Vale stated that the hiring freeze for sales could be permanent . Many are covering what was once covered by 2 or 3 people. How can sibg grow if reps are extended on coverage? (Sibg will be 60 something percent of the company once spinco is gone)
Also, if the new action takes more reps from the sibg and creates even more of this extended coverage. Is growth possible or are they counting on the “big brand” to carry 3m?
Lastly, what does this do to morale of the sales drivers that are left?
Who cares about their morale. There is reducing need for traditional sales reps anyway
Medical N95s have always been the side show, and will return to being a side show in time. In hospitals they were only used sparingly pre-Covid. Something like 10-15% of of the total N95 sales, if my memory serves. The other roughly 85% are industrial users, wearing them in places full of dust you don't want to breathe.
Distribution is great for the customer that only cares about purchase price, not quality. The end-user will call up and say: "Send me a case of cheap grinding wheels and some dust masks, whatever is cheap this quarter." The distributor will send over the cheap private label stuff, as requested and make their 25% margin.
A 3M sales rep can turn that conversation into: "I want the Cubitron grinding wheels, they are cheaper in the long run, oh and by the way, I would like to go from cheap N95s to that new battery-powered welding helmet and respirator combo, I tried it on and had to have it." Distribution will never consistently make that conversion because it actually lowers the customer's spending with the distributor. (The end-user spends less...)
This is Mike Vale's root fallacy. He does not understand the role of most 3M distributors - it isn't to make 3M sales - it is to take on the customer credit and stocking risks for customers 3m reps convert over. In order to sell value, not price, it takes dedicated sales reps, experienced and driven. Dr. Vale just hasn't gotten it, and after what 7 (?) years in SIBG, I don't think he ever will.
Distribution can sell these products without 3M’s help. They already sell the same version from 3M’s competitors. What they won’t do is cut their margins by 20-30% to sell 3M. 3M’s industrial sales force has become way too small and inexperienced to influence end users. Customers have told 3M for YEARS that distribution is the greater influencer of their buying decisions. Shift sales efforts to distribution programs, private label and contract management. Winning the end user back in SIBG is a lost cause without a HUGE investment 3M hasn’t been willing to make.
To: @sut+1l7pOvs1
Well stated. Thanks for your comments.
To: @icn+1l7pOvs1
Will respectfully pushed back with a clarification. Yes, safety products should not be complex to the worker using them, however a lot of face-to-face 3M work is required to accomplish this. One example is SCBA. Very complex product and sales cycle, but with the right training (again, face-to-face) the use of it with the end user (i.e. firefighter) can become intuitive. There are other safety products (fall protection for one) that also need those sales touch points to demystify the complexities and gain sales. Thanks for your kind response.
@ Customers
I will respectfully provide a different take on safety products. Safety is the most basic human need says Maslow. Therefore. Imo, safety products must not be complex. Granted. the science is complex, but the product complexities must be invisible to the customer. Overall i agree with your premise. Congratulations on retirement!
Customers guy,
Also a retiree here but from manufacturing. 3M can only command the highest margins by having the EXACT niche product to meet customer needs. And as these needs are constantly changing due to regulatory requirements or external customer demands, no way can a company decide digital marketing is going to work unless 3M wants to abandon the "make a little, sell a little" philosophy which made billions over the decades.
Somewhere in the past, I heard a competitive advantage for 3M was customer intimacy. The sales force worked closely with research and manufacturing to meet the needs of the customer, sometimes anticipating the next family of products even before the customer knew exactly what they needed.
Now we have biz VPs that want to use a commodity products sized company sales force for a specialized products company. No wonder organic growth has been dismal for years. The problem here is once you lose your reputation for customer service, your competitors will swoop in with real people making the case to but their product and even save a few bucks.
Arrogance has been the downfall of the proud before and it's happening again.
The "veil" was torn off in sibg when it came to N95s. The decades old design was proven to be outdated and uncomfortable to wear. With such backlash against "masks" I don't think people will accept forced usage again. Hospitals will use more of the ear loop face covering types and less N95s. Say goodbye to N95 market....
I’m wondering if MV’s position is based on the digital marketing team’s influence. Although I’m now retired (20+ yrs marketing), a couple years ago this team was constantly whispering in the ear of upper management that based on digital online content availability, “studies show” 80%+/- of people know what they want to buy before talking to a sales person. I came to realize that this may be accurate if you are a consumer buying a TV from Best Buy, or shoes from Zappos. It does NOT, however, work when dealing with industrial applications, complex safety products, or traffic control materials (to name just a few). 3M has too many businesses that require “high touch” sales interactions in order to be successful. 3M’s DNA does not allow for the sales process to be completely digital and MV may be sliding down a slippery slope regarding the role of 3M sales reps. Comment?
Vale must believe that customers must want to flock to 3M to overpay for products when they can get a mini me for 20 percent cheaper and have a sales rep that answers the phone, pays visits, etc.
This is the classic GE "do lots more with lots less" fallacy. It doesn't work but enough BS business articles sold the world on the GE way.
Now we have tireman pitching the same mantra.
The old saying "it takes money to make money" means you need to invest. Sadly this company lost sight of that vision 20 years ago.