Teaming with Sales

“Our field force is our life,” emphasizes Jim Scott, vice president for corporate sales at Nalco Chemical Company. A simple glance at Nalco’s employee records shows he is not exaggerating. Of the chemical company’s 7,000 employees, half are in sales and marketing, and fully 2,500 are field salespeople. Not only are they numerous, they are also very well-trained. Most are chemists and engineers in addition to being salespeople. For they are not just selling a product — in Nalco’s case, chemicals for water treatment and other industrial processes — they must also sell themselves as experts on their customers’ businesses and manufacturing methods.

“Our customers are buying applied technologies along with the chemicals,” as Scott puts it. Peter Gaddie, who manages three of Nalco’s corporate accounts, agrees: “Nalco reps have to be on-site consultants to the customer.”

This emphasis on intense technical collaboration between salespeople and customers has been a constant since Nalco’s founding some 40 years ago. But the methods of ensuring collaboration have changed dramatically. Scott, who has been with Nalco since 1963, is well-placed to trace the changes in selling high-value services along with a product.

Team Selling “What’s changed the most is that buying decisions used to be made on site,” Scott says. “Now corporate staff or teams decide on business relationships.”

Scott heads part of a 32-person staff of very experienced salespeople who guide and coordinate a much larger force of field reps for Nalco’s top customers. The changes in Scott’s role have been dramatic: “My primary job is to build relationships with corporate levels to know which way the customer is moving. Plus, we have to know who to talk to at each site.”

The changes rippled quickly through Nalco’s markets in the last several years. “A lot of it started in chemicals several years ago,” Scott says. “Then it happened in paper and refining, and then in our middle markets like food and beverages.”

Technologies and techniques differ widely among these industries, but the overall lesson is the same. “The customer’s decision-making process is more team-like. So we’d better have a team on our side.”

Peter Gaddie, who handles pulp and paper customers, sees the changes up close every day. “Supply management is now quality-driven, and the customer wants to reduce his base of suppliers. Personal agendas at customer sites are blurred into a team agenda. If a team buys, a team must sell.”

Generally, a customer’s purchasing team includes the vice president of operations or his staff, the customer’s purchasing director and engineering reps from individual plants. Nalco’s selling team includes an account executive to facilitate negotiations, sales managers, general managers, marketing managers and district sales representatives.

That is a pretty full deck. But Nalco is lucky in one respect. It can omit technical support staff on its selling teams because its field reps are themselves engineers or technical consultants specializing in the customer’s business.

Change is Good Scott and his corporate account staff must keep these teams focused. His biggest challenges are keeping priorities straight, keeping the team focused on Nalco’s objectives, and — of course — finding the time to do it all well.

Team selling is not as simple as it appears, even when you land the business. “In corporate sourcing, when they say alliance or partnership, they are really looking for a big discount,” Scott notes. He has seen this phenomenon take hold among his refining customers: “The companies are really trying to cut costs now, so they are bargain hunting.”

Scott has to remind his teams that “our challenge is not to sell by discount.” Instead, Nalco wants to help each customer lower its total cost of operations by offering value-added services and performance.

Peter Gaddie emphasizes this strategy to his pulp and paper customers. “We’re not a chemical company, we sell service and expertise. In short, we sell programs not products.”

This approach is valuable only to customers that need — and know they need — Nalco’s technical services. “They have to have dynamic production systems that require constant change,” Gaddie says. “Then we can say, if you are worried about technical problems, we won’t just solve the problems, we will prevent them.”

Differentiating its services from those of its competitors is also crucial to Nalco’s financial success. Although it supplies about one quarter of the water-treatment chemicals sold in the U.S., the market is often very competitive on price. Nalco seeks a return on equity of 20 percent, an almost impossible goal for a pure price cutter. However, by selling high-value services along with its products, the company has consistently earned more than a 20 percent return on equity in the last decade.

International Approach Using time well is a critical skill for both Scott and his executive sales managers. Peter Gaddie has one customer with a dozen manufacturing sites in North America and another with 18 U.S. sites, 10 plants in Latin America and about 20 facilities in Europe. His third pulp and paper customer is a “target” account that Nalco has not deeply penetrated yet.

Both the existing customers impose “fairly heavy administrative burdens,” Gaddie admits. “It takes a lot of time with the technical and administrative staff of the customer at corporate level.” He estimates he spends about 50 percent of his time working with these major customers at the corporate level.

He spends the other half of his time working and traveling with local sales reps on plant-specific problems. Gaddie’s goal is to visit each customer site at least once a year. He has some help across the Atlantic. Nalco has a European division and “the European guy does most of the legwork over there.”

This kind of local delegation of responsibility is one of Gaddie’s critical time-management skills. Nalco has a quarter of the U.S. market for its products, but less than 10 percent of a world market that is still highly fragmented by regional suppliers. Foreign sales now total 45 percent of Nalco revenue. Nalco is aiming for over 50 percent.

