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Steve Diamond Globalpraxis Group Johannesburg 9 October 2012

Building a Sales Improvement Program that Works. Steve Diamond Globalpraxis Group Johannesburg 9 October 2012. Sales improvement programs: Getting it right. Why do some programs succeed…while others fail badly? Engaging the organization Linking the marketplace to your internal activities

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Steve Diamond Globalpraxis Group Johannesburg 9 October 2012

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  1. Building a Sales Improvement Program that Works Steve Diamond Globalpraxis Group Johannesburg 9 October 2012

  2. Sales improvement programs: Getting it right • Why do some programs succeed…while others fail badly? • Engaging the organization • Linking the marketplace to your internal activities • Focusing on high impact opportunities • Balancing “art” and “science” • Driving effective attitudes and behaviors

  3. The sales improvement process must integrate these dimensions EXTERNAL SALES IMPROVEMENT PROCESS ART SCIENCE INTERNAL

  4. Document Security, Inc.: Entering a new market DSI

  5. DSI is looking to expand its business MARKET Current New PRODUCT Current New DSI “Physical” “Digital”

  6. Question: Do you think this story has a happy ending? • Yes, “digital” is now a thriving business • So-so, moving along but work to do • No, absolute disaster

  7. Question: Where’s the problem here? • The market • The channel • The product

  8. Question: Where’s the problem here? • The market • The channel • The product • All of the above

  9. Is this the CEO’s problem or the VP Sales problem? • CEO • Sales

  10. It’s an alignment problem… EXTERNAL INTERNAL

  11. …and DSI has no process for tying it all together EXTERNAL SALES IMPROVEMENT PROCESS INTERNAL

  12. DSI

  13. Art and science: the other two dimensions EXTERNAL SALES IMPROVEMENT PROCESS ART SCIENCE INTERNAL

  14. Art versus Science of performance improvement: What we find • Benchmarking • Pipeline analysis • Scorecards • Revenue and margin management Are you asking the right questions? Measuring the right things?

  15. Art versus Science of performance improvement: What we find • Training • Coaching • Joint sales calls • Building support at all levels Are your training and coaching efforts linked to the data you’ve gathered?

  16. Case study: DHL Express Asia/Pacific • 41 countries in Asia/Pacific region • 500,000 active customers • ~33% share of $17B market • Laboratory for the global business

  17. An intensely competitive market Total Revenue $42 B $60 B $65 B Express $21 B $20 B $15 B Int’l express S10 B $8 B $15 B Asia /Pacific $3 B $3 B $6 B A/P Country 40 40 41 presence

  18. DHL Express sales organization Global customers National and mid sized accounts Field Sales Small business

  19. The nature of competition: Moving up the stack • HIGH VALUE SERVICE • Buyer cannot define need or solution • Cannot assess providers’ expertise • Relationship > Transaction • Often maintain relationship beyond the need • RELATIONSHIP WITH SUPPLIER JUDGED BY • Trust, credibility, commitment, chemistry • SERVICE • Supplier choice both rational (price) and subjective (expertise, responsiveness, empathy) • Continuity of relationship key • RELATIONSHIP WITH SUPPLIER JUDGED BY • Reliability, consistency, competence • PRODUCT/COMMODITY • Buyer can evaluate • Transaction > Relationship • RELATIONSHIP WITH SUPPLIER JUDGED BY • Responsiveness to customer need Source: Jeremy Raymond, 2005

  20. DHL’s objective • “To become a world class sales organization: • Increasing the effectiveness of our sales operations • Standardizing our systems and processes • Building commitment at all levels of the organization • Setting an example for other regions • Creating “stickiness” with our customers • And boosting our revenue and margins”

