Applying Process Improvement to the “Art” of Sales

1. Applying Process Improvement to the “Art” of Sales

2. Air Products University • Reduce L&D costs in support of organization objective to achieve 13% (RONA) Return on Net Assets • Organized L&D by colleges that align to organization core processes • Created Shared Services organization

3. Sales Training • Complex selling process at Air Products • From selling tanks of oxygen to entire gas production plants that are built on client’s site • Sometimes long sales cycles managed by deal teams • Doug Timmel - College Leader for Sales • Analyzed the sales process and began to align L&D needs to sales process steps • Discovering how to apply L&D as a continuous improvement mechanism to improve the sales process

4. Applying Process Improvement to the “Art” of Sales Case Study: Air Products and Chemicals Douglas Timmel February 16, 2006

5. Fast Facts • Global gases, chemicals, equipment and servicesprovider • Serving customers intechnology, energy,healthcare and industrialmarkets • Fortune 150 company -- $8B sales • Chemical industry safety leader • Geographically diversified, with half of our sales outside of the U.S. • Operations in more than 30 countries • 20,000 employees worldwide • Known for operational and business process excellence. • 15 Different Sales Organizations, 17 SBUs

6. What Is A Sales Process? The Gartner Group defines a sales process as the “Critical steps in selling linked together …[to] … provide the common framework, vocabulary and metrics for how sales organizations review and analyze territories, accounts, opportunities, individuals and sales cycles…”

7. Why Focus on Sales Process? • A well-managed sales process helps to improve visibility, predictability, consistency, scalability and sustainability, which often translates into a competitive advantage. • The reality is that selling in today’s complex environment requires a coordinated effort and team approach, making a standardized sales process all that more important. • Training must support competency development, which must support process improvement, which lead to better sales performance.

8. The Problem…. • The challenge for all sales organizations is to grow revenue in a predictable, consistent manner and sustain performance over an extended period of time. • The Sales Manager’s challenge is to improve the effectiveness and productivity of the Sales organization so revenue and margin DO increase. How to do this in an increasingly difficult Sales environment?

9. The New Selling Environment • Increased competition with lower cost basis • Consolidation of Purchasing companies • Buying Decisions by committee and moving up to the “C” level to make final decisions • Transparency of information • Same number of Suppliers and competition intensifies • Opening up new markets and establishing a sale presence where a history of sales processes is not established. • Pressure on Cost of Sales • Increased emphasis on Supply Chain Efficiency

10. The Selling Environment has Changed...Does Sales have Skills • To Sell at the “C” level? • Understand and be able to “Sell into” a customers Value stream? • Have a discussion with the customer on how the offering may affect the customers financial performance? • To be able to sell to a purchasing committee with many buying influences? • To sell into complex, global accounts with multicultural buyers with different expectations? • Be able to sell (and keep) price increases in a very dynamic cost environment? • To understand the cost impact of supply chain and service levels, and the vale of forecasting ? • To understand the Value of a robust sales pipeline?

11. By Implementing a Single Sales Process and Training Approach • Improved and standardized sales pipeline, with clear visibility and forecast accuracy. • The ability to replicate and scale best practices and learning across the organization. • Improved communication, cooperation, coordination and, resource allocation. • Improved win rates and sales velocity • Lower cost of sales and sales training • Common assessment of competencies • New hire training ramp up time and an accelerate ROI payback period. • Increase in sales productivity and effectiveness.

12. Case Study How Air Products Implemented Sales Process and Results

13. Key Business Issues for AP • All the same challenges facing other selling organizations, • No Alignment of Sales Processes • Many sales processes, little documentation • No holistic or consistent Sales Training approach, all training “ad hoc” at SBU level • SAP “Steamroller” created a burning deck • Connections from SFA/CRM tools “broken” by move to SAP • Lost visibility of customer data • Previous systems were a myriad of CRM applications

14. Our Path…….. • Implementing SAP provided the opening to define a single sales process for the company • Sales Process was established and agreed • Established an Enterprise Approach and converged on crucial decisions such as opportunity stages and corporate metrics. • Tool was chosen to help measure KPIs and become shared vault of “customer knowledge” • Agreed to begin a single, global, Sales University where all Sales Managers could send their salespeople, agents, distributors.

15. The Selling Process at AP Two Distinct Sub-Processes • Find and Win Customers – Leading Indicators • Provide an Indication of future success • Retain Customers – Lagging Indicators • Provide Revenue and Profits to the Company • Provide the Forecast to the Supply Chain • Supply the correct inputs for Perfect Order Fulfillment

16. Level 3 Process“Find and Win Customers” Inputs to SELL Market model Offerings (from INNOVATE) Business objectives Output to FULFILL Valid and viable customers Process Steps 1 2 3 4 5 6 7 Identify Opportunities Develop Relationship Review Requirements and Engage Organization Develop and Submit Proposal Obtain Commitment Establish or Modify Customer Account Process Contract Information Outputs to Next Process Step leads / sales target list prioritized list of qualified leads decision to offer or not proposal in hands of customer agreement to do business approved customer account contract data input to SAP relationship confirmed customer requirements configured offering Move Data to SAP Needs Assess Leads Qualify Proposal Close P Neg.

17. Enterprise Process = Enterprise Tool • Business Rules Can Drive the Process • Sales force automation tool Overlays the Process & Allows for Business Rule Inclusion All Businesses use the SAME Stage field!

