Addressing Margin Erosion and More Manufacturing Trends w/ Salesforce

“It used to be that pricing was the most dangerous thing to change, and that if it were done wrong, customers would head out the door and never come back. As a result of the pandemic and the barrage of supply chain woes, material availability, order management, S&OP and demand planning, all that has changed. Historical supply and demand trends don’t apply anymore.”

In this episode, Salesforce Vice President, Industry Sales for Manufacturing, Auto and Energy Frank Borovksy brought us this insight and much more. Listen to Frank and Chief Marketing Officer Lindsay Duran discuss current manufacturing trends, why dynamic pricing is necessary to prevent margin erosion, and what to expect in 2023.

Read about a building products manufacturer that used advanced pricing tools to overcome economic volatility: Strategic Pricing: Thriving in Tumultuous Times

Frank Borovsky

Frank Borovsky

If (manufacturers) have a backlog of orders, then their ability to use pricing to increase their margins during this period is incredible. And I think you have to look at your customer base differently than you did before. Are there opportunities to do pricing in ways that you had not done before? I know that some companies are looking to do that, but have not yet made the move. I would urge them now to do that because if they're not, they're leaving money on the table.
- Frank Borovsky

Episode Transcript

Frank Borovsky: I've been struck, and I've asked this question a few times, particularly with sales leaders. I often say, “Hey, do you have a deal desk?” And oftentimes they say, “What's that?” I think having someone or a group of individuals who are focused in on optimizing margin and utilizing the right tools to do that, now is the time. It will pay off in spades.

Lindsay Duran: Welcome to B2B Reimagined. My name is Lindsay Duran, and I'll be your host for this episode. I'm joined today by Frank Borovsky, vice president, industry sales for manufacturing, auto, and energy at Salesforce. Welcome to the podcast, Frank.

Frank Borovsky: Thanks, Lindsay. Great to be here. I'm a real big fan of Zilliant, and always happy to engage with our ISV partners.

Lindsay Duran: Frank, before we dive into our main topics for today, I'd like to let our audience learn a little bit more about you. What is something people wouldn't know if they only looked at your LinkedIn profile?

Frank Borovsky: Actually, going to be tough. I leave a lot out there in LinkedIn. But one thing that I would like to emphasize [00:02:00] is there's a little band of geeks that work together and we try to help nonprofits here in Atlanta by doing data analytics for them.

And since this is the season of giving, I just want to shout out to one of those nonprofits, which is Enduring Hearts. And we've done some data analytics on their donors to help them do better research for children who are in need of replacement hearts. So it's a sideline that is just giving back to the community.

Lindsay Duran: What a great use of your data analytics skills. I absolutely love that, and it sounds like a great organization in Atlanta, so thanks for that. Frank, can you tell us more about your professional background and specifically your role at Salesforce?

Frank Borovsky: Sure. I just came to Salesforce as an employee about 18 months ago, but I've been a longtime practitioner in various roles in the both the [00:03:00] business and IT in a number of manufacturing companies over the last 20 some years.

So I've been with Honeywell, Eaton, Ricoh and Club Car where I was both the CIO and the Chief Experience Officer, and I was brought in as an investment in the manufacturing vertical just to help train our sales organization and to translate our Salesforce solutions using the words of the customer.

Because I've had the benefit of being a lot of the personas that Salesforce sells to. And so I like to say that I'm a customer advocate and a sales whisperer in the manufacturing space, and then I have a small team of colleagues with similar backgrounds who are both in automotive and in energy.

Lindsay Duran: Excellent. Well, we have quite a few listeners who are in the manufacturing space, so I'm sure they're eager [00:04:00] to hear you. Speaking of, you recently held the Salesforce Manufacturing Summit in Chicago, which Zilliant participated in and presented at with one of our customers. What were some of the highlights from the event, from your perspective, and what did manufacturers take away from it?