  21. MEASURE SUCCESS Sales strategy: Not just at the corporate level DHL Express will win in the global marketplace because we will recruit, support, and retain one of the most knowledgeable and trusted enterprise sales forces in the world. VISION We will build a brand externally and internally that says, “The DHL Express sales force is the best.” MISSION MAINTAIN AND ENHANCE TRANSFORM • Know our markets thoroughly… • Build revenue using data-driven strategies…. • Model competences, attitudes and behaviors… • Excel at … • Align our channels … • Understand our competitors…. • Systematically gather and use customer data… • Give our people clear career paths… SUCCESS MEASURES Execute • We will grow 10% ……. • We will be the employer of choice….. • We will retain our best people…

  22. Sales improvement is a process Key Revenue Drivers Coaching Benchmarking SALES IMPROVEMENT PROGRAM Individual Measurement Key Improvement Areas

  23. Key revenue drivers: Retain, develop and acquire customers effectively and efficiently Efficiency & Effectiveness Customer Retention Sales Revenue Performance Customer Development Customer Acquisition

  24. Sales levers determine the success of these revenue drivers REVENUE DRIVERS SALES LEVERS Customer Allocation and Territory Sizing Optimizing Territorial Coverage Efficiency & Effectiveness Optimizing Skill Management Retain Down Traders Optimizing Re-activation of Lost Customers Customer Retention Capitalize on Up-Traders Country Sales Performance Improve Pipeline Strength Leverage Product (P1) Opportunities Customer Development Leverage Product (P2) Opportunities Yield Management Effective Lead Management Increase New Business Customer Acquisition Source: DHL 24

  25. Benchmarking highlights high impact opportunities Key Revenue Drivers Benchmarking Coaching SALES IMPROVEMENT PROGRAM Individual Measurement Key Improvement Areas

  26. Each lever can be measured by key performance indicators KPI CATEGORY Are There Enough Opportunities? Average Number Of Current Opportunities/Month SALES LEVER What Is The Potential Of These Opportunities? Average Value of Current Opportunities Improve Pipeline Strength Can these Opportunities Sustain Revenue stream? Current Opportunities as a % of Average Monthly Revenue % of Opportunities generated within last 60 Days? Current Opportunities 60 Days Source: DHL 26

  27. The premise: Shifting the curve The The “ “ Shift Shift ” ” The The “ “ Shift Shift ” ” Average Average Average Average Current Current Current Current Performance Performance Performance Performance Non Non Below Below Above Average Above Average High High Performance Performance Average Average Performance Performance

  28. Specifically, bringing up the performance of the bottom 60% Today’s average Today’s top 40% average Today’s top 40% average becomes tomorrow’s overall average

  29. Here, the sales force averages 3.5 calls/day versus 5 calls for the top top 40% Sales Executive 5.3 Quintile 1 Average Number of Visits Per Day 4.7 Quintile 2 4.2 Quintile 3 2.8 Quintile 4 0.3 Quintile 5 5.0Top 40% Average 3.5 Overall Average 45% Source: DHL 29

  30. A short detour: What do the top 40% do right? • For key performance indicators • Showcase most improved sales forces • Showcase best performing countries, regions, territories, etc. • >50% above target What did they do? What did they learn – best practices and pitfalls? Can these lessons be translated to other countries and markets? If so, how?

  31. A short detour (cont.): Addressing the low performers • If gap between top and bottom quintiles > 50% -- investigate immediately: management problem? • If bottom two quintiles more than 33% below target for two periods: probation and intensive coaching for managers and sales executives

  32. Scoring KPI/Category Sales Lever Average # new cust.//month Addressing acquisition quantity 11,894 8,312 1,385 7,068 23,789 16,624 14,136 2,771 24,936 35,683 21,204 4,156 47,578 28,272 33,248 5,541 Av. New customer rev/month Addressing new cust. quality Increase New Business New customer retention Addressing retention efficiency New Customer Rev. Retention Retention effectiveness Now, estimate the impact of closing the gap Incremental impact of closing gap by …* 25% 50% 75% 100% * Monthly impact per lever assuming 32 FSEs Source: DHL

