A while back, a few subscribers expressed interest in hearing stories and results from the field.
Well, we just finished a project with manufacturer of food products (sold through supermarkets, convenience stores, pharmacies, etc) and the results have been both interesting and indicative of our methods.
This manufacturer has a team of salespeople, distributed across Australia.
When we started the project, salespeople were responsible for both business development and account management.
(Business development involved the acquisition of new accounts and selling new lines to existing ones. Account management involved taking repeat orders.)
The firm had just spent a king's ransom on an enterprise CRM system, but the quality of management intelligence provided by this system was poor as a consequence of inconsistent and inaccurate data entry by salespeople.
Salespeople were generating about $250 a day in sales. The greatest percentage was re-orders. Some, was the initial sale of new lines and a negligible percentage was a consequence of account acquisition.
Here's what we did:
- Provided salespeople with sales coordinators (one sales coordinator for every two salespeople). These sales coordinators manage salespeople's diaries, make their appointments, and do all their data entry and report generation).
- Built an internal (phone-based) account management team. This is primarily an outbound team (80% of calls are outbound). The team's objective is to secure repeat purchases from accounts. We built a call scheduling tool to rank accounts for team members based upon estimated next order value. This tool also calculates the opportunity cost of calls that aren't made (due to finite capacity).
- Focused salespeople (almost) exclusively on business development. When our client has new lines, salespeople sell these lines into existing accounts. At other times, salespeople focus on new account acquisition.
Here are the results:
- Each internal account management team member generates almost 10 times the volume of a field salesperson. (Account managers generate about $2,200 a day in repeat purchases.) The team has also proved effective at selling new lines into remote accounts.
- Salespeople still generate about $250 a day in sales. However, the greater percentage of these sales are either new accounts (initial purchases) or new lines to existing accounts. Now, because each of these sales is the first transaction in an annuity, this figure has to be grossed-up by a factor of 10. Accordingly, the net-present-value of salespeople's activities is now $2,500 a day.
- Because all data entry is performed by the sales support team, data integrity is now sound.
- Our Sales Process Intelligence tools schedule tasks for sales coordinators and account managers. They also provide management with key performance indications, including a visual indication of queue sizes and run charts that can be used to monitor team members' protective capacity and Throughput per constraint unit (appointment slots consumed). Our tools also monitor the integrity of data entered into the CRM.
Obviously, the increase in Throughput has been significant. Operating expenses increased, due to the addition of about 8 sales support personnel, but this increase in OE consumes only a tiny percentage of the incremental Throughput.