Frank Borovsky: Well, first of all, thank you Zilliant for your sponsorship and participation. It was a great event. It was modeled after a similar event that was conducted a few years back before Covid. And the intent is to have all of our relevant solutions, the clouds within Salesforce, but also our solution providers in the Salesforce ecosystem that are most relevant to the manufacturing space, including Zilliant.

And the concept was, let's get all of these folks together in one space and ensure that customers are hearing other customers about how they're [00:05:00] using the solutions. So there was less about thought leadership, if you will, and more about pragmatic use of the tools that were represented there. And the feedback on the sessions was great.

Less hype and more about hearing from the customers themselves. And we're really hopeful that we can replicate that event in other markets next year.

Lindsay Duran: I think it's so important attendees walk away with things that are practical and pragmatic and that they can go apply in their business.

I applaud you for your emphasis on the practicality of the presentations. I'm sure all of these attendees appreciated that.

Frank Borovsky: That's one of the things that I always appreciated when I was in the customer seat, was actually hearing, okay, well, what went right? What went wrong? What would you do different?

And we don't really get enough of that as practitioners. And so this was the forum to try to make that happen.

Lindsay Duran: Absolutely. I want to switch gears just a little [00:06:00] bit and talk about some of the commercial trends that you're seeing in the manufacturing space, and then let's discuss some of the, to your point, practical strategies companies can employ in 2023 to either capitalize on those trends or weather some of the hard times that may be heading our way.

Frank Borovsky: Well, one of the advantages of this role is I now get to see what a lot of manufacturers are doing across the entire United States and a lot of different industries, and it gives you a better view of that bigger picture.

Generally speaking, what you hear about are all the headwinds, and certainly there are plenty of those. So you still have supply chain disruptions, although in some sectors they are abating somewhat, but in other places they've exacerbated based upon things like the war in Europe. So it's not over, but it depends on what industries [00:07:00] you're in.

The other thing that you hear all the time is about forecasting and the ebbs and flows of demand. And I certainly know from my experiences that the S&OP or the demand planning process has been always difficult. No one seems to actually do it perfectly, but it's been especially difficult and it doesn't look like it's getting better anytime soon.

Clearly, and this is directly relevant in your patch, particularly is, you know, margin erosion due to inflation. And that's really changing the pricing scenarios, making pricing much more complex and potentially having to make many more changes than folks are used to. The number one issue though, I hear again and again over dinner and at these meetings is that manufacturers continue to have problems with gaining talent.

And when I first came on board in Honeywell [00:08:00] Aerospace, and that was 20 some years ago, that was the number one issue facing manufacturers as a whole then, and it's only gotten much, much worse. There's not a day that goes by that I don't hear someone from the C-suite talking about labor shortages, whether it's on the factory floor or in the office.

Everyone is short of qualified workers, so having employee engagement, retaining those employees is top of mind. And that also potentially means wage increases, which will further inflation if it's not quelled in some fashion in the next year or so. And as a result, of course, margins need to be amended for those as well.

So I the see the topic of pricing resiliency is going to be a key topic for the foreseeable future.

Lindsay Duran: Absolutely, and I do want to dive into that a bit more, but I want to go back to something that you said [00:09:00] about talent and on another recent episode of the podcast, I had a discussion that was more focused on the distribution industry and one of the topics that came up is with the layoffs that we've seen in the technology sector in particular now might be an opportune time for companies that have maybe struggled to recruit talent that went to a Google or a Meta type organization, might now have an opportunity to hire in some more technical talent to really help propel that digital transformation.

I think we're seeing that starting on the distribution side of the house. Are you also seeing that in manufacturing?

Frank Borovsky: It's interesting because that topic just came out last night, and so the answer is somewhat, so I say it cautiously only because there are a lot of tech folks out there and now I'm exposed to them a lot more than I [00:10:00] had been in the past who really aren't wired, I guess, would be the right answer for that type of change in profession.

