A Practical toolbox for Industrial Products Sales Management

Terence WongApril 2013

Tools for customer portfolio and sales management

• Step Sales method• Customer base portfolio analysis• Customer development• Customer Ranking and Priority mapping• Key Account template• What do customers want and what to sell

Step Sales Method

Customers come and go

• Maintain a healthy pipeline of customers, not just depend on regular repeat sales

• Goal of sales team is to generate new leads, push them up the sales ladder until achieving majority of customer’s purchase budget

• Maintain customer purchase level• Start pushing new customers up the sales

steps

Customer Selling life cycle客户销售的生命周期

Gather Customer Info

信息收集

1

Not confirmed customer

未确认客户

2

Make first vist

第一次访问的客户

3

Customer visited

客户访问

4

Customer quoted

未确认

客户报价

5

Customer buying some

0-50%

小部分客户买卖量

6

Customer buying most0-50%大部分客户买卖量

7

Customer buying all

>70%

所有客户买卖

8

Customer dead

客户不再买卖

0

• Important to evaluate, measure and know what is the potential sales value of your customer portfolio

• Categorise all your current customer portfolio into which step they below

• After categorising your customers into which step and what is the value of current actual sales % vs their potential sales, then you can analyseyour customer portfolio and make necessary decisions

Customer base portfolio analysis

Under developed portfolio

20%

40%

20%

15%

5%unqualified customersPotential customers not buying yetcustomer buying somecustomer buying mostcustomer buying all

Customers mainly unqualified,not buying yet,a lot of room to grow,but sales unstable because nohigh value repeat customers

Diversified portifolio

20%

20%

20%

20%

20%

unqualified customersPotential customers not buying yetcustomer buying somecustomer buying most

customer buying all

Diversified customer baseMix of incoming potential newcustomers,repeat customers with room toexpand future salesMature loyal customers buyingmainly from you

Mature portfoilo

5%5%

10%

20%60%

unqualified customersPotential customers not buying yetcustomer buying some

customer buying mostcustomer buying all

Mature customer baseNO Mix of incoming potentialnew customers,NO repeat customers with roomto expand future salesMature customers with littleroom for future sales growth,high risk of sales drop fromloss of customers

Customer development

Qualifying stage (knowing the customer - 1)

Person responsible – Sales personReporting to - Regional sales managerMonthly Review – Country Manager + BD Manager

What does the customer manufacture?

Description of the products Provide details of the various products not just generic names, we need to know the specifics). If you cannot describe, we need pictures.

Brand names

Specification information describe the type

Time limit – 1 month

• Who are the main competitors supplying into this plant?

– Names and supply channel (direct/distributor)

– Key criteria for buying • Price : Specific pricing information with competitor product type

• Quality: European, local, etc.

• Supply conditions: Existing contracts, Consignment stock, servicing, response time, etc.

Qualifying stage (knowing the customer-2)

�Time limit – 2 months

Person responsible – Sales personReporting to - Regional sales managerMonthly Review – Country Manager + BD Manager

Qualifying stage (knowing the customer-3)

Person responsible – Sales personReporting to - Regional sales managerMonthly Review – Country Manager + BD Manager

Have you been inside the plant?

If yes what is the outcome - do you know what the ke y equipment details and key types they are using? (Need specific details not thickness or generic detail If the customer cannot give competitor types, then we need to know the functional surface details and detailed applicatio n

information)

If no, when ? need to define this date and set a ta rget to exit this customer from the list if sales person cannot make an entry into the plant – this decision to be taken by Country manager in consultation with Regional sales manager.

Do you have rough estimate on the total installed belts?

Do you have a rough estimate If not, set a deadline !of the potential offered by this plant?

Time limit – 3 month

Conversion stage 1 (creating opportunities for sales)• Have you identified the Key person in the ordering process? If yes, provide

details of his background. If no, when do you intend to obtain this information – set a clear deadline.

• Do you know the ordering process? If yes, clearly define the various stages. If no, when do you intend to obtain this information – set a clear deadline.

• Do they have any ongoing projects or projects in the pipeline? If yes, do you know who is in charge of project management and design?

