possibilities in new and unique ways? Those are some trends.
But again, I think there's always, now you have to pick where you're going to do that. Am I going to focus on lowering the cost of labor? Labor is a big problem in the industry right now, getting people to show up for work, the increased cost of labor. These are big challenges for anyone that's producing anything right now. Understanding that, but having an approach to what the buyer should care about as an example, is really going to matter. Anything around sustainability is something they should care about. Anything around lowering the cost of labor or operations is something they should care about, always safety, always flexibility in the line. These are things they should care about, and they all speak to ROI and improvement inside of a plant.
Those are some of the trends that we're seeing. The biggest one that salespeople and business owners in the packaging industry have to start caring about is most importantly, what the buyer wants in terms of an interaction. Does that make sense?
Sean:
Yeah, absolutely. And I guess with that in mind, if that is understood, what are some other best ways to dramatically improve your close rate as a salesman?
Matthew:
The biggest thing, Sean, is ... This is going to sound like a broken record ... You have to qualify your opportunities, okay? When we talk about increasing your close rate, what I mean by that is I have an opportunity, I quote it and I want to close it, right? And what's the biggest problem today? When you give out a quote but you haven't qualified, what happens? Most of the time you end up chasing that quote or you end up keeping in touch, if you will, or staring at a pipeline full of opportunity that has no date on when you'll have an answer as to whether they're working.
To increase your close rate, you have to qualify. Now, in simple terms, what this means, Sean, is I have to qualify three things. I need to qualify, and a lot of people will call it needs. Needs is a mistake. You have to be able to qualify the pain. There's a saying I love to say, which is, "In the absence of value, money is all you're going to talk about." Once you gave them your quote, they've got the money answer, and if they don't have pain, you will not hear from them again, so you have to qualify pain first. Pain means I'm qualifying that there is a business case and this affects the people at a personal level that make the decision. The puzzle I have to put together is what's the gap that my client or buyer is trying to close? Why does the gap exist and how does it impact the organization and the individual?
I have to understand those things, and then there's a follow on to that. To close out and make sure I've qualified pain, I need to be able to summarize and validate the importance in conviction of my buyers to do something. In other words, I have to answer the question of, well, what happens if we do nothing? What happens if this problem doesn't get fixed? And if I don't hear level 10 like conviction, then I don't have a qualified buyer in front of me yet. Now I know people will say, "Well, but there's a process and a lot of times I have to submit and I can't talk," and I understand, but that's about building relationships prior to the opportunities coming to you.
If I qualify pain, the other two things I have to qualify is budget. Is it available? Are they willing and able to spend it? And of course, I have to understand their decision process, not force mine on them. As a salesperson, I always want to close immediately, right? I have to understand their decision process. And the decision process is not when you sign a contract. It's the steps that they take that you co-build together in order to have the equipment in place and the problem solved.
The big mistake I see a lot of salespeople make when they go to qualify is they put pressure on the buyer. "Well, when are we ready to sign a PO? When are we ready to move forward?" And that's going to cause the buyer to hesitate and to complicate the buying process. They go away and hide until they're ready to give you an answer. Instead, what I need to understand as the salesperson is when does the problem need to go away?
If I understand, and I've qualified in those three areas, pain and budget and decision, and we do this in the training program with PMMI, we do this in a lot more detail, but in general, if you have those three things, you're going to increase your close rate. Your goal should be to increase your close rate to at least a 50% close rate. Anything that doesn't meet those three criteria, general criteria should probably be something that's disqualified, at least for the time being. I hope that helps in terms of increasing close rates. But in summary, it's those three things, and do not put pressure on your buyer. Instead, help guide them through that process. Does that help?
Sean:
Yeah, that does help. You sort of touched on a couple, but are there other common mistakes that you see with sales in the packaging industry?
Matthew:
Yes. I see a bunch. First of all, I love the packaging industry and have been in it for 20 years because I love the entrepreneurial nature of the business. You're an inventor, and if you invent something, you probably love it and want to talk about it a lot. The problem is that your buyer doesn't want you to talk about your solution. They want to talk about their problems. And if you let them, they will talk a lot.
