Hey folks, Phil Zito here and welcome back. In this post, we are going to be discussing how to identify the true sales opportunity.
So, if you've ever walked onto a customer site, and you've seen 50,000 unacknowledged alarms, or you've seen a building automation system where the inputs and outputs are offline, or you've seen everything running in hand, you may think to yourself, “I can fix this. This is a perfect opportunity.” You go to the customer, and you say, “Mr./Mrs. Customer, I know what your problem is and I'm going to solve it. I'm going to get your points working again, I'm going to get your alarms manageable, I'm going to really do a retro commissioning on your building automation system, and your HVAC systems, and everything is going to be gravy, and you should pay me money to do this.” Then they look at you, and they say, “You know what? I could do XYZ with this money, and I just don't care.”
So, you feel a little defeated, and you’re thinking to yourself, surely, these folks should understand that, running all their air handlers in hand is a bad idea, running their central utility plant in hand is a bad. So, why aren't they fixing it? Why aren't they addressing this issue? Why is it still continuing, maybe after years and years and years of it running the way it's been running. This is where you have to uncover what I call the true sales opportunity.
We as building automation professionals are notorious for thinking that someone, just because they look like they're in a position of decision-making, can make decisions, or that the person we're talking with values what we value. The Chief Operating Officer or Chief Financial Officer of the university, who makes decisions on the allocation of funds to capital projects may have a completely different view of what's important than you. For example, if students haven't been complaining, and teachers haven't been complaining, even though they're wasting energy, they may not care about improving the mechanical systems or improving the control systems.
Now, let's do the inverse of this. Maybe they have a sustainability officer, and they have sustainability goals, and these goals are publicly reported out to people who are donating money to the university. All the sudden, they're not meeting these goals and maybe they're in California where folks like really, really care a lot about this. Then, these folks who are making donations to the university decide to not make donations anymore, because now this data around environmental friendliness and sustainability is not being reported out and the standards are not being met. That is an example of a true sales opportunity. That directly ties to impacts of funding for that university, that directly ties to people pulling their money out of that organization.
But would you get that from talking just to the facility manager or maybe talking to the lead technician? Probably not. Therein lies why I see a lot of building automation professionals really struggle with owner direct work. Our construction industry tends to lag about 18 months.
It's no mystery that we are going into a period where finances are probably going to get a little tight, construction projects are probably going to slow down. The beauty of things is that education sector is not going to slow down, healthcare is definitely not going to slow down, especially with the average age of the Americans increasing. So, there's going to be a lot of opportunities for those of us who want to work with the owner market.
However, it takes a shift because if you think that you're just simply going to go to the facility manager and sell a plan service agreement, or sell a retro commissioning study, you're going to find it difficult to get adoption, especially as budgets become a little tighter. So, here are the areas that I believe you can find true sales opportunities, and here's the multi-step process for identifying true sales opportunities.
What is the core business of the business you are serving?
The first thing we need to identify is, what is the core business of the business you are serving? So, what's the core business of a university? It's to educate students, correct? That's what you would think, but at the end of the day, it's to be able to fund the university. How do they fund the university? Yeah, they do fund that through educating students, but they fund that as well through endowments, through grants. There are all sorts of ways that funding hit universities.
When this mindset shift happened, when I started to think about it, the core business of a business is to make profit, unless it's a nonprofit. Then I started to realize that if I could identify how my services and my offerings could impact their ability to make money, could impact their ability to, in the case of a university, increase endowments, hit some sustainability goals that are regulated based on the state they're in, or open them up to potentially being able to receive funding, or increase the amount of student revenue and student satisfaction, then I would be able to tie my solution to that.
So, how do you do that? Well, we in building automation, we tend to focus in on the immediate issue. Yeah, your stuff is in hand? Yeah, your chilled water plant is not working? All these different things that are going on that we are thinking are top of mind to these financial decision makers, but they're not. So, we have to look at that. How can you find these things out? Well, if I Google, let’s say University of Arizona, because we live in Arizona, University of Arizona sustainability goals. I’ll go to their site and then I’ll go to the Office of Sustainability, and I look at their strategic plan for sustainability. As I start to dig into this, I see reduce energy and water, there is attain climate neutrality, reduce scope of greenhouse emissions. So, that doesn't necessarily make money. There are some endowments that will probably be tied to that, and people want to put their money where people are agreeing. I'm not saying I disagree with this, but if we're purely looking at what we can impact that is going to make money for this organization, reduce energy and water usage, right? That's going to be pretty important.