Some are, and some are not. So I do think that folks who are in that mode of trying to pull folks from industry need to be very judicious in how they do that. That's always true of talent across the board, but you have to make sure that it's the right fit for both parties involved. But yes, I do think that we're going to see more of that, and I think that's very healthy for all of us.

Lindsay Duran: Absolutely. Let's come back to the topic of pricing resiliency. Tell me more what you mean by that and why that is perhaps more important in a downturn than when we're looking at boom times.

Frank Borovsky: So first of all, I see that in the coming, I don't know, let's say six months to a year, that we're going to really have a bifurcation of folks [00:11:00] that are going to, I say the haves and the have nots. And the haves are the folks that are going to continue to have an order backlog.

They're sitting on a lot of cash. They're potentially benefiting from the Inflation Reduction Act. Maybe they have an infrastructure play of some sort, and these folks are going to be opportunistic during this coming period. So they're going to be looking to pick up market share, buy companies, invest, and grow.

Those folks are actually in the catbird seat right now, and especially if they have a backlog of orders here, then their ability to use pricing to increase their margins during this period is incredible. And I think you have to look at your customer base differently than you did before. If you're in that position, you have to look at, you know, who are your best customers?

Have you actually looked at [00:12:00] customer lifetime value and looked at maybe that tiering of customers, platinum, gold, silver, et cetera? And are there opportunities to do pricing in ways that you had not done before? I know that some companies are looking to do that, but have notyet made the move. And I would actually urge them now to do that because if they're not, they're leaving money on the table.

Now, separate that with the have nots, and that's not meant as a derogatory, it's just that they're in a situation that they're going to need to hunker down in a downturn. And what they're going to be looking for are productivity plays, doing more with fewer people. And that, again, has an impact with regard to if you're going to make changes in the market, then you don't want to be doing that. Trying to make that all occur on a bunch of spreadsheets. You need [00:13:00] the right tools to make sure that your folks are productive and you're making the right decisions out there. So I think this is a tremendous opportunity to be re-looking at your customers, looking at your cost.

And looking at your pricing strategies overall and being more, I'm going to use the word resilient, than perhaps folks have been willing to be in the past.

Lindsay Duran: I think that's a great point. And one of the things that we're always emphasizing is that speed and agility and your ability to update prices faster in the market than you have ever before really does differentiate whether or not you're weathering this type of storm, right? Whether we're seeing that as a result of inflation or a recessionary environment. Let's dive in Frank and talk a bit more about the impact of dynamic pricing and manufacturing and where you see that headed.

Frank Borovsky: So I have seen a number of folks who [00:14:00] felt that in today's environment, it was sufficient to be looking at pricing maybe on a quarterly basis.

My argument would be, and I'm going to go back to the look at your customers first. If you are in that situation where you do have constrained supply, then you ought to be trying to optimize your customer base and your margins at the same time. The object should be to sell your widgets to the best customers first before anyone else, and then optimize the margin that you can get from those customers.

And again, if you're not doing that today, particularly in inflationary times, you're not really doing your shareholders justice. And I think the ability to be versatile. To be able to look at scenarios, to be looking at, I use tiers, but if you want to look at them in different fashions, whether [00:15:00] it's frequency of purchase or things like cost to serve, that sort of thing.

Look at the holistic customer base and look at them differently and treat them differently in your pricing scenarios. I think there's been no better time to do that and establish a base. and then wherever the economy takes us, it'll always be something that you can rely on. And the earlier you do it, the better off. It used to be years ago, I'm going to go all the way back to B School that, you know, we were told it was beaten into us…

“Don't change anything in pricing. Of all the five Ps, the one P you don't touch is pricing.” I would say quite the contrary. You should treat very product as though it were brand new, particularly in today's day and age. And you should be looking at all of the items that go into your pricing, including [00:16:00] the market dynamics, your customer base, et cetera, and start from scratch and work your way back.