Now, the mistake I see is you don't let them talk about the problem and all the different ways that it impacts them. And we don't look at the entire buying ecosystem. In other words, there's somebody operating a line. If you're selling a conveyor system or you're selling a labeler or you're selling a palletizer, anything like that, you have to understand you invented something really cool and they need to know about it, but they don't ... The old saying is nobody really cares how much until they know how much you care. Until you can connect your cool stuff to their pain, their frustrations, your cool stuff just sounds like everybody else's cool stuff. They're not capable enough to really separate you from your competitors. The way you separate yourself is you stop talking about your equipment. You don't throw specs in front of them. You take on the persona of a country doctor and you listen. You walk the line with them, you ask questions, you talk to the line operator, you talk to the CFO, you talk to the buyer.
And you might be panicking and saying, "Well, how do I talk to all those people?" Well, that's part of building the relationship before there's an actual need, but you've got to let them talk at every level of the organization, the people that are making the financial decision, the people that influence the financial decision, the people that are the end users. By getting that full picture, the recommendations you're going to make are going to be about making problems go away and ROI happen. That's what they care about, right?
If you think about that old saying, which is, people don't want to buy quarter inch drill bits. When they buy a quarter inch drill bit. What they want is a quarter inch hole. They don't care about technology and how you made your drill bit at all. Can it make that quarter inch hole over and over again? Does that make sense?
Sean:
Yeah, that absolutely makes sense. That's a great way, that's a good analogy at the end there that explains it, sums it up pretty clearly.
Matthew:
Yeah, thank you. And in addition to that, I would say there are a couple other mistakes, and I'll just cover these high level. If you don't know who your ideal client profile is, everybody looks like an opportunity. Does that make sense? Everything looks the same.
Sean:
Mm-hmm.
Matthew:
I may want to sell custom solutions, but I'm selling it to standard applications. That's a big mistake. Know who your customer is. Know who you truly help and understand where you have a defensible value proposition and be clear on who that client is, how they put their pants on in the morning, what they care about, what they worry about, the problems they deal with every day. And by understanding that ideal client, you're able to have a conversation as if you understand what their life is, not just that you have a piece of equipment you would like to sell. You have to understand who your client is and what they care about. You need to focus on those.
Some other mistakes I see is we don't really have a territory plan. In other words, we haven't gotten clear on our ideal client profile, which means when we look at the world that we sell into, we can't easily look and say, "These are the people that buy our equipment and those are the people we're going to go build relationships with." Because we don't have that perfect avatar, and again, there'll always be exceptions, it's very hard to see who we should be spending our time with.
And maybe one of the last things I see is we're ignoring our existing clients to go get a new one. A lot of times our clients have a lot more business they could give us if we just understood how to navigate that conversation with them more effectively.
Those are some common mistakes I see, but the last one is because we don't have those, we don't have any sort of a unique value proposition, right? When we go out into the market, we look and sound like everybody else. And the problem with that is if you look and sound like everybody else, again, price becomes the only differentiator and a very, very hard way to sell because that is a constant race to the bottom.
Those are some mistakes we see. There are more, but those are some of the common ones we see, Sean.
Sean:
Again, with that in mind, as you laid out some of the things that we shouldn't do, what are some of the ways that we can separate ourselves or what are some things that we can do to separate ourselves from the competition, and I guess more specifically, what is USVP?
Matthew:
Okay, so that's a good question. USVP is your unique sales value proposition, meaning when I share this, I can defend it, right? That is if I can reduce your labor cost, that is a unique sales value proposition, right?
Sean:
Yeah.
Matthew:
If my cleanup time is faster, my change over time in equipment is faster. If I use less ink, less energy, any of those things can be unique if I can defend it. I'll use a ... so that this is something everybody can kind of get an example of. There was a great study done by this ... I'll leave the names of the companies out, but a company invented a paint that was very good, and it was a one application paint for commercial builders, and it was about a 40% premium over standard paint you would buy. They were having a real hard time selling it because while they understood the unique value proposition, they weren't articulating it. And if you're a contractor, every penny counts. Why in the world would you buy paint at 40% premiums to what you're buying paint for now? You wouldn't, unless you understood your value proposition.
