Corporations and automotive. Perhaps the two most hated words in my target audience. Both define probably the most difficult markets possible.
Corporations are shrouded in mystery, opacity. Complexity. And the length of the business cycle. It takes courage and perseverance to find a person in a corporation who wants to have fun with you and who will help you break through.
And automotive elevates it all to the second. Rigid processes, and brilliantly built and managed. Automotive is simply considered the hardest of the hardest.
Now imagine that there is a company that has voluntarily chosen this deadly combination and is successfully doing business in it.
That's why I invited her sales director in front of the camera / microphone.
Jakub Klíma from AIMTEC a.s. I've known and observed Jakub for some time. He does his job really well. That's why I asked him about his know how...
🔸 What led AIMTEC to specialise in the automotive sector?
🔸 What is the reason for specializing in corporations?
🔸 What led to the establishment of the analytical team and what is its task?
🔸 How to break into the corporate?
🔸 How to plan production capacity and manage customer expectations?
TRANSCRIPT OF THE INTERVIEW
Martin Hurych
Hello. I'm Martin Hurych and this is Zahžeh. As you can see, we're in a completely renovated studio for the first time, so I hope to bring those innovations to the podcast itself. Today's episode is going to be about trading for the first time in a while. I've brought on a special guest, Jakub Klima, to talk about trading in one of the toughest segments. Hey, Jakub.
Jakub Klíma
Hi, Martin.
Where is the best place to combine bike, nature, food and people in the Czech Republic?
Martin Hurych
Jakub is a sales director and board member of AIMTEC, which is a supplier of software solutions that I think are quite specific. I know about you, you like to ride a bike, you like mountains, or nature in general, you like to eat and drink well. So when we can do it again, where will we go in Bohemia, where is the best place to combine it all?
Jakub Klíma
In the Czech Republic, it's absolutely best to combine it in Italy, if that's how you put together good food, drink and skiing or cycling. There are certainly places in Austria that are nice too. Unfortunately, in the Czech Republic, the gastronomy in the mountains is still a bit lacking.
Introduction of Jakub and AIMTEC a.s.
Martin Hurych
I said you were making specific solutions. So let us introduce what AIMTEC does and how you got into AIMTEC and what your career path is.
Jakub Klíma
I would ask what version of the performance you want to hear, because as a good salesman you obviously know that you need to adapt your speech to your counterpart. So who is our listener so that I can choose the right version?
Martin Hurych
My bubble is tech companies, primarily small, medium-sized companies, a lot of IT, a lot of manufacturing. I know you're in automotive, so automotive suppliers as well, a lot of business owners, technical and analytical introvert bubble.
Jakub Klíma
My favourite version of what AIMTEC does, and unfortunately I can't use it too often with customers, is that we help those companies survive. What the automotive industry is in now and probably will be for some time is a very challenging situation. Basically nobody is able to plan for what's going to happen in a year, maybe even a month, and that's something that specifically the automotive industry hasn't been used to. There the plans were very clear 5, 7 years ahead and it was clear what was going to happen and the whole supply chain was actually planned for a long time ahead. That has changed today, so the only certainty is that tomorrow will be different from today. What we deliver to those companies through software is the ability to react to that change a little bit faster than the competition.
Martin Hurych
Let's get a little more specific. The cliché is, explain to your grandmother what happens to the company you get into when you get out again.
Jakub Klíma
This is my second favorite version of the show. We help automotive manufacturing companies that make components, not car companies, plan what, when, what and how to make them so that they can make a profit and then be able to implement the plan.
What led AIMTEC to specialise in the automotive sector?
Martin Hurych
You've been at AIMTEC a long time. What brought you to AIMTEC and what made you stay there so long?
Jakub Klíma
Coincidence, life goes on and opportunities arise. What keeps me there is certainly a number of things, but first and foremost I would mention my personal need that I can satisfy there, which is to be able to influence and change things. We may be a pretty big company now, but we're still not so big that we're completely rigid. The ability to discuss changing what we came up with yesterday tomorrow, if it makes sense to us, is inherent and that's what I enjoy about it.
Martin Hurych
How many of you are in the company and how many people are in the store?
Jakub Klíma
We have quite a number of students with us and including them we are 250. We have students there because they all struggle with people in our industry, so we educate them. There are 18 people in the shop.