Lindsay Duran: It’s very wise advice. It's certainly hard to do all of those things that you just described, Frank, if companies are using spreadsheets and emailing spreadsheets back and forth, and they haven't really invested in the technology in order to be able to become more dynamic in their pricing.

Frank Borovsky: Yeah. I've been struck, and I've asked this question a few times, particularly with sales leaders, I often say, “Hey, do you have a deal desk?”

And oftentimes, they say, “What's that?” I think having someone or a group of individuals who are focused in on optimizing and utilizing the right tools to do that, now is the time. It will pay off in spades.

Lindsay Duran: So Frank, Zilliant and Salesforce have a special partnership relationship. I'd love to hear more on your perspective on why our joint customers benefit so much [00:17:00] from that relationship.

Frank Borovsky: Yeah. This came up and it was the major theme of the Manufacturing Summit. Having the right partners in this ecosystem is crucial for folks who are looking to make a platform decision about their IT solutions. And folks like Zilliant are fantastic point solutions in their own right. So I've had the great fortune of seeing Zilliant from the inside out and looking at it from a customer's standpoint.

And I've been able to compare it with other folks that are out there and on its own it stands, you know, head and shoulders above the rest. But when you combine that with being on the Salesforce platform, which has advantages right off the bat, you've already got a cloud-based solution. It's updated [00:18:00] automatically three times per year.

And you don't have to worry about, you know, UAT and all that stuff that were headaches when I was in the IT world. But on top of that, the more that you use other solutions on the same platform, and we had many represented at the Manufacturing Summit. We used the example of, for example.

These folks when put together, you don't have to worry about ntegrations because you're sharing the same dataset and the more that you utilize more of these partners to do these point solutions, even to something as large as an ERP or a PLMA, product life cycle management tool. The more you use our ecosystem to leverage their solutions, you are saving yourself not only on the integrations, but on support [00:19:00] and ultimately even on licensing because there is a value on buying more and more on the exact same platform. And we had a number of customers who were actually on stage extolling the virtues of doing precisely that. There are entire manufacturing organizations that do everything from ERP to PLM to pricing to, you name it, eCommerce, all on the Salesforce platform and have nothing else.

Lindsay Duran: I think that's a great point on the efficiencies and the scale that companies can get. Frank, before I let you go and we close out the episode today, is there anything else that you'd like to leave with our listeners today?

Frank Borovsky: I think it's important whether or not you are hunkering down, your business is looking at productivity plays or if you're in that situation where you're being opportunistic during the coming [00:20:00] seasons ahead of us. So if you're looking at a productivity play, you know, being able to do more with the people that you have, utilizing tools like Zilliant and others, there are certainly opportunities to do that.

If you are in a situation where you haven't invested in the past and you're now trying to catch up in your digitization processes, now is the best time to be doing that. I see organizations that you know, are looking to automate their operations. They're trying to make it easier for customers to do business with, and they're trying to enhance the services that they're providing in addition to the product.

And they're trying to make data driven decisions. All of these are in the wheelhouse of Salesforce and our overall ecosystem. So I just urge folks [00:21:00] to be thinking about both Salesforce and the platform as a platform for growth, but also one for productivity in the times ahead.

Lindsay Duran: Well, thank you Frank.I appreciate you joining us to share your insights today, and I as well, hope you'll come back for another episode in the future. And I'd like to thank each of our podcast listeners for being with us today. Be sure to check out the show notes where we have included a link to a customer story from a building products manufacturer that used advanced pricing tools to overcome recent economic volatility, entitled “Strategic Pricing: Thriving in Tumultuous Times.”

If you'd like to discuss how we may be able to help solve pricing and sales challenges in your business, please reach out to us on Please also take a moment to rate and review the show as it helps us to continue to put out great free content. We hope you'll join us for the next episode of [00:22:00] B2B Reimagined.

Have a great day.

Are you ready to learn how Zilliant can help you overcome your pricing challenges?

Reach out to us today to learn how we can help!