20/12/2024. The Hidden Power of Sales in Modularisation.

If you believe your modularisation approach will be successful because your engineering team is world-class and fully committed, think again.

The truth is that modularisation’s success is determined by sales rather than engineering. In most businesses, the sales team is the reason modularisation fails.

That may sound contentious, but at Modular5®, we’ve seen it happen repeatedly. Senior management invests in a modular product portfolio, believing that it will transform their operations.

The sales department, still locked in their old ways, ignores the basic modules and sells bespoke, one-off solutions to every customer who asks.

What was the result? Engineering is drawn back into Engineering to Order (ETO) mode, with products customised for each contract. Costs rise, deadlines are missed, and the once-promising modular concept devolves into an expensive disaster.

The Shipbuilder Who Couldn’t Leave the Old Way

Let me tell you about one of the shipbuilders we worked with. They possessed everything needed for a modular revolution: a portfolio of standardised modules, a strong engineering team, and a passionate leadership team. They were prepared to abandon the inefficiencies of custom designs for good.

Or so they thought.

Cracks appeared as early as the first sales meeting. The sales team was hesitant to push standard modules. “The customer insists on a custom design,” they shared. “We’ll lose the deal if we don’t give them exactly what they want.”

The purchaser did not insist on a custom design. The sales team just did not try to communicate the benefits of the standardised solution.

Engineers were called in to make adjustments. Deadlines ranged from weeks to months. Costs rose dramatically as engineers laboured overtime to satisfy the new criteria. What about the standard modules? They sat, accumulating digital dust.

This was not an engineering problem. It was a sales problem.

Why Sales Hold the Keys to Modularisation

Most CEOs believe that modularisation is entirely about engineering. Design the modules and incorporate them into your product range, and the benefits—lower costs, faster delivery, and higher margins—will follow.

However, the truth is that modularisation is doomed to fail if sales are not involved.

Your sales crew is the link between your organisation and your clients. Your modular portfolio will never be used if they don’t sell the standard. And if they price customisations too cheap, buyers will always choose bespoke choices, leaving your engineers in the weeds.

The entire promise of modularisation—efficiency, speed, and scalability—is dependent on your sales team selling standard and pricing customisations high enough to discourage unneeded variants.

However, many sales teams oppose this. They are afraid of losing transactions, therefore, they make unrealistic promises to customers without considering the cost to the organisation. They hide behind the excuse that “this is what the customer wants” while, in truth, they cannot demonstrate why the standard is the best option.

When Sales Makes It Right

Imagine an alternative circumstance. The sales team meets with a potential client. Instead of leaping to customised answers, they begin the debate differently.

“What do you need this product to achieve?” they’re asking.

The consumer describes their goals. The sales team leads them through the product configurator, emphasising how the tried-and-true solutions may meet their needs more quickly and affordably.

They demonstrate how standard modules are upgradeable, with a higher residual value and a smaller environmental effect than custom designs.

And when a client enquires about custom choices, the sales crew does not hesitate. “We can absolutely do that,” they responded, “but here’s what it will cost.” The price is high—high enough to make the buyer consider if the personalisation is worthwhile.

Most of the time, that is not the case. The customer accepts the trade-off after realising that the standard product can provide 95% of their needs. The company saves both time and money. The modularisation technique produces outcomes.

This is not a hypothetical. We have seen it happen.

The Long-Term Benefits of Selling Standards

When sales and modularisation align, the benefits spread throughout the business. Lead times are reduced as engineers concentrate on developing conventional modules rather than firefighting special orders. Costs decrease because you are no longer starting from zero with each consumer.

Customers also win. They receive items faster, at a reduced cost, with proven dependability and upgrade possibilities that extend the life of their investment.

Let’s remember sustainability. Standardised modules save waste, both during manufacture and at the end of the product’s lifecycle. They are easier to repair, refurbish, recycle, and reuse, providing value long after the initial purchase.

Once sales sees the benefits of modularisation in action, they realise it makes winning business easier rather than harder. We’ve seen increases in annual revenue of a factor of two or more due to the combined benefits of modularisation combined with a committed and engaged sales team.

This is the promise of modularity. However, it only works if sales do their jobs.

CEOs: It’s Time to Rethink Your Focus

If your modularisation plan isn’t producing results, don’t blame your technical staff. Look at the sales. Are they selling the standard? Are the customisations priced high enough to discourage unneeded bespoke work? Or are they hurting your investment by sticking to old habits?

The most sophisticated modular system in the world is meaningless if your sales staff does not support it.

At Modular5®, we assist businesses in aligning their sales strategy with modularisation aims. We teach sales teams how to promote the benefits of standardisation and direct customers to solutions that work for everyone. To support the sales managers and save them much time, we implement a product configurator combined with a Configure Price Quote (CPQ) system.

If you are ready to make modularisation successful, schedule a conversation with us today. Let’s ensure your sales team is the driving force behind your modular transformation, not a hindrance.