There is one other major company that can compete with Nalco’s global approach of offering single-point sourcing around the world, according to Nalco spokesman Paul Cholette. Nalco must get there first, therefore, and do it better.

So the final responsibility for a multinational customer remains with executives like Peter Gaddie. “We still have to get the left hand to talk to the right hand,” he says. “If we’ve given the customer any special commercial terms, I have to see they are fulfilled. And that goes for all our corporate commitments to the customer.”

Setting priorities and sticking with them are essential for both Scott and Gaddie. And both senior sales executives emphasize the importance of learning to exploit the latest communications tools. “Phone-mail, e-mail, and faxes have made possible major improvements in selling,” Scott says. “Our challenge is to use these tools effectively.”

The Right Prospects Nalco and especially its corporate sales division do their prospecting carefully. “We are a little more selective in picking our strategic accounts,” Scott says. “There are some companies we are not going to match up with. We can’t be all things to all people.”

Gaddie emphasizes the reason for selectivity. Nalco sells high-value services along with chemicals. “We want the type of customer that needs us for that,” he says.

Scott lets the field reps check out prospects first. “Each rep has a territory; he is supposed to know the plants in the territory and call on them.” The incentive is also there: “The rep’s success is based on overall sales growth, so he has to sell new business as well as hang on to current customers.”

Scott or one of his staff steps in when they are needed. “My cold calls are dictated by the field force. If they have difficulty getting in to someone in a corporate office, they will say, ‘Can you guys come in? They don’t know us. I need someone to tell them about us.'”

Scott then does what he did many times as a field rep, only now at the top corporate level. “You still have to make the cold calls,” he summarizes.

His aim is to bring in the big ones for steady business, and it is working. “Now we have more customers that are multinational accounts. They are looking for a business relationship. They may not single-source, but they are looking to pick up a few world-class suppliers to choose from.”

Tougher Training None of the top-level sales techniques would work, however, if Nalco did not deliver what it promises: salespeople who can advise customers as well as close deals. Nalco’s education and training standards have always been high, and they have gotten even higher in recent years.

Nalco seeks its entry-level field reps from chemistry and engineering graduates. The minimum qualification is a college degree with two years of chemistry. “That has been a standard over the years,” Scott says. “Now we are even more selective in terms of education.” Nalco often gets recruits with masters degrees in business administration along with technical credentials.

Nalco has been able to raise its entry hurdles a bit because the supply of graduates is improving. “What has changed a lot is that graduates are much better prepared, at least out of some schools,” Scott notes. “The graduates of quality schools are doing a better job at communication. They can do not just the technical part, but they can do better presentations.”

Presentation and a professional demeanor are critical. “Our customers are reluctant to have faith in young folks,” Scott emphasizes. “They would rather have a seasoned vet.”

So Nalco must “season” its recruits quickly and intensely. Scott believes his company has “the best technical sales training that exists in water treatment.” New reps spend up to 18 months getting textbook training and traveling with senior salespeople before they are assigned their own accounts.

“New hires have frequent district meetings to talk technology,” Scott says. “Then, each quarter, they have a three-day meeting that is half technical and half sales.” Depending on the rep’s prior experience and the customer industry, after 9 to 18 months the rep will return to Nalco headquarters for a two-week training session. The session covers sales and the research resources available in each industry.

Training continues throughout a sales rep’s career. Water treatment differs not just by industry, but sometimes by region. “Our salespeople have to have expertise in the processes used by our Pacific Rim and European customers, as well as our North American customers,” Scott says. “The only way to get that is on site.”

Scott is confident that Nalco’s reps are maintaining their edge at this demanding challenge of acquiring in-depth technical expertise. And they are conveying this knowledge to customers. His only caution is a common one from a veteran salesperson. “Some of our new reps are very good wordsmiths and very good at presentations, but they need to stop and listen a little more carefully.”

Scott himself continues to listen carefully. The chemical business is undergoing a wave of mergers and acquisitions at both ends, customers and suppliers. For example, Nalco customer DuPont just bought ICI, another Nalco account. “Now we have to determine how we are going to handle ICI and DuPont differently,” Scott notes. New customer combinations mean that any existing alliance “may be completely changed.”

To serve its changing customer base, Nalco itself has been acquiring smaller chemical companies. Will Scott try to quickly integrate these new divisions into his team approach to selling? Not necessarily. “If a new unit has a good track record and market niche, and if they do well on their own, leave them alone,” he advises. “We have to admit that not everything great and wonderful was invented at Nalco.”

That kind of admission is Scott’s style and it is crucial to what he and Nalco must do now. “I am not known for being flamboyant,” Scott says. “I enjoy the team approach.”