Magazine Article | July 1, 1998

INCREASE Your Sales By Educating Your Customers

The Automation Products Group of Steiner Electric Co. attributes part of its growth to educational classes. Can you afford not to do this?

Business Solutions, July 1998

The Automation Products Group of Steiner Electric Company has grown 40% annually each of the last three years. The Group's secret? Much of the growth can be traced to educational classes and seminars that it holds quarterly for potential customers. In addition, the Automation Products Group has developed a program in which prospects visit the Group's existing customers, according to Arnie Hetzel, manager of of data collection products. These site visits allow prospects to see how companies that have adopted automatic identification and data collection (AIDC) systems are benefitting from them.

The Automation Products Group is an AIDC VAR. Steiner Electric Company is a full-line electrical supplies distributor strategically focused on the industrial/MRO and OEM markets servicing the greater Chicago area. In 1980, Steiner Electrical formed the Automation Products Group to support advanced technology products like programmable logic controllers (PLCs), sensors, drives and data collection.

"The classes and site visits help us cement relationships with prospects," Hetzel says. "That's why they have been so instrumental in our growth."

In the following pages, Hetzel describes how the Automation Products Group structures the classes and site visits, as well as how the company has turned those efforts into sales.

Preaching The Benefits Of Technology
The Automation Products Group formally began offering classes two years ago. Previously, classes were only held sporadically. Says Hetzel, "In the past, we didn't have much classroom space. About two years ago, we bought a building across the street from our existing location to serve as a new educational training center. This center comfortably accommodates 75 people."

Each data collection class lasts one day. Hetzel estimates the sessions draw about 40 attendees from several different sources. For example, many attendees' companies previously have bought electrical supplies from Steiner Electric Company. These individuals typically attend classes because their companies are considering adopting new technology.

In addition, the Automation Products Group resells products from vendors like Accu-Time Systems, Zebra Technologies and Intermec Technologies Corp. Those vendors often refer users to the Group.

How To Go About Developing A Class
In terms of subject matter, a typical class might be devoted to radio frequency-based (RF) data collection technology. According to Hetzel, such a class would cover issues like cost-justifying RF systems, developing implementation plans, performing routine maintenance on hardware, and the basics of using RF handheld computers.

The Automation Products Group chooses subjects by tracking the issues existing customers struggle with. In addition, attendees complete evaluation forms. "If we're not addressing an important issue, we'll make the appropriate changes," he adds.

Turning Education Into Sales
Several weeks after each class, staff from the Automation Products Group contact attendees about purchasing AIDC and time and attendance hardware and software. Hetzel says the results from these follow-up calls have been positive. "The classes are another opportunity to get a foot in the door with a prospect," Hetzel explains. "The classes allow us the opportunity to evaluate their immediate and long-range needs and requirements.

"The attendees are there because they have some interest in using data collection," he adds. "And the classes intensify their interest in technology as they come to better understand its hard-dollar benefits." While the classes have resulted in sales for the Automation Products Group, they also have an important educational aspect. "Hopefully, an attendee will leave with a better understanding of data collection and time and attendance," he says. "As a result, the classes reduce the amount of time necessary to educate customers who end up buying from us. And when customers are ready to make a purchase, we have already established a high level of confidence in our ability to support their requirements."

Classes Should Carry A Fee
The Automation Products Group has learned one important lesson in administering the classes, Hetzel says. At one time, the Group did not charge attendees a fee. However, Hetzel soon learned that that was a mistake. "Anytime you receive something for free, its value is perceived to be less than if you were to pay for it," he explains. "In the past, we would spend several weeks preparing for a class and signing people up. And typically, we would expect about 25 or 30 people to attend."

Typically, however, less than 10 people would show up. "People said they couldn't attend because some issue related to their business came up at the last minute," he adds. "The reality is without some form of investment, they don't feel as compelled to attend."

Now, attendees pay $140 for each class. Since the fee was instituted, attendance has increased over 90% for those who pre-register. Class size is typically 35 to 40 people.

In addition, Hetzel says the revenue generated from attendance fees has helped improve the classes' overall quality. "With the revenue from the fees, we've been able to provide more instructional materials, like text books," he says. "And we can bring in representatives from our vendors as well as professional consultants to lead a class."

Giving Customers An Up-Close Look At Technology
Hetzel also credits the Automation Products Group's recent growth to the fact that it formally takes prospects to visit the sites of its existing customers. Two or three times a year, Hetzel will take six to 10 prospects to the site of an existing customer. The visits give prospects an up-close look at how a "real-life" end user is benefitting from AIDC and time and attendance. Hetzel takes prospects to visit the sites of customers in the same market, (e.g., manufacturing). That way, the prospect can better relate to the application.

"Of course we promote our systems. But when an existing customer speaks directly to a prospect about the benefits of AIDC, the prospect is getting a more objective viewpoint. That's why visiting a site really hits home - the prospects see that this technology can work for them as well."

Hetzel says it is important to limit the number of prospects who attend site visits. "Six to 10 people is a good number to take," he explains. "With more than 10 people, it's difficult for them to hear well. We typically visit noisy environments. And it's more difficult for people to ask questions when there's a large group of people."

Going Beyond A Sales Mentality
According to Hetzel, many of the Automation Products Group's competitors don't offer classes. However, he says that even though such classes require a lot of planning and time, they are important.

"We don't want to just sell hardware and software," Hetzel adds. "It's also important for VARs to educate customers. The classes also have helped spur over 40% annual growth in our AIDC products."