Martin Hurych
Now we come to why James is sitting here. The first time I saw James and listened to him run the business, I found that I had virtually nothing to hand over to him because it was one of the best run sales teams I had seen up to that point. There were a couple of things that struck me about him and his team that I'd like to discuss in detail here today. You've mentioned automotive a couple of times here. The manufacturing part of my bubble sees automotive as absolutely the hardest part of the market, the hardest segment, and a lot of people are trying to get out of it or at least diversify out of it because it's very unpredictable for them. You, on the other hand, after a few stumbles, decided to go into the automotive industry more or less exclusively. What led you to that decision?
Jakub Klíma
Someone has to do it when it's hard. But I'd like to respond to the praise of our team. Of course it's not true for your bubble, Martin has something to pass on to us because everyone can improve. However, back to automotive, the idea wasn't revolutionary or profound. In the 1990s, when AIMTEC started, there was a boom in the automotive industry in the Czech Republic and Slovakia. So the reasoning was simple, if there are a lot of companies and they are growing, then the market is interesting for us. Moreover, since we happened to get our first orders in this sector, we understood it, so we thought it would be a good idea to continue.
What is the reason for specializing in corporations?
Martin Hurych
Another thing that gives a lot of people hives is selling to corporations. When I say corporates, for example, in IT we are already talking about enterprise level, so these are really big corporates. That's another thing that you guys focus on. How did that decision come about there? Because a lot of people feel that the corporation is for the long term and it's an opaque structure where everything takes an awful long time. Those first thoughts tend to be negative rather than making you want to go for it and so a lot of people focus on small and medium sized companies where they feel that it's easier to make that decision and break into the company. How do you see it?
Jakub Klíma
There was no decision there, because of course 90% of the companies in Czechoslovakia, the automotive suppliers, have some foreign mother. So there it was a necessity.
Martin Hurych
However, you have started to specialise in this segment. When we first met, you told me that small and medium-sized companies are now completely out of your segment or out of your target group.
Jakub Klíma
There, the realization took place when we were doing a second project in one of these corporate companies in its second location. At that time it was in Poland. We found that the second project was much easier for us than the first one. So it was exactly the same in terms of the delivery, but what we deliver is a very intangible thing that you can't touch. When we first come to a customer, it's relatively complicated for us to agree exactly what it's going to do at the end because you can't really test it. So the first project we do is full of unknowns on both sides. For us, it's not knowing exactly what the customer wants, and for the customer, it's not knowing what all they could get. But when we do the same thing a second time, there is much less of that ignorance, that risk. The third, fourth time it drops very dramatically and then it is almost 100% certain what the product will be. When something is 100% certain, it is much easier to plan and much more profitable. So here we realized that if we do businesses that have more branches, that should contribute to a higher margin of that business.
Martin Hurych
You wrote a very nice sentence in the preparation, "We don't sell compressors, we sell compressed air." Does that mean that you first have to figure out what the compressed air is, where it's needed, then you design a custom compressor, and the chances are that once you've customized it, you can make it again three, five, six times? Is that the joke?
Jakub Klíma
I don't think this idea is so much related to corporations, I think it should be the idea of selling to the individual customer as well. Of course, this is multiplied with the corporation by the fact that it has to standardize by default. So that's where it becomes more important, because as the corporation tries to have all its subsidiaries as similar as possible, if they produce the same thing, that's where the advantage of a repeat solution comes in for us. It should be a little bit tailored for each branch, because a standard is fine, but the surrounding conditions don't always quite allow it, so it shouldn't be dogmatic again.
What led to the establishment of the analytical team and what is its task?
Martin Hurych
The standard job of a marketer is to do the screening of potential companies himself within an avatar. So when I saw the analytics team you have at your firm, my heart leapt. Tell me how you came up with this idea and what is the direct output of that analytics team and how is it connected to the marketers.