18. % Leads Becoming Prospects Revenue Potential from Prospects Revenue potential in pipeline A) By Salesperson B) By Segment Number of Customer Touches A) By Segment B) by Time Period Sales Cycle Time on New Opportunities Won/loss % on new opportunities % Contract renewals AP Leading Indicators Align to “Find and Win Customers”

19. Examples of Leading Indicators • Customer Touches • Increase of 72% from May through August! • Opportunity Pipeline Stage Analysis • First time we have analysis across company

20. KPI – Won vs. Loss %

21. Sales Cycle Time – by SBU

22. CEO Dashboard

23. Examples of Level 4 Processes for “Find and Win Customers” Find and Win Opportunities... Identify Opportunities Develop Relationship Review Requirements and Engage Organization Develop and Submit Proposal Obtain Commitment Establish or Modify Customer Account Process Contract Information Create leads ● Build awareness in the marketplace ● Collect leads ● Validate leads ● Distribute leads ● Act on leads ● Collect data on lead quality and quantity Pre-Selling • Build personal marketplace recognition • Establish / expand marketplace contacts • Discover needs • Understand needs • Understand buying habits • Identify decision makers • Build relationships • MAKE SALES CALL • Screen opportunities • Evaluate competition • Match offerings / capabilities to customer need • Create interest in offering • Support customer’s RFQ creation • Respond to RFQ • Prepare / engage organization for offering development • Develop cost estimates (link to CIA processes) • Approve pricing and proposal • Prepare proposal documentation • Submit and present proposal • Solicit feedback on proposal • Negotiate • Analyze and revise offering • Develop contract • Close • Collect feedback on won / lost orders • Develop lessons learned • Approve project • Complete documentation • Complete, review, and approve customer information in workbook • Recognize / reward success • Document contract information in workbook

24. Find and Win Level 4 Processes Drive Behavior and Outcomes Make Sales Call Skills needed: Pre-call planning Setting appointment Opening statement Probing Training required: Sales call Methods Questioning skills Listening skills Key Outcome: Process Definition and need to Drive Continuous Improvement has Allowed AP to Justify a Sales University

25. Level 3 Process“Retain Customers” Inputs from SELL Of a WON CUSTOMER Output to Fulfill Valid and viable customers Output to Supply Chain Demand forecast Process Steps 9 9 10 11 12 13 14 Segment Customers Monitor Segment / Customer Performance and Feedback Analyze Gaps and Engage Organization Authorize and Plan Improvements Implement and Control Improvements Modify Customer Account Forecast Demand Outputs to Next Process Step customers in segments financial performance improvementopportunities actions, changes, and expenditures improvedfinancial performance customer data / segment changes demand forecast for Supply Chain service performance improvedservice performance contract data changed in SAP Results Improved customer loyalty Improved segment performance Obtain Revenue and Margin

26. Examples of Level 4 Processes“Retain Customers” Manage Customer Experience Segment Customers Monitor Segment / Customer Performance and Feedback Analyze Gaps and Engage Organization Authorize and Plan Improvements Implement and Control Improvements Modify Customer Account Forecast Demand Input from… • Customer Loyalty measures • Customer Complaint process • Periodic performance assessments • Feedback from on-going customer relationships • Mass price changes • Determine need • Develop plan • Execute • Account planning • Modify commercial terms, mid-contract, such as… • price changes • hardship issues • force majeure • improvements • cost reductions • term extensions etc. • Negotiate • Close • Develop lessons learned • Complete documentation • Complete, review, and approve customer information in workbook • Recognize / reward success

27. Revenue Attainment / Growth A) year to year change B) actual total revenue Actual New Business Profitability A) by sales territory B) by customer C) OR by account Wallet share A) by customer B) by territory Price Increase Effectiveness ( within a customer or a territory) Customers Segmented based on Value/Return Inputs to Perfect Order Fulfillment Lagging Indicators Align to “Retain Customers”

28. The Results at Air Products • Enterprise Sales Process, Enterprise Design • Business Rules drives the process • Insight into Leading indicators of Success & Performance for the Entire company • Leading Indicators can be tied to Lagging Indicators • Visibility of customers across the Enterprise • One Tool for the entire company • Have a base to now measure continuous improvement and a justification for establishing a budgeted Sales University for Training

29. Process Improvement is Dependent on Training • Process Steps identify the critical measures. • Ability to measure the Process Steps indicates speed to execute, efficiency of execution, identification of best practices • Knowing the Process Steps and metrics allows identification of critical activities and competencies to be continuosly improve. • Competencies can be established and training defined to allow Sales to execute the process steps faster and more effectively. • The Process improvements can then be measured and tracked in Dashboards.

30. Effectiveness Efficiency Productivity Right Markets Shorter Sales Cycle Higher Profits/ Sales Rep Right Customers Higher Sales Closes Faster Growth Right Message Faster Prod/Offer Dev. Market Share & Brand Right Product/Feature Faster Response Time Customer Loyalty Right Competence/Skill Quality Prod. Delivery Better Products/Service Right Process/System Cost Effect. Supply Chain Better Capital Control Having and Executing a Sales Process Effectiveness X Efficiency = Productivity

31. Benefits for Air Products • Unexpected cross selling opportunities • One unified Sales Training approach tied to Process and measurable with defined metrics. • Global visibility on accounts • Better forecasting for all of Air Products • Better overall competitor assessment • Reduced cost of sales and sales training • Greater Sales Productivity • Eliminated many administrative tasks/costs • Better direction to spend on Marketing funds as can assess return on leads. • Expect shortened sales cycles • Better Alignment of Rewards with Performance • Better allocation of spend to customer segment and specific customer opportunities

32. Conclusion • Organizations that effectively align and leverage their people, process, training and technology assets are likely to sustain competitiveness over organizations that lack standardized sales processes and a consistent sales training approach. • If you have defined your winning sales processes but have yet to embody these best practices into your company, consider a solution that aligns process to measurements and forms the basis for assessment and training.