February 28, 2012 AT 9:02 am

The missing link: What “Big Semi” sales reps don’t seem to understand

Photo: Alexandre Dulaunoy (CC BY-SA 2.0) source

I just got of the phone with a sales rep for a large semiconductor company trying to get a bit of information about a chip I was interested in.  The first question: “what’s the volume?”.  When I mentioned a few thousand to maybe ten thousand units, the tone of voice changed and I couldn’t keep the guy on the phone for more than about 90 seconds.  

Putting sheer rudeness aside, I always scratch my head whenever I run across people like this — and it happens woefully often.  The thing that bothers me isn’t being treated poorly myself … it’s that it doesn’t even make business sense to me.  I can understand the naive logic that if you’re buying <100K units you’re not worth the time on the phone, and definitely not worth any support investment, but this just seems fabulously narrow minded to me.  The reality is, there are probably what … ~10K genuinely active apps engineers out there in the world doing this stuff every day?  I’m just making that number up, but it sound about right to me, and I know first-hand how small the EE world is and how everyone makes the rounds through the same dozen or so big companies.  What bothers me with this attitude from sales reps is that … there are no small companies in electrical engineering!  Not to say there aren’t small companies of say 10-100 employees that make limited financial contributions to the bottom line of Engineering Inc. (emphasis on financial!), but what I mean is that this world is so small that the competent engineers at those small companies also cross the street one day and make much bigger decisions (financially that is!) at another company, and vice versa, and they definitely aren’t going to forget the rude treatment and getting brushed off by you when that happens.

Granted, having worked in apps at a big semiconductor manufacturer I know that 80% of the inquiries that come in are pretty basic and betray a lack of understanding of the fundamentals — without passing judgment, it’s hard to help people who don’t have a firm footing in the basics — but it’s easy to spot the people who do know what they’re doing and are asking the right questions.  These are exactly the kind of people that might be ordering 10K units today, but not only is it possible they’ll be in a position to order 1M tommorow, but they are probably constantly in contact with other engineers at other companies who do order in that volume, and won’t hesitate to share their experience — for better and for worse.

Just ranting, yes.  But it’s a bone I’ve been meaning to pick for quite some time. :)  So wise up dodgy sales reps: stop looking at just numbers, and think about opportunities.

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16 Comments

  1. I agree! This is actually one of the reasons I love to order from Texas Instruments, because they DO seem to care about the smaller companies and projects from hobbyists. Though it costs a little more I’m often finding myself using their components only because I like them and trust them!

  2. It’s not personal, Kevin. It’s just money.

    This is nothing unique to the semiconductor industry. It’s sales, period. Salesmen only want the big commission, so when you’re not going to provide that, they want to jump to the next customer who might.

    I’ve been in support positions behind sales teams for years, in multiple industries, and it’s always the same story. A customer with a big order gets all the attention, while the small one-off gets dismissed and ignored.

  3. Nate:

    Indeed, I don’t take it personally, and have a pretty thick skin for things like this. What bothers me isn’t getting brushed off personally … it’s that it just doesn’t make good business sense to me in such a small industry (measured in terms of engineers active in design and decision making).

    I don’t think it will change, but I do see some companies that seem a bit more far-sighted than others in this regard. I’ve carried over business or avoided some suppliers from one company to another simply because of the relationship I had in the past.

    Kevin

  4. Kevin,

    I have to agree with some of the comments. You know it has everything to do with the numbers. But is also has to do with their own business processes. Some manufacturers, like TI and Microchip, have their own sales and Engineering force and they have support through distribution. Others have no direct sales and engineering support except for the very largest customers (think Apple). These business processes affect the end user more than the manufacturers think.

    When you want a particular part, you probably want to deal with the manufacturer. But that’s not always who is going to give you the best support. Maybe the manufacturer’s sales guy was told by his boss “You can’t have any accounts under a certain volume or $ value”. In some cases, distributors or manufacturer’s reps would kill to have volumes and revenues of that number. Engineers would be shocked over how many conversations have been had over their business by every supplier and distributor. I know I was.

    In the end, I agree that there are short-sighted sales people that don’t understand how small this business is and how few people really make the decisions of what part to choose. There are some manufacturers that get it and others that don’t.

  5. yelp for engineers :)

  6. Mark:

    My own experience is that when you can get through the first layer of anonymity and get an engineer on the phone, most companies are very helpful. I have the impression the hard thing is just getting through the first-line support, or past the smaller distributors with reseller agreements for your country and no reason to care about the manufacturers long term interests. Sometimes the large distributors are quite good (as you say a good volume for them can be much more reasonable than a good volume for the manufacturers), but it’s always hit or miss. But I’ve usually had good experience with your own company if it’s any consolation. :)

    I think the big divide is that the smaller local distributors have no reason to care about the manufacturers interest … the top-level distributors are often better because they have a different relationship, but it does all come down to how many dollars you’re putting in the pocket of the person on the phone and where their interests lay.