Jakub Klíma
I started out 20 years ago and only now have I realised how important it is to know your customer. I have my boss at the time to thank for that, who required me to know who I was going to call, what kind of company it was, and how it was similar to some of our other customers. At that time I hadn't gone to the level of specific people, but I at least had knowledge of the company itself. So now, years later, I realize how prescient that actually was. For years I had lived under the assumption that it was right for a salesperson to retrieve their customer. So how did it happen that the entire analytical team at AIMTEC grew? Everybody is good at something, and usually traders are not very good at digging into some databases and finding out information, too much is I'm not enjoying this. So, when we did our internal hackathon about five years ago, one of the things that came out of it was that we were annoyed by the tinkering and that it would be nice to find someone who wouldn't be annoyed by it, who would enjoy it and who would prepare the information for us. So that's how it came about.
Martin Hurych
So what outputs does the analytics team provide to the business today?
Jakub Klíma
The output of his work is a company that meets the parameters we have set. We have the information stored in the CRM, so we know not only that one specific company, but what group it is part of. As we discussed, we focus on corporations that have multiple branches, so we know, for example, how many branches they have, where they have them, where their headquarters are, and what they produce. But we're getting into the details of specific individuals today. Both at the branches and at the headquarters, we have picked out specific names of people and their positions that we know everything about that we can find out from public sources.
Martin Hurych
I was just about to ask. When you call Carl in Wolfsburg, what do you know about him?
Jakub Klíma
I know where he's worked before, I know what he's interested in. Sometimes we're even able to find out what he's interested in personally, and I know what companies he's worked at and what companies in our portfolio of customers he's most like.
Martin Hurych
How many such companies do you handle, or how big is your target market?
Jakub Klíma
We have, of course, been getting to this state gradually through various parameters, priorities and criteria. However, it was only when we had specified the strategy in sufficient detail that we realised that if we applied all these parameters to some databases, there were only 500 corporations in Europe. That prompted us to say that 500 is an awfully small number and it can be processed, so we sat down and we started to process the market so that we knew each of those 500 companies by name and had all the information that I was talking about.
How to break into the corporate world?
Martin Hurych
I imagine you can find a lot of things in open sources on LinkedIn or Google nowadays. However, I'll go back to what I often see with my bubble. I want to get into Continental, for example. Sometimes you try something, you try one contact, two contacts, and those people give up because it's such an opaque structure that they don't have the nerve. How do you do it? I know you have a special approach. How does the breakthrough happen?
Jakub Klíma
Your choice of Continental is indeed one of the most complex, you got it right. We've already given up on it several times, even though we are in the Czech branch. Our approach doesn't differ much from honest business theory. You need to find a person, because people buy from people who either perceive a need in that company or are willing to listen to it. With that person, you then need to build
a business case that needs to be approved at headquarters. Our approach is that you need to go to both the branch and the head office at the same time, or gradually, but in short you need to have contacts there and there. Obviously the pains that we're looking for are different for the business people at that branch than they are for the people at head office, so you need to know that, but it's about the person. It's not about the company, it's about the person and you need to find the person who wants to make a change. You can't do it without that.
Martin Hurych
I confess that I stole one of those phrases you use in Pilsen. I've used it a lot since we met, from the chimney to the cellar. Does that mean it's a frontal assault on the entire corporate structure?
Jakub Klíma
Yes. Like I said, it's about finding a person, and that person could be sitting anywhere. As the theory goes, I'm looking for a sponsor, and through the sponsor, I get on.
How many decision makers need to be influenced?
Martin Hurych
We talk a lot here about the fact that in most cases there are more decision makers than meets the eye. I'm talking about five to seven for a small, medium-sized manufacturing or IT company. How many do you have? Do you have it mapped out somehow, how many people do you have to get on your side to ultimately say AIMTEC is the company they're going to do it with?
Jakub Klíma
The number is basically the same, but multiplied by two. You need to do that round both with the location where the project is going to be implemented and the same round with basically the same roles, or similar roles at the headquarters that has to approve it. So we're talking about 10 people. It takes about 3 years from the first time you pick up the phone to the first business case signed.
What led to the decision to run the whole business from Pilsen?
Martin Hurych
You're doing all this from Pilsen. What led to this decision? Is it that you have a relatively small group of targets that you can control from one nest? Because a lot of people would think about having their own branches abroad or partners. What led to the decision to dominate the automotive world in your industry from Pilsen?
