After sales,a business opportunity

Gonzalo Pérez Ruiz / Alfa Consulting São PauloJorge Diezhandino / Alfa Consulting Mexico City

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After sales,a business opportunity

Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. The key: identifying opportunities . . . . . . . . . . . . . . . . . . . . . . . 3 2.1. Product-focused opportunities . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.2. Customer-focused opportunities. . . . . . . . . . . . . . . . . . . . . . . 4

3. Improving e�ciency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.2. Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.3. Management system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.4. Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4. Increasing sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.2. Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.3. Management system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.4. Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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1. Introduction

2. The key: identifying opportunities

We have all heard some variation of the phrase: “It costs more to make new customers than it does to keep them”. However, organizations should ask themselves if they really devote the same e�ort to �nding new customers as they do to looking after those they already have. The answer in many companies is a de�nite “no”.

We can �nd many references to marketing or sales from a more general perspective, given the often extraordinary amount of e�ort and resources used to make new customers: advertising campaigns of all kinds, business intelligence, new technologies, applied psychology and so on. However, �nding references to the area of after sales in the �nancial media, professional forums, or even specialized blogs is not as common.

When we take a look at what really goes on inside companies—and particularly at how to increase their pro�ts—we often see great opportunities for improvement within the area of after sales service. This is for a very simple reason: after sales service is the asset that allows us to optimize our relationship with customers over the long term, which then improves the quality of our products or services.

After sales service is a key element for many companies. Every time a sale takes place, we have the opportunity –or the obligation, depending on how you look at it – to o�er customers a service. By taking advantage of this opportunity we gain a better understanding of our customers’ needs and motivations.

In fact, from this perspective, a sale is a process that never ends.

After sales strategies can be divided into two types. The �rst are activities focused on the product, which we call technical services. The second type are activities that focus directly on the customer, which are purely sales-oriented.

The objective of after sales service is to build a relationship of mutual trust and knowledge with our customers in order to ensure their continued satisfaction. By moving from a reactive strategy to a proactive strategy, we improve customers’ experience with our product or service. At the same time, we generate new sales opportunities.

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2.1. Product-focused opportunities

2.2. Customer-focused opportunities

Some examples of opportunities focused on the product or on technical support are:

• Product installation: operations required for product setup are often the �rst point of contact with our customers and therefore can de�ne their �rst impression of us. These can also be a way to identify new sales opportunities.

• Repairs: these services may or may not be included in the initial price. In terms of opportunities, here we can establish di�erent types of contracts with di�erent levels of coverage or options in order to meet the needs of customers in various market segments.

• Periodic maintenance: periodic visits to keep the product in good working condition give us an excellent opportunity to continue improving our relationship with the customer. These can include for example systematic inspections, cleaning, or part replacement. Through these visits, we can continuously demonstrate the quality of our service and the added value we o�er the customer. They are also another excellent chance for us to identify new sales opportunities.

We can see then that technical services o�er us an excellent opportunity to develop and improve our relationship with our customers.

Among the customer-focused opportunities or business services opportunities, here are some examples:

• Complaint management: this can be a decisive point, as customer satisfaction is at stake when we are dealing with any complaint about the product or service. Sometimes this can be the di�erence between keeping a customer and losing one.

• Training in the use of products: in this case the service must be simple and personalized in order for the customer to get the most out of our product.

• Promotional campaigns: these include strategies such as mailings, discounts, o�ers or free shipments, to name a few. These are campaigns tailored to our customers, with an emphasis on segmentation. The opportunity in these cases is to be able to relate them to the rest of examples already analyzed.

• Loyalty: �nally, and perhaps most importantly, all actions aimed at customer loyalty are the key to making the customer aware of our interest in them and to �nding out how we can improve. We have a number of tools available for this purpose, such as surveys, applications for further information, or periodic visits.

We can see then that by using strategies focused on the customer as well as those focused on the product we can increase the e�ectiveness of the after sales area, maximize its strategic position within the company, and generate more pro�ts.

However, the real key to a company’s success lies in its ability to develop solutions that are creative enough to involve both lines of approach at the same time.

We will analyze this below.

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Analysis of the starting position is crucial for the identi�cation of opportunities and the development of solutions to increase e�ciency. This analysis can be based on four basic pillars: the organization, processes, the management operating system and training.