So what this paint company did was they went back and did a study on the amount of labor to do a two coat application versus a one coat application of paint. And what they found was they needed to change the value proposition to the buyer, the contractor, and the value proposition was you shouldn't care as much about the cost of the paint as the cost of the labor. Labor is 96% of the cost of painting an interior of a building. By reducing to one application, you can have a crew onsite for half a day instead of a full day, thus saving you thousands of dollars. The small premium of 40% is actually only pennies versus the thousands you're saving in terms of not having all that additional labor.
Sean:
Interesting.
Matthew:
Again, unique value propositions aren't fluffy, who knows what you're actually saying. They have to be things you can defend. The problem is that as inventors, a lot of times we're so excited about what we've created or an organization, even if we're big or we're multi-billion dollar organization with a bunch of acquired companies, a lot of times we just get so focused on our equipment or what we do, we forget how to put it into a unique value proposition that our buyer understands and cares about, right?
That's the unique sales value proposition. That takes work. And I encourage people, if you're listening to this, to figure out what that is. What is it? Where are we actually we can defend that we are increasing ROI or we're decreasing costs or we're doing both, or we're creating some other value proposition that we can defend? And believe it or not, if you look, there usually is, but if you're not tying the market, the market's not going to get there on their own.
There's a second part to this, Sean, which is really important, which is, and I hate to throw more acronyms at you, but your USX. Once I know my unique value proposition, I have to create my unique sales experience. Part of every business is not just what you sell in the value proposition, but it's the experience of dealing with you when selling to them. That has to be important.
Now, I'm not suggesting everybody get into the hospitality business here for a second, but are we really asking ourselves what kind of an experience do we want to create with our buyer? What do we want them saying walking away from that experience so that they'll repeatedly do more and more business with us? That's key.
The unique sales experience is where typically, you have a repeatable sales process, and that's something we train with PMMI, but also it's what is the blend of technology I'm using to create that experience? And in there, the client gets a reliable, predictable, enjoyable buying experience, which makes them want to buy more.
A couple examples of that very quickly. What I find is in general, in the industry, most people like to communicate electronically, right? Emails and texts. Nobody wants to pick up the phone. Getting in person, some people love it, some people hate it. But at the end of the day, one of the things you can look at is, what is my competition doing? And once you know what they're doing, do the opposite.
Sean:
Interesting.
Matthew:
Sit down with your sales team. What does our competition do? How do they qualify an opportunity? How do they submit a quote or a bid? What are those touch points? How could we do that differently? How could we do more in-person stuff, more phone stuff rather than the others?
Now, I got to remember something here, which is a lot of the buying for today is in the millennial category. Millennials like social media, millennials like video. I might also, as part of my sales experience, shoot a quick video, have a whiteboard behind me, and draw out my equipment and how it actually fits in with other equipment, or talk about a topic that I think that my buyers should be concerned about as we go into the 2024 economy. I should be talking about what are the labor market predictions, what are the cost of material predictions, here's some ways you should be concerned about that, and here's some ways you can lower your costs or increase your overall production, and I can have a whiteboard where I'm drawing some things out, shoot it as a quick video and post it on LinkedIn.
Clients love those ideas and it bonds you to them without you asking for an order, which builds that relationship. These are things where I would say, if you have a great sales process ... If you don't, be honest with yourself. Start by telling the truth. But the next is, how am I engaging my audience using a various, or I should say a varied set of communication, so text, phone calls, more in person, LinkedIn videos, maybe a personal video email to a buyer, maybe even if it's a client who just purchased to say thank you? How am I creating that better experience at these touch points?
The unique sales experience is really about a blend of having a good sales process, great technology, and a great value proposition. And so those are things that take some work, but ultimately, remember, your end game with unique sales experience or unique value proposition is for your client to get what you do faster, because when they get there faster with you, meaning what you do and what your uniqueness is, and they enjoy that process of working with you, you're going to win more often. But again, it's not tech specs. It's not my PowerPoint presentation. It's not different colors and graphics. That stuff is nice. I don't know how unique it is. So hopefully that helps a little bit.