• Have you checked with Segment Manager for references that you can offer to customer to create confidence in our products?

Person responsible – Sales personReporting to - Regional sales managerMonthly Review – Country Manager + BD Manager

Time limit – 5 months

Conversion stage 2 (generating the first sale)

• Do you know of any problems that the customer is currently facing with his materials? If yes, coordinate information with Regional Segment Manager and offer our alternative.

• Do you know of any application where the customer requires improvement in terms of production and/or better maintenance/savings in wastage? If yes, coordinate with RSM and offer alternative.

• If both the above questions have been answered no, then coordinate with RSM any improvements or success stories in other markets to generate a risk free trial order for customer.

Person responsible – Sales personReporting to - Regional sales managerMonthly Review – Country Manager + BD Manager

Time limit – 7 months

Consolidating stage (growing the business)

• Have you obtained a clear reference on a successful trial? If yes, have you received a commercial enquiry for purchase of similar or other material in the plant? If not when are you expecting this? Set clear deadline for this.

• Have you identified areas that will require immediate or near future replacements? If yes, have you planned on stock and service issues? If not, when are you expecting to identify the next decision cycle?

• Have you identified all the different types in the plant? Do you have a plant survey? If no, when do you intend to create this plant survey? (deadline to be set).

• Confirm the total annual sales potential and critical stocking requirements for the customer. (set deadline)

• Establish a follow-up schedule to ensure the sales consolidation is effective.

• Identify any new product developments required for the customer.

Person responsible – Sales personReporting to - Regional sales managerMonthly Review – Country ManagerAnnual Review - Country Manager + BD Manager

Time limit – 9 to 12 months

Customer Ranking and Priority mapping

Customer Ranking

• Quantitative Customer ranking by Sales Value, Actual and Potential

• Qualitative Customer Scoring• Goal is to rank and assess all customers

in portfolio on consistent basis

Quantitative Customer Scoring

Customer Sales Value Score

Potential/ActualSales Value

Cut off point

4 65% of all salesAverage 3 year Lowest sales value of customers to make up top 65% of sales

3 20% of all salesAverage 3 year Lowest sales value of customers to make up next 20% of sales

2 10% of all salesAverage 3 year Lowest sales value of customers to make up next 10% of sales

1 5% of all salesAverage 3 year Lowest sales value of customers to make up last % of sales

Accessible Potential Sales Value

Potential Sales K'USD

Point Score

List all Customer >5,001 4List all Customer 2,001-5,000 3List all Customer 501-2,000 2List all Customer <500 1

Current Net Sales Value

Actual Sales K'USD

Point Score

List all Customer >5,001 4List all Customer 2,001-5,000 3List all Customer 501-2,000 2List all Customer <500 1

Qualitative Customer ScoringPrice Quality Point ScoreHighly Price sensitive/Low Margins/High discounts

4

Medium Price sensitive/Medium Margins/Medium discounts

3

Normal Price sensitive/Normal Margins/Normal discounts

2

Not price sensitive/High Margins/Low Discounts

1

Customer Quality Point ScoreVery Low maintenance 4Below average maintenance 3Above average maintenance 2Very High maintenance 1

examples of Maintenance factorsfrequency of Onsite service requirementsfrequency of Customer Service contactsCustomer product complexity

Customer type Point ScoreMultinational Accounts 4National Account 3Large Regional Account 2Regional Account 1

Weighted Customer ScoringFactor Cateogry Weighting Point Score Cust XX

1 Recent/ current net sales 15% 4 0.6

2 Accessible customer potential 35% 4 1.4

3 Customer type 20% 4 0.8

4 Price Quality 20% 4 0.8

5 Customer Quality 10% 1 0.1

100% 3.7

Reference Customer Weighted Score

Customer Rank

3-4 A

2-2.99 B1-1.99 C

0-0.99 D

Scoring all customers using consistent point evaluation allows rational Customer Ranking

Facilitates rational allocation of sales and supply chain resources to develop/maintain customers

Customer priority mappingCustomer rank A B C DOur share of customer business

Customer buying all (>70%) 2 3Customer buying most (50-70%)

