Sales Rampage – The Mistake of Selling Products that Don’t Exist

It seems obvious that you shouldn’t sell products that you don’t make (as an original equipment manufacturer). And, to be clear, I don’t mean products that you’ve developed through partnerships or complimentary equipment.

At a previous job I worked as the lead motion control engineer for a company that sold capital equipment valued in excess of $10 million per sale. However, when the market slowed in 2008, and sales for the equipment dried up, the sales force didn’t tap new markets or develop existing customers and the company certainly didn’t attempt any drastic changes. Instead, the sales force began selling products that were entirely un-engineered. Of course, to the sales department (and perhaps top executives) they were heroes. They had taken a dead market and drummed up sales where the perception was that there weren’t any.

The problem was that the company hadn’t gone through the proper research and development phases for these new products and the specifications were generated through innuendo and rumor. Engineering milestones were set by delivery dates and contract time-lines. Truthfully, some of our quoted engineering hours would’ve placed the end of the beta long past the full-production date.

I’m wondering if you can guess what happened?

Well, of course we had unsatisfied customers. We were losing money to missed contract dates. We had customers threatening to completely remove our machinery and follow-up with lawsuits. I find it hard to believe that we made a penny on any of that equipment and it seems likely that we lost of a lot of possible repeat business.

So, was it engineering’s fault for not getting the product done in time or for it not being reliable?

That’s what upper management would have you believe. In their mind, it was an engineering problem not a sales problem. As such, they’re likely to repeat the same mistake again. If your modi operandi is to sell things for a loss and to lose customers your company is not long for the world. Even more so in the age of the internet.

I can hear upper management now: “We needed to bring in work, we needed the money.” And, truth be told, I can sympathize with that position, and in reality, it’s probably much less ridiculous than I’m making it sound. But, when you get to the bottom line I’m not sure what kind of strategy was at work

“We’ll lose a little on every sale, but we’ll make it up in volume.”

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Comments
One Response to “Sales Rampage – The Mistake of Selling Products that Don’t Exist”
  1. I can appreciate where you’re coming from. I’ve seen this happen and it’s ugly. The economy has forced companies to become more creative which is actually a good thing. Selling the invisible is not.

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