3. Improving e�ciency

Technical services are normally labor-intensive. The key to increase e�ciency is to optimize the quality of the service and the cost structure. It is therefore essential to achieve an optimum orientation of middle management in how they supervise these teams, which are usually o�-site. There is often a great deal of improvement to be made in how time is allocated for the daily activities of the technicians providing the service.

In order to make the methodological approach more realistic and more illustrative, we will look at an example of the opportunities for improvement identi�ed in an after sales maintenance service network. We will then highlight the most basic aspects that should be evaluated in each of the four pillars:

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Once the diagnosis has been made, a series of opportunities are identi�ed, quanti�ed and prioritized. The impact vs. complexity analysis facilitates the decision-making process concerning what actions to carry out and when to do so.

3.2. Processes • Development of a preventive maintenance plan

- Definition of work orders

- Design of maintenance sheets

- Proper quantification of time allocated

• Alert reception

• Route planning

• Job assignment

• Materials ordering and delivery

• Other important processes

3.3. Management system

• Planning

• Work Planning

• Resources Master Plan, adapted to workload

• Establishment of management indicators

• Short/medium-term business and productivity reports

• Operational meetings

3.4. Training • Training of middle managers, focused on the optimization of their ability to manage teams.

• Training of technicians, focused on the maximum quality of service to the customer, in an e�cient manner.

3.1. Organization • The organization’s internal dedication to each activity (according to the hierarchical levels and the added value of the tasks), along with the evaluation of the current time allocation.

- Technicians

- Middle management

- Back office…

• Budget managed by each middle manager

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++

_

_

A work plan is thus de�ned based on these four pillars, in order to increase e�ciency in after sales operations. Here is an example:

Ease

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Impact ($)

Increase in productivity of Corrective Maintenance teams

Improvement of supply e�ciency

Reduction and elimination of administrative tasks Highly attractive but complex

opportunities

Attractive and easy opportunities

Largely unattractive and highly complex opportunities

Easy but less attractive opportunities

Preventive Maintenance e�ciency

Stock reduction

Optimization of purchasing process

Improvement of invoicing circuit

Reduction in the number of incidents

Take better decisions- Transfer budget objectives to operating

indicators - Adapt business forecasts to resources- Provide daily indicators for easy monitoring

of the business - Carry out weekly operational follow-up - Continuous improvement

Revise and unify functions and responsibilities- Give priority to activities with greater added

value- Set homogeneous workloads for equivalent

positions - Allocate supervision, sales, and management

tasks reasonably

Strengthen necessary skills and knowledge- Technicians: completion of process sheets

and checklists- Middle management: leadership and

change management, Action Models, Management Operating System

Maximize the Added Value of daily processes - Increase the value of the technician’s

inspection procedure - Optimize routes - Assign alerts optimally and ful�ll them - Improve maintenance execution quality

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4. Increasing sales

On the other hand, there is great potential for increasing sales. From a purely sales point of view, after sales service has its own characteristics, which, developed in the correct way, allow us to distinguish very clearly between companies that are excellent at it and those that are not.

To start o�, we need to know the market and our own portfolio. This shows us how we are developing, what our customers value and how to create appropriate value propositions. We must also de�ne adapted pricing criteria, not just in relation to the market, but adapted to the di�erent situations that may exist in relatively close geographical areas (in many industries, what happens in one town is often completely di�erent from what goes on in neighboring towns).

Furthermore, from an operational point of view, a decisive factor is having sales networks with a large capacity for planning, excellent at preparing sales visits and with a great sales technique adapted to the business. The good news is that all this can be learned.

Lastly, and most importantly, it is vital to develop a clear and concise approach to customer loyalty, with a constant focus on getting back customers that were lost for whatever reason and—above all—keeping current customers satis�ed.

Following the same method discussed to analyze the starting situation from a sales point of view, the following aspects need to be improved:

Through creative solutions personalized for each customer, not only can we improve our percentage of on-schedule job completion times, reduce average operating times and make maintenance visits more e�cient, we can also provide a better quality of service to the customer through better response times and more �exible solutions. In the long run, this translates into improved satisfaction scores, increased customer loyalty and greater ease in identifying repeat sales opportunities.

We can see how a correct focus of after sales service can provide us with two tools that we can use to improve pro�tability in the short and medium term, through the optimization of costs and an increase in customer satisfaction and loyalty.

