The Human Search Engine, Google Numbers and things to think about before throwing big bucks down a cyber rat hole
Make no mistake, customers are thinking and behaving differently today than just a couple years ago. When I was a rookie sales guy, the primary source of product information for my customers was their favorite salesperson. Introducing customers to new products, providing catalogs for additional product data searches and demonstrations of new features (and benefits) of existing products was job one. Early on, I discovered the salesperson who provided the best and most valuable information held a position of grace and favor.
Once I worked my way into the favored spot, I became the trusted “human search engine” used to find solutions and new products. Here’s how it went. The customer described their problem, I took notes, drew pictures and scurried off to research a list of possible solutions. A week or two later, I returned with a few catalog data sheets, a dozen or so pictures and we refined the “search” and the process was repeated.
Today, our friends at Google provide the same service only quicker and better. The customer determines their problem and they can search the globe for potential solutions in a matter of milliseconds. If they don’t like the information served up, they simply refine their search. Instead of a few catalog sheets, they can review information, read feedback from other customers and find detailed video clips of the potential trouble spots of the application.
Are salespeople still needed? You bet. But salespeople are now needed in a different capacity, meaning less frequently and no longer tied to product centric solutions.
Google Search Numbers tell the Story
While much of this information has been rattling around in my mind for the past few years, only recently did I come to the realization of the depth and breadth of the situation. Recently, I had the opportunity to sit with an expert on Google and the back-side resources available. Using the data provided via Google Ads, formerly known as AdWords, the advertising component of Google, we did a search for automation related words searched by Google users; our customers. Entering some of the most commonly used terms by automation professionals, buzz words like PLC, VFD, Servo Drive, Proximity Sensor and a dozen more, we discovered there were 12,000+ searches per day: just in the State of Ohio!
That’s a whole lot of searching going on every day (in one state). Google doesn’t take weekends, holidays or vacation time, so the numbers on a business day are probably higher. Thinking more, it seems like way more product information than could possibly be provided by every sales guy living there in a day; even if they were driving company helicopters.
There is a Selling Information Gap
Let’s do a little analysis and toss out a few numbers. Based on my knowledge of the market, I would conservatively (over) estimate, there are 400 salespeople working in automation in Ohio. The typical salesperson averages three calls per day (another over estimate). Doing the math, there are 1,200 opportunities for a “real-live salesperson” to provide information to customers.
This means less than 10 percent of the information provided to customers comes via the traditional method. The other 90 percent is handled via Google searches over the internet.
What are our Customers doing Online?
Since we are all grown-up sales types here, let’s toss out a few ideas as to what these folks in Ohio (or any other state) might be doing.
1. Collecting automation product pictures - While there are people who collect pictures of well-designed cars, beautiful boats and cutting edge aircraft as a hobby, we can mostly rule out the collection of shiny automation eye candy.
2. Researching our industry as a potential career path - It is conceivable there may be a few youngsters looking at automation as a potential target of their life’s work. Robotics (which wasn’t one of the search words used) draws a lot of attention, so there may have been a few teens involved in things like the FIRST Robotics Competition. Robots are cool, but one can only wonder about VFDs.
3. Some Purchasing Agent searching for bargain basement prices – Yeah, it happens. Their search for low prices to use against value providing suppliers is never ending.
4. Existing customers searching for installation procedures – A lot of manufacturer’s have discontinued the practice of putting installation and data sheets in the box with their products. So a few people may be double checking their installation procedures.
5. Existing customers researching new products – These people buy from your company on a regular basis and often turn to salespeople for product information, but they are busy. Distributor websites typically do not carry good product information. Instead, the websites include links to major suppliers and once on the supplier’s site, a whole new set of searches must be completed. The customer sees this as a waste of time so they “Google” the information on their own. This by-passes the distributor completely.
6. Potential customers researching products – The story is pretty much the same as in the description above, except you don’t know these people. What’s worse, they don’t know you.
What happens next?
The “what happens next” part seems to be the million-dollar question. Reviewing the list, one might surmise distributors benefiting from numbers 4-6 on the list above. For example, in number four (4) above, an existing customer searching for installation data may discover the need for a mounting bracket and, since the cost is minimal, simply place the order. Pushing the envelope further, in number five (5) an existing customer researching a new product will no doubt be exposed to other suppliers. What happens if they see and like something you don’t carry? Not a happy ending.
Potential customers discovering you as a supplier is a topic unto itself. While I sincerely doubt the average knowledge-based, solution focused distributor will double their size in the next five years based on this kind of business, new customers are hard to find. Distributors constantly complain their salespeople aren’t prospecting enough (or prospecting at all). But, new customers are important.
E-commerce is more than just throwing catalog numbers into a web-store
In E-commerce, content is king. To be successful, a distributor needs more than just content. Quality is key! A catalog number with a 25 character description, in down home, Iowa vernacular, “ain’t gonna cut it.” Sadly, the first attempts at distributor webstores where just that – catalog numbers with highly abbreviated descriptions. For the most part, manufacturers are not in a position to help much.
Quality content comes with a price. We have had conversations with distributors in this narrow segment (Automation) who have already invested a half-million bucks on content. A few report spending even more. The cost issue alone puts it outside the realm of most organizations. Further, the cost is never ending. Each year our supply partners introduce new products, creating the need for new content. The same holds true for revisions to existing products. So the investment in content requires continual re-investment.
There’s even more to the picture. Ralph Waldo Emerson reportedly said, “Build a better mousetrap and the world will beat a path to your door.” Ralph was a poet: however, not a business man. You might build the coolest content on the planet but customers have to find you. Further, the site has to compare with the global giants (Amazon, Grainger and others) in speed, ease of use and general customer experience to be credible.
A new model is emerging
While this isn’t a commercial for a particular company, I would like to use a client of mine as an example. KYKLO is a global company based in Thailand. Their business model is a subscription service that gets distributors high quality content, SEO optimization and a world class webstore. Distributors who sign up with them pay a flat fee and their customized cloud-based webstore integrates with both the distributor’s website and ERP system.
Why I like the model
• The cost of content and maintaining the content is spread over the whole of KYKLO’s subscriber base. This lowers the cost for each participating distributor.
• The subscription price means it’s not a sunk cost. Invest 250,000 dollars on a specially designed website and you are stuck with the cost regardless of what new innovation takes place on the web. Innovation is a never ending thing.
• The temptation to not maintain your website during times of economic downturn is removed. Remember earlier comments on the need for constant maintenance? I believe you need better technologies during recessions. Further, distributors have the tendency to think of internet based expenses as a one-time deal. There are dozens, perhaps hundreds, of five year old distributor websites. These websites were outstanding when new. Fast forward to today-- they are beyond obsolete.
• KYKLO must develop and refine their service each year or the distributor can simply pull the plug and move to something else. Further, the CEO of the company readily admits, they will face competition in the future. Competition is good for users of services like these.
In my mind, for automation distributors, this is the single best opportunity for distributors in the automation and electrical space. I suspect similar models will develop in the fluid power, power transmission, industrial supplies and other lines of trade. Perhaps it will be KYKLO pushing in a lateral direction or maybe it will be some other group of young entrepreneurs. But, today in automation KYKLO is the leader.
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