  33. Scoring KPI/Category Sales Lever Average # new cust.//month Addressing acquisition quantity 11,894 8,312 1,385 7,068 23,789 16,624 14,136 2,771 24,936 35,683 21,204 4,156 47,578 28,272 33,248 5,541 Av. New customer rev/month Addressing new cust. quality Increase New Business New customer retention Addressing retention efficiency New Customer Rev. Retention Retention effectiveness Now, estimate the impact of closing the gap Incremental impact of closing gap by …* 25% 50% 75% 100% * Monthly impact per lever assuming 32 FSEs Source: DHL

  34. Benchmarking informs areas of focus Key Revenue Drivers Coaching Benchmarking SALES IMPROVEMENT PROGRAM Individual Measurement Key Improvement Areas

  35. Benchmarking assessments identify those sales levers with the greatest potential impact Country Sales Performance Optimize Customer Allocation & Channel Management Optimize Portfolio Sizing & Customer Coverage Optimize Customer Base Management Reactivate Down-Traders & Lost Customers Improve Opportunity Management (Pipeline Strength) Cross-sell More Effectively Enhance Yield Management Improve Lead Management Develop New Customers Increase New Customers Retention

  36. Three levers offer the greatest sales improvement opportunities Improving Efficiency & Effectiveness Customer Retention Customer Development New Customer Acquisition TOTALS 1 2 3 4 5 6 7 8 9 10 Customer Allocation (Channel Mgmt) Portfolio Sizing / Territory Coverage Managing Growth Drivers Re-activate lost & down customers Pipeline Strength Cross Selling Yield Mgmt Leads Generate New Customer Improve New Customer Retention Sales Levers Source: DHL

  37. Consider other dimensions as well Which ones will best support the company objectives? Which lever is the easiest to implement? Which lever will have greatest financial impact? Low High High Impact Ease of Implementation

  38. These decisions dictate market/country action plans Key performance drivers & action plans … A culture of experimentation drives behavior and performance

  39. An experimentation success story 17% 33% Asia-Pacific Market share Country “X” Market share

  40. Next, translate market priorities to individual scorecards Key Revenue Drivers Coaching Benchmarking SALES IMPROVEMENT PROGRAM Individual Measurement Key Improvement Areas

  41. Country priorities then drive individual scorecards Key performance drivers & action plans … … reflected in scoring: ’ Translating overall country performance into individual SM & SE performance: Source: DHL

  42. Scorecards focus on those KPIs that tie to the levers you have chosen Scoring KPI/Category Sales Lever Average # new cust.//month Addressing acquisition quantity Av. New customer rev/month Addressing new cust. quality Increase New Business New customer retention Addressing retention efficiency New Customer Rev. Retention Retention effectiveness Source: DHL

  43. Some thoughts about KPIs • Fewer is better • Tailor to the market • Avoid KPIs that overlap • For example, # of calls and # of opportunities • Refresh each year

  44. 4a 4b 4c 4d Front line sales managers and sales reps are rated on each dimension each month Source: DHL

  45. We find that individual metrics (KPIs) consistently predict revenue growth Source: DHL

  46. Metrics drive a culture of coaching Key Revenue Drivers Coaching Benchmarking SALES IMPROVEMENT PROGRAM Individual Measurement Key Improvement Areas

  47. Coach the Coach Session Sales Territory Session Joint Visit/Call 90 Days Coaching Cycle Levers,KPI based benchmarking & scoring Coaching: Where the “art” and “science” of sales management come together

  48. Translate overall country performance into individual Sales manager & Sales Executive performance Scorecards inform coaching activities Coaching Scorecard

  49. Joint Sales Calls Sales Exec Coaching Session Coaching and joint customer visits: 80% of Area Sales Manager’s job Coach the Coach Session Training COACHING CYCLE Complete skills gap checklist Source: DHL

  50. DHL establishes “must do’s”: the non-negotiables • Timely, accurate inputs • For area sales managers • Understand and “live” the coaching process • Learn “coach the coach” • Drive key KPIs • For sales executives • Participate in coaching • Focus on key KPIs • Overall “rules” (e.g., # sales calls per day) • Personal challenges (“red” scores)

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