Customer buying some (30-50%)

Customer not buying (<30%) 1 4

More focus on sales and business development to win account 1More focus on Supply Chain management/Customer satisfaction to maintain account

2

Loyal repeat customer, maintain account 3Low priority customer 4

Time spent on customer

Resources spent on customer

Customer rank based on importance of customer, eg Point Score System reflecting

Sales Actual vs Potential

Global KA to local account

Other qualitative factors as decided

Key Account template

Customer Key Account (KA) process

Analyse and Identify分析与定义分析与定义分析与定义分析与定义

Set KA overall objective设定设定设定设定KA的总体目标的总体目标的总体目标的总体目标

Execute action plan执行计划执行计划执行计划执行计划

Review回顾回顾回顾回顾

Analyse and Identify•Assess position

•Develop/Update KA•Re-evaluate KA classification

•Complete KA profile

Set KA overall objective• Define KA strategy

• Set KA goals

• Implement KA objectives• Create KA plan

• Develop action plan

• Determine resource requirements Consolidate and assess KA portfolio Finalize and approve KA plan

Execute action plan•Identify new opportunities

Review• Evaluate

• Assess

• Measure• Modify

What do customers want and what to sell

What do customers want?

what customers want is piece of mind that they have reached the right decision in

buying your product and feel they have paid the appropriate price.

What are you selling??• Sell Yourself (or Giving the customer peace of mind of

dealing with you!)

• Sell the Company (or Giving the customer peace of mind of dealing with the company!

• Sell the Product (or Giving the customer peace of mind of using our product!)

• Sell the Price (or Giving the customer peace of mind for paying your price!

Sell Yourself (or Giving the customer peace of mind of dealing with you!)

• Appropriate professional appearance, • Personal industry, product application

expert knowledge• Knowledge of competitors products, pricing• Personal preparedness with samples,

sales kits, customer sales history• Personal integrity, reliability of personal

service

Sell Yourself (or Giving the customer peace of mind of dealing with you!)

• All selling starts with your Sales representative, he/she is the face and mouth of the company to the customer, no matter how good the company, product, price is, if the customer’s staff can’t stand the sight of your representative, your sales is going tobe ZERO

• The best salespeople give customers confidence that they would get the best service and advice.

• The sales rep exudes personal professionalism and makes the customer feel less stress dealing with them, knowing that they can bring whatever issues to them and the rep will take care of it.

• The rep shows personal expert knowledge in the products and awareness not just of the product, but about the value the customer expects from it.

• The rep cares about the customer’s experience of the product and whether the product is meeting their expectations, if not, then what should be done to improve it.

Sell the Company (or Giving the customer peace of mind of dealing with the company!

• What we stand for• What service, quality, know how compared

to competitors• How we stand behind our products and

service 100%

Sell the Company (or Giving the customer peace of mind of dealing with the company!

• After the sales rep has convinced the customer to accept him/her as a person to do business with, then next is convincing the customer why your company is better (or will provide better value) than the competition.

• The sales rep should show the full strength of the company stands behind him and the product, from research and development, product literature, technical software, service network, availability of inventory and spare parts etc

• The sales rep has to show not just personal passion, but also show that the company stands behind the product 100%, that whatever happens, the company will do right by the buyer, for example replacing the defective part, showing up promptly to service the defective product, sticking by the customer until the customer is satisfied the product is working

• A company’s reputation is built up one product at a time, one customer at a time, but it is lost lost with just one customer badmouthing your company to other users of your product.

Sell the Product (or Giving the customer peace of mind of using our product!)

• Our product USPs and Strengths vs the competiton

• Our products performance quality and reliability vs the competition

• Development, Quality efforts going into the product

Sell the Price (or Giving the customer peace of mind for paying your price!

• Why we are higher than the competition• Why the customer should pay for all of the

previous as a premium to competiton

Price negotiation trap

Sell the Product 10%

Sell the Price 90%

Sell the Price 10%

What customer’s want What we want

Sell yourself 50%

Sell the product 20%

Sell the company 20%