Contact Us at www.tomingraminc.com 972-394-5736 or tom@tomingraminc.com Welcome to Interviews With the Sales Experts! Interview with Scott Lear, 15 Years with Schneider Electric including Area Manager and Director, Business Development Automation and Control Click Play to Continue (if needed) For more Interviews with the Sales Experts, go to www.tomingraminc.com Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (15:15) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Used services to construct a credible competitive bid Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.  (2:40) Grew Services from $1.5 million to $9.75 million in 4 years at 32% Contribution Margin in 3 State Midwestern Region.  Interviews With the Experts (604)  Schneider Electric (2:27) Becoming Commoditized Services was Warranty Services Took mind set change Not just fixing your own equipment Must do more for customer, even with competitor’s equipment Interviews With the Experts (604)  Schneider Electric (French electrical equipment mfr)  U.S. Division Grew Services from $24 million to $400 million/year at 32% Contribution Margin from 1994 to 2009.  (From 1% to 10% of sales.)  (0:48) Total sales grew from $2.4 billion to $4 billion, demonstrating product sales gains that accompany effective services sales.  Parent Company changed workforce from 7.7% Services and Projects in 2008 to 12.9% in 2010.  Produced 15% EBITA in 2009.  Interviews With the Experts (604)  Schneider Electric (French electrical equipment mfr)  U.S. Division Grew Services from $24 million to $400 million/year at 32% Contribution Margin from 1994 to 2009.  (From 1% to 10% of sales.)  (1:03) Total sales grew from $2.4 billion to $4 billion, demonstrating product sales gains that accompany effective services sales.  Parent Company changed workforce from 7.7% Services and Projects in 2008 to 12.9% in 2010.  Produced 15% EBITA in 2009.  Named an executive vp and board member to the job of discovering additional services revenue opportunities****. Interviews With the Experts (604)  Schneider Electric (French electrical equipment mfr)  U.S. Division Grew Services from $24 million to $400 million/year at 32% Contribution Margin from 1994 to 2009.  (From 1% to 10% of sales.)  (1:18) Total sales grew from $2.4 billion to $4 billion, demonstrating product sales gains that accompany effective services sales.  Parent Company changed workforce from 7.7% Services and Projects in 2008 to 12.9% in 2010.  Produced 15% EBITA in 2009.  Named an executive vp and board member to the job of discovering additional services revenue opportunities****. Switched from cost plus pricing to value based pricing.* Interviews With the Experts (604)  Schneider Electric (1:40) Becoming Commoditized Interviews With the Experts (604)  Schneider Electric (1:53) Becoming Commoditized Services was Warranty Services Interviews With the Experts (604)  Schneider Electric (2:06) Becoming Commoditized Services was Warranty Services Took mind set change Interviews With the Experts (604)  Schneider Electric (2:17) Becoming Commoditized Services was Warranty Services Took mind set change Not just fixing your own equipment Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (12:09) Big customer problem – shut down, discovers and creates other problems Internal parts were new Priced on value brought to customer Class 4 services strategy: 3-week refinery downtime to 0! Customers will start with “Price is #1” – In the end it is not! Not “Plug & Play” equipment, not standardized Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (11:05) Big customer problem – shut down, discovers and creates other problems Internal parts were new Priced on value brought to customer Class 4 services strategy: 3-week refinery downtime to 0! Customers will start with “Price is #1” – In the end it is not! Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (8:29) Big customer problem – shut down, discovers and creates other problems Internal parts were new Priced on value brought to customer Class 4 services strategy: 3-week refinery downtime to 0! Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (7:30) Big customer problem – shut down, discovers and creates other problems Internal parts were new Priced on value brought to customer Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (6:39) Big customer problem – shut down, discovers and creates other problems Internal parts were new Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (6:15) Big customer problem – shut down, discovers and creates other problems Interviews With the Experts (604.2)  Schneider Electric, U.S. Division.   (6:00) $1 Million+ Services Success Story, Beating Competitor's Product Sales With a Service:  Customer Problem:  When a 30 year old electric substation need replacement (e.g. 4,000 volt system for a refinery), competitors want to sell all new equipment, which creates three weeks+ of disruption and outages.  Schneider pioneered "in-place-refurbishment" for both its equipment and competitor's equipment, which resulted in near zero down time.  Ultimately was able to earn more profit than selling new equipment to customer because of extreme value customer placed on no outages.  (SL)* Interviews With the Experts (604.2)  Schneider Electric, U.S. Division.  (5:40) $1 Million+ Services Success Story, Beating Competitor's Product Sales With a Service:  Customer Problem:  When a 30 year old electric substation need replacement (e.g. 4,000 volt system for a refinery), competitors want to sell all new equipment, which creates three weeks+ of disruption and outages.  Interviews With the Experts (604.2)  Schneider Electric, U.S. Division.  (5:12) $1 Million+ Services Success Story, Beating Competitor's Product Sales With a Service:  Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.   (3:59) #1 was making services part of culture We were not going to get more people Incentive systems for services “Halo Effect” of new value to bring to customers Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.  (3:47) #1 was making services part of culture We were not going to get more people Incentive systems for services Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.   (3:27) #1 was making services part of culture We were not going to get more people Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.  (3:20) #1 was making services part of culture Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.  (3:08) Grew Services from $1.5 million to $9.75 million in 4 years at 32% Contribution Margin in 3 State Midwestern Region.  Accomplished with ZERO INCREMENTAL PEOPLE.  Total sales grew from $78 million to $120 million, demonstrating product sales gains that accompany effective services sales.  (SL)* Interviews With the Experts (604.1)  Schneider Electric, U.S. Division.  (2:55) Grew Services from $1.5 million to $9.75 million in 4 years at 32% Contribution Margin in 3 State Midwestern Region.  Accomplished with ZERO INCREMENTAL PEOPLE.  Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (20:09) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Used services to construct a credible competitive bid Resulted in minimum 30% increase in bids won Other guys will continue doing what they have always done Had 44,000 SKUs. Added technical services sales force Incentives: Sales always must get credit Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (19:34) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Used services to construct a credible competitive bid Resulted in minimum 30% increase in bids won Other guys will continue doing what they have always done Had 44,000 SKUs. Added technical services sales force Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (18:32) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Used services to construct a credible competitive bid Resulted in minimum 30% increase in bids won Other guys will continue doing what they have always done Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (14:45) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (14:12) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (14:05) End user customer VS purchasing guys Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (13:50) "How to Get Product Sales Guys to Sell Services":  See results achieved by (SC).   Key techniques:  (a)  "How to be two out of three bids."  Customers would always need three bids.  Make sure your bids included a competitive bid for new equipment and a bid for refurbishment services as a second, competitive bid.  This would leave one open bid slot for a competitor.  Regularly having two of three bid slots wins a lot of business.  (b)  "Do you want fries with that?"  It sounds trite, but rigor, training and demands on the sales force to sell services are, in part, this simple.  (c)  We must get beyond the "services is just the warranty group - a necessary evil" mentality".  (d)  We must make selling services formally evaluated as part of performance management and compensation.  (e)  We added a small dedicated technical services sales force to assist the product sales force in proposing and closing business.  (SL)* Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.   (13:40) "How to Get Product Sales Guys to Sell Services":  See results achieved by (SC).   Key techniques:  (a)  "How to be two out of three bids."  Customers would always need three bids.  Make sure your bids included a competitive bid for new equipment and a bid for refurbishment services as a second, competitive bid.  This would leave one open bid slot for a competitor.  Regularly having two of three bid slots wins a lot of business.  (b)  "Do you want fries with that?"  It sounds trite, but rigor, training and demands on the sales force to sell services are, in part, this simple.  (c)  We must get beyond the "services is just the warranty group - a necessary evil" mentality".  (d)  We must make selling services formally evaluated as part of performance management and compensation.  Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (13:30) "How to Get Product Sales Guys to Sell Services":  See results achieved by (SC).   Key techniques:  (a)  "How to be two out of three bids."  Customers would always need three bids.  Make sure your bids included a competitive bid for new equipment and a bid for refurbishment services as a second, competitive bid.  This would leave one open bid slot for a competitor.  Regularly having two of three bid slots wins a lot of business.  (b)  "Do you want fries with that?"  It sounds trite, but rigor, training and demands on the sales force to sell services are, in part, this simple.  (c)  We must get beyond the "services is just the warranty group - a necessary evil" mentality".  Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (13:20) "How to Get Product Sales Guys to Sell Services":  See results achieved by (SC).   