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4.2. Processes • Market/customer data gathering

• Pricing process and criteria

• Sales process to boost business with customers and influencers

• Definition of visit categories

• Detailed visit guides

• Sales techniques

4.3. Management system

• Objectives

• Sales agenda

• Monthly/annual sales plan

• Definition of management indicators

• Short/medium-term management reports

• Individualized operational meetings

4.4. Training • Training of middle managers aimed at maximizing sales quality

• Training of technicians if they can apply top-level sales functions

4.1. Organization • Planning

• Work Planning

• Resources Master Plan, adapted to the expected workload

• Definition of management indicators

• Short/medium-term business and productivity reports

• Operational meetings

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After sales, a business opportunity5. Conclusion

After sales is one of the areas with the greatest opportunities for increasing pro�tability. On one hand, the complexities of supervising o�-site sales and technical support networks often lead to misallocation of resources and e�ciency losses. Through proper planning and management, these ine�ciencies can be reduced, which leads to real savings in operating costs. On the other hand, achieving excellence in sales through the execution of a well-de�ned training program enables us to improve customer loyalty, identify new business channels and increase our ability to capture new customers. We thus have a perfect union of the two most direct ways of maximizing our income statement: reducing costs and increasing sales.

Companies that are able to identify their potential for improvement and de�ne the steps necessary to successfully carry out transformation projects will see a growth in pro�ts and an increase in customer satisfaction, thus making their business more sustainable and more pro�table in the long term.

After quantifying and prioritizing the opportunities, a speci�c action plan is de�ned for each customer in order to increase sales in after sales operations by working on the same four pillars:

Take better decisions- Transfer budget objectives to operating

indicators- Adapt business forecasts to resources - Provide daily indicators for easy monitoring of

the business - Carry out weekly operational follow-up that

ensures e�ective actions - Continuous improvement

Optimize capabilities- Perform actions for the continuous

improvement of brand image - Give priority to the most relevant tasks

for the customer - Allocate supervision, sales, and

management tasks reasonably

Strengthen necessary skills and knowledge - Middle management: change management,

action models, e�ective sales techniques, management operating system

Maximize Added Value of daily processes - Increase market/customer knowledge- Optimize inspection guides - Strengthen proactive sales - Improve preparation as basis of the

activity - Improve the quality of sales techniques

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About Alfa Consulting

About the authors

Gonzalo Pérez RuizOperations Partner, Alfa Consulting

Jorge DiezhandinoPrincipal, Alfa Consulting

Alfa Consulting is a consulting company specialized in the design and implementation of improvements in operations. Set up in 1996 and with branches in Barcelona, Madrid, Lisbon, São Paulo and Mexico City, it is the top independent operational consulting �rm in Spain in business volume. Alfa Consulting is member of the Cordence Worldwide Alliance, a unique and streamlined management consulting alliance whose members help companies and governments around the world achieve outstanding and sustainable results. Membership of the Cordence Worldwide group allows Alfa Consulting to operate in more than twenty countries and spread our work worldwide.

You can �nd more information about Alfa Consulting at:

www.alfaconsulting.comwwww.cordenceworldwide.com

After several years in the consultancy business, in 2000 Gonzalo joined Alfa Consulting, where he continues to develop his professional career. Since 2011 he has been responsible for the after-market services specialty area. He has worked both for family �rms and in large multinationals located in Europe and in Latin America. Clearly oriented to results and with a generalist and multicultural vision, he is specialized in the design of operational models and the implementation of operational improvements. He has proven experience in di�erent sectors and in various functional areas, which enables him to face situations with a great deal of experience and creativity. He has a degree in chemistry and chemical engineering from the Universidad de Montevideo (Uruguay) as well as an MBA from IESE Business School (Spain).

Jorge has worked with international companies in Europe, Latin America and the USA in operational design, implementation and improvement projects. He has built his experience in various sectors and areas, such as market segmentation and value propositions, sales management, after sales, supply chain, management of technical services, maintenance and shared services. He currently heads the Alfa Consulting o�ce in Mexico City, from which he is developing the company’s expansion strategy in North and Central America. He has a degree in physics from the Universidad Autónoma de Madrid and an MBA from the Instituto de Empresa (Spain). He has previously held positions of responsibility in companies such as Lucent Technologies and Telefónica de España, as well as in the Spanish Navy.

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