This is a must-watch interview for Industrial Distributors.
In two short years, Emasal totally reengineered its entire front-of-house.
Two years ago they had 6 regional offices, each with its own sales and customer service representatives. And, two years ago, salespeople were commissioned, semi-autonomous operators, doing a mix of field and telephone work.
Today, Emasal has one central customer service team and one central internal sales team. They have a couple of technical field specialists in each region, but no salespeople. Oh, and salespeople today earn salaries only. No commissions!
Emasal made this transformation because, after 38 years, growth had slowed. They realized a new sales model was required. Achieving the transformation in two years required a herculean effort, obviously. It would be easy to imagine the executive team today, waiting with bated breath to see if this expensive and risky transformation will, in fact, generate the anticipated uptick in growth.
But there’s no bated breath. The results are already in. There were bumps in the road for sure, but Emasal was able to prove the efficacy of its new model in real-time, as the team was making the transition.
Here’s what the numbers say.
- In year one of the transformation, revenues rose by 19%
- In year two of the transformation, revenues rose by 17% (on top of the year-one increase)
- There was no increase in total operating expenses (including Ballistix fees), and no expenses relating to the transformation were capitalized
- The velocity of customer service transactions (quote generation, order processing, and issue resolution) increased significantly
- Only one senior person left the organization (but this departure had no adverse financial impact)
With this new model, Emasal’s requirement to open up a new region is a single, local, technical specialist. This is in contrast with the old model, where they needed an office, a general manager, and sales and customer service teams. This minimizes the risk associated with expansion and makes it possible to expand into regions that would otherwise have been too small to support their legacy model.
If all that wasn’t enough to make this story interesting, consider this.
Emasal is not based in the USA. The company is headquartered in El Salvador. And their “regions” are not different cities, they are different countries! (El Salvador, Costa Rica, Nicaraguaua, Panama, Honduras, and Guatemala.)
If you think it’s hard to sell the idea of moving sales inside in the USA, imagine how hard it is to sell this concept in Central America. (Justin, you don’t understand, we have a Latin culture here!)
In case you’re wondering, Emasal sells packaging machinery and consumables to (primarily) food and beverage manufacturers.