Key techniques:  (a)  "How to be two out of three bids."  Customers would always need three bids.  Make sure your bids included a competitive bid for new equipment and a bid for refurbishment services as a second, competitive bid.  This would leave one open bid slot for a competitor.  Regularly having two of three bid slots wins a lot of business.  (b)  "Do you want fries with that?"  It sounds trite, but rigor, training and demands on the sales force to sell services are, in part, this simple.  Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (13:10) "How to Get Product Sales Guys to Sell Services":  See results achieved by (SC).   Key techniques:  (a)  "How to be two out of three bids."  Customers would always need three bids.  Make sure your bids included a competitive bid for new equipment and a bid for refurbishment services as a second, competitive bid.  This would leave one open bid slot for a competitor.  Regularly having two of three bid slots wins a lot of business.  Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (12:59) "How to Get Product Sales Guys to Sell Services":  See results achieved by (SC).   Interviews With the Experts (604.2)  Schneider Electric, U.S. Division (12:37) Big customer problem – shut down, discovers and creates other problems Internal parts were new Priced on value brought to customer Class 4 services strategy: 3-week refinery downtime to 0! Customers will start with “Price is #1” – In the end it is not! Not “Plug & Play” equipment, not standardized Offer became “No headaches for customer” Thanks for Joining Us – Some Details: (31:25) Names are disguised * “Summaries of complex, long term efforts… Intended to communicate principals and concepts… Estimates of benefits… May have been altered to protect confidentiality…” Remember to ask us for the rest of the story… For more Interviews with the Sales Experts, go to www.tomingraminc.com Contact Us at 972-394-5736 or tom@tomingraminc.com Interviews With the Experts Summary: (31:07) Place a high value on services Do not set up as isolated, stand-alone division Don’t give it away Interviews With the Experts Summary: (30:34) Place a high value on services Do not set up as isolated, stand-alone division Interviews With the Experts Summary: (30:05) Place a high value on services Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (28:42) Customer came to Schneider Schneider in an associated business Customer’s problem was huge capital outlay for new machine Schneider’s Solution: Services extended life of machine Customer and Schneider solved need together Resulted in huge “drag along” sales – became global, marquee account Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (27:46) Customer came to Schneider Schneider in an associated business Customer’s problem was huge capital outlay for new machine Schneider’s Solution: Services extended life of machine Customer and Schneider solved need together Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (27:25) Customer came to Schneider Schneider in an associated business Customer’s problem was huge capital outlay for new machine Schneider’s Solution: Services extended life of machine Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (25:45) Customer came to Schneider Schneider in an associated business Customer’s problem was huge capital outlay for new machine Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (25:35) Customer came to Schneider Schneider in an associated business Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (25:30) Customer came to Schneider Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (24:45) $1 Million+ Services Success Story, Beating Competitor's Product Sales With a Service:  Capitalized on Competitor's Tendency to Always Propose New Equipment.  Able to place a service engineer on-site with a major cigarette manufacturer for two years doing nothing but refurbishing the electrical portions of older, mechanically sound cigarette producing machines.  (SL)* Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (23:36) $1 Million+ Services Success Story, Beating Competitor's Product Sales With a Service:  Capitalized on Competitor's Tendency to Always Propose New Equipment.  Interviews With the Experts (604.4)  Schneider Electric, U.S. Division.  (23:10) $1 Million+ Services Success Story, Beating Competitor's Product Sales With a Service:  Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (21:45) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Used services to construct a credible competitive bid Resulted in minimum 30% increase in bids won Other guys will continue doing what they have always done Had 44,000 SKUs. Added technical services sales force Incentives: Sales always must get credit Don’t let sales guys abdicate and hand off services sale to service expert Performance Management of Sales Guys: 20-40% on services measures Interviews With the Experts (604.3)  Schneider Electric, U.S. Division.  (20:16) End user customer VS purchasing guys Purchasing guys will demand 3 bids, but no more Most competitors undifferentiated Used services to construct a credible competitive bid Resulted in minimum 30% increase in bids won Other guys will continue doing what they have always done Had 44,000 SKUs. Added technical services sales force Incentives: Sales always must get credit Don’t let sales guys abdicate and hand off services sale to service expert