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Mitsubishi Electric's Salesforce transformation isn't hot air as engineers get CRM data at their fingertips

Stuart Lauchlan Profile picture for user slauchlan December 18, 2019
Mitsubishi Electric Trane HVAC will continue rolling out new Salesforce-centric iterations in 2020, but its CRM transformation journey began back to 2014.

Mitsubishi HVAC

We sell air conditioners, which is another really sexy industry to work in.

So says Christopher Osment, Director of Information Technology at Mitsubishi Electric Trane HVAC US (METUS), a 50/50 joint venture between Ingersoll Rand and Mitsubishi Electric US, providing products, systems and solutions capable of cooling and heating any application from a home to a large commercial building. It operates via an ecosystem of dealers and distributors who are the firm’s customers. Osment explains: 

What we've done is we've partnered to build the best air conditioning and heating systems on the planet,  for efficiency and green initiatives ,with Ingersoll Rand, which is an outstanding sales organization  in the industrial segment. So today, we have a very large partner, as well as all of our customers who we are working with. Now we're on the cusp of a second evolution in our business in terms of CRM options. 

Osment joined Mitsubishi Electric some 8 years ago and inherited a series of challenges on his arrival: 

At that time there were four people in IT and they knew how to repair PCs. The CEO said, ‘We don't have an information strategy. We don't know where to go. I need help’. He said, ’I want a new CRM’. We didn't have a CRM. He said, ‘I want more data’. I said, ’What data?’. He didn't have answers.

While Osment was wrestling with this to-do list, a chance encounter with a senior sales engineer provided insight and inspiration: 

I said, 'What brings you here today, what are you up to?’. He had a napkin and on one side of the napkin he was drawing the diagram of a large building that was going to be built. And there were some markings on it, some diagrams for the air conditioning system. On the back was a list of materials, a list of air conditioning equipment that would go in that building. Now, our sales team are trained engineers, they know this stuff by heart. They're good at it. But what we were not good at was order management, inventory management, margin calculation, getting approvals done. So I asked him what he was going to do with that after?

The answer was that the engineer was going to take his napkin into the order management team and ask for it to be typed up. When that was done, he would take it into the warehouse to ask the floor manager there if the necessary materials were available in order to do the sale the following week. Once that was confirmed and a shipping date agreed, he would then go to the VP of Sales and between them work out what sort of pricing and discounts could be offered: 

At that point, I realized, here is a certified skilled engineer with customer relationship skills, wasting his time running around the office trying to figure out how to close the deal. That's when I knew here's where we need to go. Where we needed to go was to put it in their hands. Don't have them drive to the office and ask people face-to-face. So over the course of the next year, we went through several steps  to take that two hour process in the office - and for remote sales people living in other states, a two day process of phone calls, emails, handwritten notes, spreadsheets, missing information - and we compressed  that down to 30 minutes.

That’s paid off, he argues: 

When I arrived in 2012, there were 105 sales people, they were doing, approximately one proposal in formal documentation  a week. And our closure rate on big deals - three or four truckloads of equipment  - our closure rate was around 20%. We went live in December 2014 with Sales Cloud and CPQ…Proposals went up four times from doing one a week to four a week. Our closure rate went to 37% within 90 days. 

Data, data, data 

All of this has been achieved by empowering sales staff with data at their fingertips, explains Osment:

We trained them how to do all those steps electronically. We didn't take away from their customer relationships and we didn't subtract any of their  engineering knowledge. We let them keep that value-added knowledge in their workflow…the message I always like to give people is that we didn't take away what they were good at. We didn't transform how they provide value to their customer; we sped them up so they can provide more value. 

Prior to this, he quips, the Mitsubishi Electric office was akin to the New York Stock Exchange in the 1960s, with lots of people waving bits of paper around and shouting: 

That's what it looked like in our office, eight years ago. Slow quoting, manual processes, people looking for missing spreadsheets and different sets of numbers and different emails. We cleared all that up. We moved the clutter out of the way. We sped up the information flow. We put it at  our fingertips. And that made them better at their job. 

The technology underpinning this transformation was Salesforce, including Sales Cloud for base CRM, Service Cloud for customer care cases, Salesforce CPQ for quoting and Community Cloud to extend new capabilities out to the firm’s dealer and distributor ecosystem. 

Working alongside Mitsubishi Electric from the start has been Salesforce partner Simplus, which produced an initial 47 page outline roadmap which impressed Osment: 

I've been in software for 40 years and the first thing I said was, 'It doesn't matter if they got every page right, they took the time to think about my problem’.