  7. Perhaps they know you won’t dare to out them publicly.

  8. Kragen:

    There’s nothing to gain pointing fingers, and I think people are just doing their job, and I can understand the perspective of the sales staff not being interested in the small fish. It just sometimes strikes me as unfortunate that sales people are always going to focus on volume since that’s what pays the bills (and I can understand that!), but it probably doesn’t take into account the way decisions are made on what parts go into what products longer term.

    You might make a decent amount of money in the short term selling 500K units to a company from whom you get no exposure for your product, but sometimes a smaller company selling 10K units might actually offer you much wider exposure and open up other 250K+ opportunities down the road. You need to look at the whole food chain. :)

    As a side note, the company did get back in touch with me, which is better than some companies I’ve dealt with in the past … it was just a little reminder of something I see a lot in the semiconductor industry that always kind of irks me. I’m sympathetic having spent time on the other side of the phone as well, it just seems short-sighted to segregate things into ‘big companies’ and ‘small companies’. It’s a faulty distinction.

  9. Is this a tools problem? Specifically, that the amount of paperwork involved in *any* sale is so much that the company would lose money (when you count the time taken by salespeople, accountants, and who knows who else in the company) on any transaction below $N dollars?

    It sounds paradoxical that a tech company might be poorly automated, but if you have only a few enormous sales per quarter, why bother making it scalable?

    If anyone can turn this into a business opportunity, let me know how it turns out. (It’s possible the business opportunity has already been seized, and it’s called “DigiKey” and “Mouser.”

  10. I’m always a little miffed when the first question I’m asked is “what’s your volume?” I understand why they ask, but I still don’t like it.

    You’re right about the short-sightedness. You’ve hit the nail on the head with this post.

  11. As others have mentioned, this is a problem with most sales environments, especially at the manufacturers end (IMHO). Sales guys are under great pressure to meet quota – often in an area where they dont fully understand the tech issues (which is where sales support techies come in). There are a fair number of sleazy sales people out there that know all sorts of social hacking skills and dont look past the $$. There are also the golden ones who do care.

    My Dad was in electronics sales for pretty much his entire career – much of it as a manufacturers representative. I think he has fully retired now, but he surprises me sometimes. He is one of those golden ones. I have bumped into a few people who dealt with him as customers in my own career (at tech shows, etc “hmm isdale? are you related to Ian”…) They have praised his care and support – and said they have often gone back to him as a rep vs dealing direct with the company because he cares. Some followed him as they moved between jobs. He was known to have pointed you at the right solution, even if it was not one that he represented. Those comments made me very proud.

    It is a shame that the sales/marketing world values the bottom line more than customer relationships. It is not just the company that benefits from better relations – the whole world becomes a slightly better place.

    Kinda like how AdaFruit handles their support – with true care.

    He was one

  12. I recall about 10 yrs ago working in RF and audio processing and having a rude rep from “company 1″ because of our small R&D volume and the our company was not going to be purchasing large volumes for production. Went with another vendor (company 2) and the product is going mainstream with others manufacturing the product. Not sure what components are in the devices but it would be really funny if they were still not using components from company 1 though a lot of water goes under the bridge in 10 yrs. Suspect the volume is in the millions. The technology may be in every home sometime soon, Taking a very similar path as DTV.

  13. The grass is not greener on the other side. I used to work for the world’s largest power tool company. We had microcontroller companies pounding down our door because we would request quotes for half million to 1 million quantity pricing. Once these companies get your high quantity business the support drops because they are moving on to the next company. In the mean time, we are porting our firmware to the next microcontroller manufacturer who is offering more chip for the same amount of money. This cycle just repeats itself. We started with Zilog, then Microchip and now TI. It is all about business in the end.

  14. This issue, although not new, seems to have gotten worse. I worked for a company, that was essentially a startup in electronics ~35 years ago, and made medical electronics. Our volumes were quite low back then and it was very hard to get samples and sometimes, even if we offered to pay for the part, we could not get a few for prototyping or testing. Thank goodness for DigiKey and Mouser. When I departed the company in 2009, our sales exceeded $800,000,000.00 and suppliers were quite interested in providing us with samples. What is even worse is getting samples of magnetic materials and bobbins.

    Companies are focused on sales now, not in the future. But they don’t realize that all large growth comes from small customers not large. Not all small customers will thrive, but a few will. But the biggest growth will come from customers who are kids now and will eventually turn into the engineers 10 years from now and spec in the parts from the company that supported their hobby today.

  15. When I sense a sales rep doesn’t want to cooperate, e.g. after I truthfully answered the "what’s the volume" question, I make it as point to end the phone conversation first. It gives me great pleasure to hang up on uncooperative sales reps.

    It is nothing personal? Yeah, sure.

  16. If you were into warehousing, you would be afraid to stock one of these low volume chips. The customer can change their mind at any moment and not want the part. The person or organization that runs the warehouse has inventory that sits around for years, years and years and never gets paid for it. It is money invested that never gets returned. Your profit sits in the warehouse and nobody buys the product. Talk to people in warehousing and they will tell you what has been sitting around for 10-15 years if the owner hasn’t thrown it out already.

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