Jakub Klíma
Our founders are originally from Pilsen. After the experience in Prague, when they decided to start their own company from a corporation and do it differently, they returned to their hometown and the company grew. At some point, we realized that what sets us apart, or is our advantage and we are comfortable with, is the know-how that we deliver to our customers through our products and services. It's relatively complex, complex, valuable, and even though we try very hard to productize it, at the end of the day, it's still the person and what they have in their head that's most important to share with others. That's best done in person even in this digital age, so we've found that being in one place in one building where I can get up and talk to anyone about anything in a minute is just a huge advantage. So we're sticking with that for now, and Europe can be driven and flown around from Pilsen quite easily.
Martin Hurych
This means that you don't have any partners anywhere, you sell everything yourself and the whole sales team is based in Pilsen.
Jakub Klíma
We had a period when we were looking for business partners, we found some, we still have some, but quite frankly I have to say that we haven't found anyone as good as us.
Why doesn't AIMTEC build a partner network?
Martin Hurych
You need to say a few kind words to each other. Let's drill down into this, because finding a partner is the wet dream of a bunch of entrepreneurs. The first thing a lot of people think about when they want to go out into the world is finding someone to do the work for them. Where did it go wrong for you besides not being as great as you are?
Jakub Klíma
Right there. Maybe we just didn't know how to do it, but after we found out that we are able to do it ourselves, we stopped this activity and now we are going to the world from Pilsen.
How to plan production capacity and manage customer expectations?
Martin Hurych
I know that you have 4 divisions and in one of those divisions you were extremely successful. So I would like to ask you about one thing that has been mentioned a couple of times here and who can figure it out, I think it's the holy grail, production capacity planning versus business behavior. Because I think there is nothing more frustrating for a retailer than not having anything to sell. What do you do about it, how do you manage the expectations of both the merchants and perhaps their clientele?
Jakub Klíma
I would certainly like to say that when someone comes up with it, let them come, I will accept their price. Anyway, it's a job. I have no better advice than just honest day to day work and discussion between departments and sharing information. The more honestly it's done, the better the result. I don't have a magic rule, unfortunately. It leads to the fact that when things are going well, project deadlines naturally get longer and you can't promise the customer that after a year, when they finally swing to sign the contract, that the next day they will start working on the project. It has to be explained to him that we are in a way a manufacturing company that has some capacities, we want to keep those capacities busy and those capacities are scheduled for a certain period of time. The scale that is needed for his project is there, of course, but it is somewhere in the future tense.
Martin Hurych
Let's take us a level deeper into that daily discussion. How do you communicate at the production versus business level, how often do you pass information, how far does production see what's coming up?
Jakub Klíma
We talk about it regularly once a month, of course more often if necessary, and gradually extend the horizon we are trying to see. There's no point in going into the fact that we have some kind of long-term five-year plan. Production can plan its capacity, but in our case it is of course mainly about people. It takes at least a year to train a salesperson in our company, it's very similar for a consultant, and they get to full independence and seniority even later. This means that the people we are recruiting today we will need in a year or two. The bottom line is that we have a long-term goal. Then the more operational level is that we're doing what all salespeople enjoy, which is forecasting.
Martin Hurych
That's what I was just about to ask. It's the beginning of the year, a lot of people are still budgeting, I guess I wouldn't say they don't have a full idea, but they're still budgeting. So am I understanding correctly, given the long-term strategies and capacity constraints, that when you're planning the budget for the next year, you're also planning how long it takes to train not only the salesperson, but also the production people and the IT people?
Jakub Klíma
Because it all takes so long, we started planning for the long term. If we thought we were going to do something next year and we hadn't worked on it the previous two years, we wouldn't do anything. That's why we have a long-term plan. We are trying to make the plans for next year as close as possible to that long-term plan, of course, adjusting for the results of the current year. In the case of the retailers, if I am told by the owners that next year's turnover has to double, that's pretty much cut and dry. Unless there is a pipeline in place and I have people who are trained to do it, who know how to do it, it can't be done. But if I know I'm going to do it in 5 years, it's something that can be worked with. I can already recruit those people and train them to start working towards that goal.
How to motivate an acquisition salesperson when production is not keeping up?