It’s been an ongoing journey, not a ‘one and done’ project. After getting the foundations in place in 2014, iterations have continued to be layered on. Osment notes: 

Our strategy in this multi-phase, multi-year project was that we wanted to improve and we wanted to show immediate impact, but then we wanted to build a pathway to, in our words, the unified view of the customer. I wanted to leverage our sales engineers relationship skills. They're good at it and I wanted to put more and more data in their hands and more and more different views. We're still on a path to take the best of our people and make them better. Take the internal operations and smooth it out - that's the underlying theme of our roadmap.

Each iteration or addition of new products/capabilities is preceded by a rigorous assessment between METUS and Simplus of what the next phase of transformation will involve and what the key milestones will be. Forward planning is critical, says Osment: 

We always start the beginning of a phase with, 'I want you to map out this phase's journey' because I like both Simplus and my team to understand how we're going to get through it. Effectively, the 60% of brain power that occurs up front, on a whiteboard and charting it out, makes the 40% of implementation go very, very well. It's a two-way partnership. We have to commit to providing them with the business workflow information and the understanding of the business and the phase we're in, and they commit to us to diagnosing how automation can help that. And we generally come out with not just good, but excellent rollouts with our teams. 

Salesforce pioneers

Across the years, Mitsubishi Electric has been among some of the most pioneering Salesforce customers, with Osment pointing to CPQ and Community Cloud as examples where this has paid off: 

I know for a fact we were the 30th customer on CPQ, so we were charting new territory. We were one of the early adopters of Communities in 2016. What we did is we set up a community with the basics - here’s your audience, here’s a view of our inventory, here’s a view of pricing if you want to create your own quote and submit it to your sales rep. We stood that up in 2016, and what it helped us with was giving the users, giving our external partners the ability to create the outcome. 

We started to get forecasting inventory - what are they thinking about selling? That helped us to get a view of future inventory demand. And where are they selling? If there's 20 quotes in Manhattan, that's good. If there's 40 quotes in Herndon, Virginia, what's going on there? We need to go find out why are they quoting so much in Herndon, Virginia. So we got a view of what was going on outside of the business. In 2016 I think we had about 600 users on our portal. Today, we have 19,000, so we have got engagement from our customers.

Upgrading to Salesforce Lightning has also been part of the transformation journey. When the first Salesforce roll out began in 2014, Lightning wasn’t around, but 2018 and 2019 have seen work undertaken to tap into the features and functionality it can offer. Osment says: 

We're going to go live with Lightning on Communities in January. We're going to start an application which is effectively, our dealer scorecard. The idea was a brainstorm from our VP of Sales. We  came up with a strategy on how we can take existing components and functions, re-organize and enhance them and come up with a way for our sales teams to have an online tool to sit with the dealers, the second tier of our distributors, and talk about what are they doing in their business. How are they using Mitsubishi's marketing development funds?  How are they selling> How are they getting service from us? How are they responding to leads? It comes up with a scorecard so that we can then take that to our distribution partners and say, "That contractor is a winner, work with him. This other one we still need help from you to build him up, help us build that dealership up, so we can expand the second tier of our market’, which of course results in sales. 

There’s also discussion underway about two other Salesforce offerings - Marketing Cloud and the AI capabilities of Einstein, although no decisions have been made to date. Osment explains: 

We're going to look at Marketing Cloud very, very thoroughly, because there are features in there we know we want to use, but my strategic approach is, don't license it if it's not going to give us 60 to 80% value add. We got to have at least that much to say, we'll take this piece and do it this year, another piece next year. It is a roadmap. 

Einstein is under discussion. We have some other priorities, but Einstein's in discussion. In the channel distribution business, the variables are more about our relationships with our distributors and our customers. It's not as if we're exploring new markets. We sell finished goods and we know where they go.  To have Einstein try to figure out new things is not as high priority as to put data in our customers hands and make them more powerful.

On the table as well is tapping into the Mulesoft integration offerings, particularly in relation to integration between Salesforce and SAP. But there’s another wider objective that Osment has in mind: 

I want to go 100% online with our customers within two years. How many of [us] still get faxes? I'm on a personal mission to eliminate them! After looking at Mulesoft, I foresee us being the integrator, helping us to go to our customers and say, ‘No more faxes. What’s your procurement system? And we will use Mulesoft and connect to that’. That's the idea that I've gotten.

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