Lessons from Eleven Years in the Business – Honesty is Key

 

 

Contributed by Brad Sawyer, Business Development Manager

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Lessons from Eleven Years in the Business – Honesty is Key

H+M Industrial EPC Honesty is Key

I have learned a variety of lessons after 11 years of business development in the Houston Petrochemical industry. Some things were learned the easy way and some…the hard way.  Below are a few of the things that I have learned since I started, things I’m still learning, and why they have helped me.

Relationships Matter

The first thing I learned was that relationships play a bigger role than any text book or professional sales expert would like to admit.  You can learn all of the tricks on professional selling but at the end of the day people will be more likely to give you an opportunity if they like you, assuming you have a competitive product to offer that is.  As human beings, we all act on emotion to some extent. Yes, this includes the decision makers we target.  My mentor told me when I first started in this business that “if people like you, they will find a way to give you an opportunity”.

My main/only objective in my first meeting with a new customer is to get a second meeting. Developing business in this industry is very slow moving and mostly reluctant to change, and most decision makers won’t give you an opportunity on the first visit anyways.  You have no chance of ever doing business with someone if they won’t meet or talk with you.  The whole objective of the first meeting, and every meeting after that, is to be able to have this particular customer meet with you the next time you reach out to them.  Customers will continue to meet with you if they feel comfortable with you. They get comfortable when you develop a personal relationship with them.  Starting out the relationship with a heavy sales pitch can oftentimes make a meeting awkward, therefore making it very difficult to get another meeting.  I feel that as long as customers agree to keep meeting with you, they intend to eventually give you a chance at earning their business.  As soon as they stop meeting with you, the odds of a future opportunity decrease significantly.

You Can’t Know It All

Another lesson I feel I have learned through the years is to never act like you know the answer when you don’t.  People in this business are smart. They probably know more about their needs, and what you’re selling, than you do.  If you come across as a technical expert on your product, your customer will view you as their resource for your product.  If you don’t truly know what you are talking about, then it will be a bad reflection on your company’s product.

Always be comfortable saying when you don’t know an answer. If you don’t know what you’re talking about, your customers will either know or they will eventually find out.  This is a very technical industry and no one knows everything, so it’s alright to say you don’t know and you will get back to them with the correct answer or introduce someone else that is an expert.  I think it’s a huge red flag when a sales person pretends to have the answer when they don’t, as it shows they might be willing to offer the wrong product or service to the customer.  Also be prepared to say when you are wrong or have made a mistake. This will show that you recognized what you did and will be willing to fix it going forward.

Honesty is Key

To summarize the two lessons above, you will find success in sales and business development if you are an honest person.  This is a mostly conservative industry and the people remain employed at the same company for long periods of time, and they don’t forget.  If you come across as a pushy sales person that is an expert on everything petrochem related, you most likely won’t be the person that customers build relationships with.  A lot of times our customers work long hours and when they get away for lunch they don’t want to keep talking about work. They want to talk about something fun (i.e. football or hunting).  If you try to push your product too hard right from the get go, all you’re doing is hurting your chances for the next meeting.

Just like almost any career or profession, if you work hard, stay honest, and enjoy yourself, anyone can be successful in a business development role.

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BradSawyer

Brad Sawyer – Business Development Manager at H+M Industrial EPC

B.S. in Industrial Distribution Engineering

Brad has more than 10 years of business development experience in the heavy industrial markets including Petrochem, Refining, Power, Mid-stream, and Terminals. His responsibilities include managing the Business Development and Marketing divisions at H+M. Industry experience includes capital projects, turn-arounds, outages, and maintenance along the Texas Gulf coast region.

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Increase ROI by awarding projects based on VALUE instead of just PRICE

 

 

Contributed by Brad Sawyer, Business Development Manager

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Increase ROI by awarding projects based on VALUE instead of just PRICE

Value vs Price H+M Industrial EPC

“Value” is defined as the monetary worth of goods or services, and “price” is simply a number on the tag. This is especially true in the petro-chemical industry where capital project services are custom and not likely to be repetitive.  This situation makes it challenging to determine the difference between value and price, and the breakeven point as to which is the best option.

Let’s take a look at engineering and design services:  By choosing the least expensive option when selecting an engineering/design contractor, a company will no doubt save money at the start of their project.  However, when the design package is completed and issued for bids to construction companies, the possible mistakes could prove far more costly than the high quality, more expensive engineering package.  This is obviously not to say that expensive = quality, only that it must be ensured that the necessary deliverables are provided accurately to have a successful project.

Usually, construction costs and process equipment are the most expensive parts of a project. This makes it important to invest in your project early to get it started out on the right track. If it’s not, change orders from construction will add to the job cost and the schedule will be compromised.  So if you look back at the 10 % “cost savings” achieved by going with the cheapest option, what did you really save?

A company must look at the total value over the lifetime of the project, not just the price. It is increasingly important to make sure the benefits outweigh the cost and provide the desired return on investment. The cost side of the equation includes things such as project bid cost, cost due to change orders, maintenance costs, and ongoing operating costs. ROI considerations include income from operations, income as a result of increased efficiencies, and additional income due to quick startup.

A simple example of value integration is EPC companies who have a dedicated civil/structural engineering department to work alongside construction. When dealing with a civil construction job that you did not engineer, you will no doubt end up scratching your head with questions like “why do we need this much concrete?” or “is this much steel really necessary?” In order to reduce engineering/design costs to become the low cost provider, many civil/structural engineering companies just throw in huge amounts of concrete or way too many supports just to reduce the engineering hours. So by reducing their engineering “cost”, you’re now paying for it on the construction side…and we all know how expensive concrete and steel can be.

A perfect example of this recently happened to us, H+M Industrial EPC, on a very large civil/structural construction only project.  After looking over the drawings, the H+M construction team noticed it was significantly over-engineered.  Our customer allowed us to re-engineer it, stamp it, and bid on the construction as it was then designed.  In the end, we were awarded the project, re-engineered it, stamped it, and constructed the whole project for way cheaper than the competitor with the original bid.  Now our customer has a better product for a better price, and recognizes the value in starting their project off right.

Determining value requires more than just following a formula. It changes for each job, company and industry. You must use your past experience to determine what is truly valuable to stakeholders. Do not always look for the low cost provider. Look for companies who are confident in their designs and create them with constructability in mind and the intent of bidding and being awarded the construction.  Doing so, you are increasing your chance of getting a good package that leaves little room for change orders. Look for someone who plans on being around when the project is completed, is eager to form a mutually beneficial relationship, and proud to put their name on your project.

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BradSawyer

Brad Sawyer – Business Development Manager at H+M Industrial EPC

B.S. in Industrial Distribution Engineering

Brad has more than 10 years of business development experience in the heavy industrial markets including Petrochem, Refining, Power, Mid-stream, and Terminals. His responsibilities include managing the Business Development and Marketing divisions at H+M. Industry experience includes capital projects, turn-arounds, outages, and maintenance along the Texas Gulf coast region.

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