Sean:
Yeah, absolutely. I'm thinking all the stuff that you're putting out there, we have the Pack Expo East coming up, and there's so many opportunities at the show, obviously, to gain new leads and new clients and to talk to people. I guess, could you talk about Clients Squared and how using this mechanism increases trade show leads and clients?
Matthew:
Sure. The idea with Clients Squared is really simple. Earlier in the broadcast, I talked a little bit about maybe we're ignoring our current clients and going and looking for new ones. Hopefully everybody listening here has ... If you're brand new, you probably don't have this yet, but your company probably has some clients that you absolutely love. These are the ones that usually get ignored, so easy to do business with. The ones we spend our time with are the ones that are misfits or challenges or we should have never sold in the first place. Clients Squared takes your ideal client that you're already working with, and through a series of questions, we identify their relationships that should also be relationships or buyers of our equipment.
As an example, let's say that I have a contact at Proctor and Gamble, which is buying millions of dollars of equipment from me every couple of years. I probably could guess that they have relationships with other manufacturers. Of course, there probably could be other plants I'm not doing business with. There could be people that left Proctor and Gamble that are now at a different plant.
By sitting down and analyzing these relationships and then valuing them, meaning, well, if I were able to do business with the Minneapolis plant, right now I'm in the Chicago plant, but if I could get the Minneapolis plant, there's probably $2 million worth of equipment purchases there too annually, right, I can value each of these opportunities.
Now, again, you're getting wealthy on paper here, but what you can very quickly see is there are a lot of relationships where I've got built-in credibility and trust. These are all things with new clients. You have to get over that hump, and that's hard. But when I can borrow the credibility of my best relationships, who say, "I trust Matt. I've worked with Matt. Matt has never let me down, and I've worked with others. Matt is the best," this is important.
There's a quick statistic here. Business to business buying decisions 84% of the time involve checking a reference or an existing relationship or a recommendation. As cool as the internet is, and as cool as things like Amazon giving you how many buyers rated this five star, we kind of know you can buy that kind of testimonial nowadays. It's not really valuable. But when a human being says, "I trust that person and I've done business with them for a long time," that's extraordinarily valuable.
Clients Squared starts with that great relationship and has you build out and essentially begin to partner with your best clients to help each other beyond just a transaction. And that's really what is going to be more rewarding to a top-performing sales organization. How do we build and emanate our success through our existing clients? How do we take better care of them and expand through them as part of our sales force, and as well, enrich their lives by bringing them new information, ideas, other relationships they want as well?
And what you end up with by going through this exercise is essentially a list of names and a value. I've seen people come back with literally over $100 million worth of opportunity, and it might be a $20 million manufacturer, but they'll say, "Oh my goodness, there's over $100 million worth of opportunity here," and I'm like, "Okay." So these are easy, because you can call your good relationship, and we have a way of asking for referrals, which is very, very easy and not at all uncomfortable for anybody, but actually it makes it very, very easy for the buyer or your current client to say, "Yeah, absolutely. I'd be happy to introduce you," but it's not, "Can I have a referral?"
Sean:
Right.
Matthew:
That's Clients Squared in a nutshell. I hate using the term nutshell, but yes, that's Clients Squared in a nutshell. We go into that deeper in the PMMI training where we actually go through the exercise, which is really fun.
Sean:
Well, that's awesome. This was awesome. I really appreciate you taking so much time out of your day to come on here and give us a one-on-one, a high level walkthrough on selling to the packaging industry.
Matthew:
Well, my pleasure. Like I said, I'm passionate about the industry. I love the people involved. I've been helped by so many people in PMMI to get to where we are, to have the impact that we're gaining, and I'm still learning every day. If anyone's listening and they have ideas for me or things I should include as we move forward into 2024, '25 and beyond, I am all ears. Constantly learning. But thank you, Sean. Thanks for the air time.
Sean:
Our pleasure