So, let's try to figure out what they are trying to do. Can we find their energy goals? If we can find their energy goals, then once we understand that, then we can tie to those goals, and we can look at that and say, “Okay, we're going to maybe help them implement load shedding.” Load is a significant concern here in the state of Arizona, in the state of California, where you need the ability to shed load.
Maybe we're looking to help them reduce demand and consumption. So, we look at these things, and these opportunities, and we say, you can reduce demand, you can reduce consumption, but is getting your chillers operating a demand and consumption reduction strategy? Absolutely, completely. Is that going to probably resonate with the facility manager? Maybe, if they have some tie to utility budget, but probably not. Is that going to ring true with maybe a Sustainability Officer, or the Chief Operating Officer, or the Chief Financial Officer? Yeah, probably will.
So, you might be thinking to yourself, all right, but Phil, how do I even have these conversations? Well, this is where you start to look into things like their fiscal budgeting. You start to look into their operational budgeting and their capital budgeting. You start to really understand your customer on a deeper level. Now, I do agree that this takes a longer process, and if you're a salesperson who has no pipeline, and is way behind the eight ball, then I encourage you to refer back to some of our older posts on sales, as well as to check out our building automation sales training, because you can only really start to work on the strategic stuff.
When you've handled your immediate needs to have a complete pipeline, and to have a complete book of business, that's going to carry you through the longer sales cycle that is these more capital and operational influencing sales processes.
Alright, so first things first, we identify the true sales opportunity. How do we identify that true sales opportunity? We identify some goals that align with what this customer is doing. In the case of University of Arizona, maybe we look at sustainability. In the case of maybe a large pharmaceutical, maybe we're looking at the maintenance of their environment, so that they can properly execute their pharmaceutical tests.
A lot of folks don't realize this, but in the automotive and pharmaceutical worlds, they run multiyear tests. In pharmaceutical, they may run a multiyear test on a drug. In the automotive, they may run a multiyear test on a motor. If the environment varies by a significant portion, they may have to rerun that test, and so that can cost a lot of money. So, maintaining the conditions of the environment has a direct financial impact. So, we have to identify that true sales opportunity, which is, what is going to most affect their core business?
Alright, once we've identified that true sales opportunity, now it's about penetrating the account and working to the stakeholders of that true sales opportunity. I'm reminded of a client of ours that we worked with that was expanding multiple facilities. They were standardizing on a building automation system., and they really had a challenge with the fact that their operational staff, each one understood their building and their building automation system type, but there was no standardization. One person could not go from Facility A and go work at Facility B. So, we came up with a naming scheme, we came up with a standard sequences, we came up with standard graphics, all these things.
Now we're not a contractor. We don't implement any of this, but what we do for our customers as a consultancy is help them create processes. A lot of folks associate us with training. We also have created processes for organizations so that they can optimize their staff performance. We are ultimately a Workforce and Talent Management Development Company. We act as an outsourced talent development, talent management, and workforce development organization. So, we come alongside organizations and help them discover what issues they have with their talent, discover what issues they have within their organization from a talent management perspective, and we help them close those gaps. Training is one of the ways we do that.
The sales opportunity with this customer, the way a lot of contractors looked at it was, I just want to go and sell them a control system. Whereas the actual opportunity was going and standardizing and creating standard processes to reduce their operational expenditures. That's a completely different conversation. It's a completely different presentation. Rather than saying, “Yeah, you've got these six buildings and we're going to replace your head end with this, and here's our phased approach to replacing your controllers.” Versus, “Yes, you've got these six buildings and we realize you're going to do a replacement of the control system, which we will help you with, but we also understand that your deeper problem is that you struggle to afford new staff. The staff you do have knows multiple different systems, and you need to get them standardized, so that they can walk into any building and understand how to operate it, thus reducing your dependency on contractors and reducing your cost.
So, that is identifying that true sales opportunity. Ultimately, if you could properly position that to the customer, you can actually end up in a situation where you then are able to kind of differentiate yourself from the competition, and better position yourself to win the opportunity.