Martin Hurych
Director-wise, I totally get it. Now I've put myself in the heart of the acquisition salesman who, while he doesn't like CRM and analytics, likes to hunt as much and as big game as possible. Here you're basically telling him that he has a ceiling somewhere and when he reaches it in July, there's nothing that can be done about it. Is that right? You said the automotive industry is going through a tough time and tough times mean business opportunities. You have some competition, let's say you are going to be better than your competition. You've got a bunch of opportunities now to start pushing yourself because those settled waters are clearing and that's water on the mill for an acquisition dealer, but at the same time, from above, it's declining. Is that right?
Jakub Klíma
That's right. If anybody in the audience is a businessman and they're frustrated that they have a plan to execute and they can't execute it, I would like to motivate them that it's not that bad yet, because the way it is with us is that they have to execute it but they can't over deliver. No, of course it's not that dramatic, but yes, our capacity is limited. There are 24 hours in a day and we don't want people to work more than is healthy and of course we can improve, we can grow, but at that given moment it has a ceiling somewhere. We don't sell software that someone downloads over the internet where there is no cap. For us, it's about people.
Where are the pitfalls in the work with sports / automotive?
Martin Hurych
Now you've reminded me of one of my former bosses who used to say that there are 24 hours in a day and if you don't make it, you still have the night. This all looks sun-drenched. Where are the clouds?
Jakub Klíma
There are a lot of clouds. Probably everyone who follows the media knows that the car market is going through, as I said, a tough time right now. As of 2019, it still hasn't gotten back to the same turnover, let alone to any kind of margin, which has been steadily declining. There are even studies that say that the most cars were produced in 2019 and that there will never be as many produced again. That means that market is only going to go down. On the other hand, to be positive, I have to say that the market is so huge for us that even if it were to decline a lot, it is still big enough for us. But there are other clouds. Corporations know how to work with their profits, and their decisions are sometimes quick and dramatic. In our history, it has been common for a customer to cancel an already running project overnight, not to mention a business in progress. So of course this happens and the only defense against it is a good pipeline to have something to draw from even if something falls through.
Martin Hurych
You said it's an average of three years from first contact to signing. So what year are you currently looking at?
Jakub Klíma
There is a distinction to be made between two levels of this plan. One is the longer-term one, that is the opening up of new corporations, and there we are talking about the three years. However, the result of that effort is some kind of qualified opportunity where that particular contact, that sponsor, that pain and that willingness to talk about an issue has already been identified. There, of course, the time from the opening of that opportunity to the successful closure of that opportunity is shorter, let's say, say, 9 months. So there are these two levels.
Martin Hurych
This means that a new name lasts 3 years and a repeat within that new name lasts 9 months.
Jakub Klíma
It's rather average. Of course, the repetition can be very fast after that. Repeat projects increase profitability and also dramatically increase the success rate of sales, because it is of course much easier to sell to an existing customer. So there we have a really dramatic difference in win rate between a corporate customer and a new customer.
What are Jakub's goals for this year?
Martin Hurych
It's January 1, 2024. When you look back, what would you be happy with accomplishing this year?
Jakub Klíma
What would help me the most in this thinking, planning and even in my work as a trader would be if I could somehow better visualize this planning. It's still relatively new to us, so we're doing it in the best management information system, Excel. So I could see a shift here, because Excel can do everything and nothing at the same time.
Summary
Martin Hurych
Make it work. If anyone wants to follow up with you on what we talked about here, where can we find you?
Jakub Klíma
It said here that we are in Pilsen. We are in Pilsen at the best possible address, U Prazdroje, so we have offices right opposite the famous gate that is on the bottles. Otherwise, the way to reach us is through LinkedIn and our website.
Martin Hurych
So it's not about the knowledge of the traders, it's about the fact that you are opposite the gate of Plzeňský Prazdroj.
Jakub Klíma
It is true that even foreign customers who come to visit us are happy to come and see us.
Martin Hurych
So, cheers to Pilsen and thank you for accepting my invitation.
Jakub Klíma
I thank you for the invitation, have a good day.
Martin Hurych
You too. That was Jakub Klíma from AIMTEC. If together we have brought you new insights into trading today, we are both glad. If you have ideas on how to improve your trading or have any questions, be sure to contact us. Next you know, be sure to like, share where you're listening or watching. Be sure to check out my website, www.martinhurych.com, where the Ignition section will not only have this episode, but also the bonus episode that James and I successfully booked. I'm just crossing my fingers and wishing you success, thanks.