Steve Flagg is the CEO and founder of Supplyframe.
Semiconductor and electronic component suppliers help power the devices and networks that keep us all connected. Their technology is the foundation on which digital transformation is built. Yet, if you look at the way these suppliers operate, many of them are digital laggards.
Many electronic component suppliers and distributors continue to take an old-school approach to marketing and sales. They rely on relationships with engineers at client companies and focus on customers who have spent the most with them in the past. Many of the insights into the customer’s design cycle are garnered through one-to-one conversations between sales and customer engineers.
In today’s increasingly digital and self-service world, where many buyers make decisions using online resources and Covid-19 has more people working from home, this no longer works and doesn’t allow for scale.
Understand That Behaviors Have Changed
The pandemic has limited opportunities for suppliers and distributors to connect with customers. Many customers no longer accept in-person meetings in their offices, and the ability to take the pulse of customers at trade shows has disappeared.
Engineers have always been independent. They and others who influence product design often do research instead of contacting a salesperson. They prefer knowledge and information at their fingertips, allowing them to research, select and buy quickly and get their product to market faster. That information gathering often occurs until it’s too late for suppliers to influence their customer’s design decision making.
If suppliers and distributors are not tracking where digital engagement is happening in the ecosystem, they are flying blind because engineers and other product design influencers don’t necessarily go to supplier and distributor websites to do their research. Reliance on digital footprints from their websites may be insufficient to paint the entire picture into the full opportunity.
As McKinsey & Company notes, Covid-19 “accelerated the shift to digital. But the best companies are going further, by enhancing and expanding their digital channels. They’re successfully using advanced analytics to combine new sources of data with their own insights to make better and faster decisions and strengthen their links to customers.”
Rethink The Design-To-Purchase Journey
Sales and marketing leaders at semiconductor and electronics components suppliers and distributors can learn from what has happened in the broader B2B sales and marketing arena. That experience has illustrated that managing the funnel by creating early awareness, building engagement, moving to conversion and then measuring marketing qualified leads no longer makes sense.
It doesn’t work because engineers and buyers often don’t engage directly with suppliers. Instead, they access information about products online via other information aggregators and social channels. In this environment, identifying one digital point of engagement and converting to a “lead” often loses the context of the broader customer design cycle and potential opportunities related to that project. What’s important is account-based intelligence, which starts with understanding that an aggregate — like multiple engineers at one account — is searching for and engaging with syndicated content over time. These patterns, when viewed in context, provide a new form of intelligence.
As suppliers chase the next technology cycle or new product design phase, they need to find engineers where they are evaluating and validating new design information. Suppliers should be looking across vertical search services like Datasheet Archive and FindChips, component libraries within CAD environments, and tools that convert parts information into 2D and 3D models. This can provide actionable insights into what products and technology engineers need as they work on new designs.
Grab The Long Tail
Even if suppliers get early insights about engineering intent, few perform tiered account segmentation. Sales teams typically operate under the 80-20 principle, which suggests that 80% of their business comes from just 20% of customers. Thus, they may ignore lower-tier and mass-market accounts.
This is a mistake because engineers at the lower-tier accounts might be working on the next big scale-out product. As a supplier, you’ll want to be involved early in the key designs of promising high-tech startups so you’re in a prime position as these businesses begin to scale. Just look at what happened at Fitbit and Nest.
Continue to treat your large accounts with care, but rethink the 80-20 rule, and look at how to scale meaningful engagement and rebalance your sales force. Align your sales teams so you can move on the accounts with the highest potential — not just those with the largest current revenue. By tracking digital engagement, including aggregate account-level behaviors, you can act on what’s happening now and what is likely to occur in the future, rather than basing your structure and strategy on old data like procurement history.
Modernize Your Website To Address Engineer And Buyer Needs
Some semiconductor and electronics component suppliers haven’t updated their websites in a decade. They have counted on trade shows to influence business. Those events have gone away, but companies can engage and influence customers by using their websites in new ways.
Design engineers are always looking to speed up design and get to market faster while maintaining quality and reliability. Tools are now available that enable product design influencers to click on an icon next to a part, get a 2D or 3D model of that part, and immediately place the component into their CAD environment. This is valuable because it normally takes an engineer around 48 hours to create such a model from a data sheet or spec.
This is also valuable to suppliers and distributors because it signals what products engineers are selecting and when. This provides suppliers with anonymized and aggregated insights about when design cycles are occurring. Suppliers also can gain account-based intelligence about what parts engineers leave in shopping carts while validating products.
Today, improved digital engagement with global manufacturing customers requires design cycle intelligence. This hinges on getting visibility into online behaviors that signal customer intent. With design-to-source visibility, you can be ready with the right information and meaningful engagement at the right time. This approach can lead to better account penetration, greater profitability and significant competitive advantage.
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