At this point, we've identified what the true sales opportunity is, and we do this through questioning. When we ask questions, we try to understand from multiple different angles, what does the ideal situation look like. We also realize that a lot of people don't know what the ideal situation looks like. A lot of executives at organizations are disconnected from their field organization, and because of that, they really don't know what is going on out in the field organization. That makes it challenging for them to be able to identify that they even have a pain point.
So how do you deal with that? Well, the first way you deal with that is you try to find the data metric behind this. Maybe that metric is, what is the average cost spent with contractors on service calls. What is the average amount of equipment replacement? What is your average demand, or consumption, per square foot compared to other vertical markets?
Once you're able to put some metrics and some data, then you're able to assess if there is a problem. Once you have that data, you're able to put a dollar value to that problem. So, if you realize that the average hospital spends $10 per square foot on maintenance a year, for example’s sake. A million square foot hospital spends $10 million on maintenance. You realize that your hospital spends $20 million on maintenance a year; there is a $10 million delta. Now, we've identified a metric, and it is your job as a sales professional to figure out why that metric has a delta.
What about this hospital costs $10 million more? Do they just simply have poor negotiating with procurement? Usually that's not the case. Do they have aged equipment? Maybe so and then easy way to do that is to try to look at their O&M’s, if they have any, and figure out when the last major mechanical installation or retrofit happened. If they're still running pneumatics, and the last mechanical retrofit was 30 years ago, then maybe their maintenance costs are coming from degraded equipment that is starting to die.
You can also look at their processes. This is a really interesting side note, one that happened at a hospital I worked with where we put in a maintenance management solution. Part of the maintenance management solution was actually tied to the access control system. Vendors were given badges when they were on site, and they would badge in and badge out. They actually tracked the vendor badge in and badge out times and compare those to the charges from those vendors. Wouldn’t you know, there were some vendors that were charging significantly more hours than their people were actually on site. So, these are things that, you know, maybe at a small office building, not a big deal, but at a healthcare campus, you know, million to 2 million square foot campus, or at a university campus, this can actually start to become quite a big deal. You can start to identify some pretty large labor slippage, some costs that you weren't anticipating. This is where, as a sales professional, you help the organization identify these things. Then, as a sales professional, you create a solution for these issues. Then also, as a sales professional, you find a methodology to fund.
I'm not someone who believes that there's always a way, sometimes there's not a way. In a lot of cases, if a customer tells you they don't have money, and they do truly have a problem, especially if this problem is tied to energy, or they are a public organization, you can often find funding. So, if it's tied to energy, you can often work with the utility providers to find funding, or you can work some sort of financing energy savings contract. If it's tied to asset condition, and it is K-12, or it's some sort of public entity, you can usually work the funds through bonds, or you can work the funds through some form of private finance. There are ways to find funding.
Before you go down that path, you need to make sure that the customer is actually really serious about solving this problem. There's nothing worse than sinking hours into helping to find funding sources, only to find out that the customer is never serious, and they're not going to do anything. Like I said, if this is a problem that is directly impacting their business, they should be serious about this.
I find in this case, that actually, governmental organizations tend to be easier to work through than private entities, in a lot of ways, when it comes to these scenarios. Private entities have a board. I tend to find governmental organizations have policies that are dictated down to them and standards that are dictated down to them, like if it's a GSA or DOD or State Gov, they tend to have sustainability, energy, all these things dictated down to them. They tend to have access to funding sources that most private organizations don't, so your ability to work with them and tie directly to a requirement is usually easier.
Now this is changing with things like in California with Title 24, New York and their push to electrify everything. You are seeing private organizations having to adhere to standards. So, do be aware that that exists as well. Private organizations I tend to find can be more fickle, because especially if they're publicly traded, depending on how their performance is, if they're short-sighted and they're just chasing their quarterly numbers, then they can quickly cut their budget to whatever operational changes you're looking to make.
Now, I know this was very theoretical, but my plan over the next several blogs is to come at you with some case studies and some examples, as well as interviewing some sales professionals who are doing these exact things so that we can demonstrate to you. That being said, if you have any specific examples that you would like to share, please let us know in the comment section.
Thanks so much for being here. Take care.
