sales excellence

Sales Excellence

Collaborate Innovate Excel

Kienbaum Management Consultants

2

Any sales department can sell great products – an excellent sales department can

sell any product Importance of an effective sales approach

» According to our research, the presence of our identified

sales excellence elements leads to greater corporate

profitability and market share regardless of product

category

» In effect, the sales excellence system drives

corporate performance, not the product the

company sells

» Important and complex tasks, such as acceleration of

product innovation and new customer acquisition,

require multiple sales elements

» The Kienbaum sales model touches on all necessary

elements of an effective sales approach contributing to

an organization's success

Importance of Sales

Sales Excellence does not describe a state, but rather a continuous process. The Kienbaum Sales Excellence Model provides guidance

in this process. It serves on a theoretical, as well as practical level, as it guides through the ten fundamental components of sales. It has

proven itself in practice as an analytical and optimization tool used in various industries and sales segments.

3

Our systematic analysis of all elements of an efficient organization will identify

the most important levers for its transformation Elements of an effective sales approach

Source: Kienbaum

Operative Strategic

Peo

ple

C

om

pan

y

Ch

ang

e M

anag

emen

t

Organization Management System

Voice of the Customer

Personnel Development

Processes & Systems

Management by Objectives

KPIs and Management Cockpit

Personnel Selection and Diagnostic

Strategy

4

Identify and prioritize action fields for successful transformation based on the

elements of the transformation process Kienbaum Model: Elements of an effective transformation process

1. Assessment of strategic success potentials of individual business units (market attractiveness, competitive position, and cost and capital structure). Derive strategic and operational areas of action (including sales and marketing strategy, product portfolio decisions, focus segments, evaluating the attractiveness of dealers, country portfolios etc.).

2. Recognize client satisfaction and client value as a company’s key success factor, and as foundation for the development of effective functional strategies (e.g. sales and marketing management (e.g. service differentiation, establishing effective key account management, developing the service business, etc.)).

3. Design market oriented structures, e.g. in Sales and Marketing, to reflect the complexity of the market within the company and achieve maximum customer focus, to develop interface topics (e.g. centralized vs. decentralized), and to guarantee the control of the business with respect to utilization of current and future success potentials of the company.

4. Fill positions within the company based on competency profiles – leadership competences and expertise, e.g. with respect to sales functions. Audit key executives of the different functional areas and develop a strategy compliant competency profile for the employees of the company.

5. Ensure professional customer relationships through effective and efficient processes, supported by a (CRM) system that is embedded in the company’s IT landscape and allows for highest transparency as well as KPI generation for management cockpits. This supports and enables the proactive management of the organization.

Strategy

Voice of the

Customer

Organization

Processes and Systems

Personnel Selection and Diagnostics

5

KPIs and Management Cockpit

Identify and prioritize action fields for successful transformation based on the

elements of the transformation process Kienbaum Model: Elements of an effective transformation process

Management

System

Management by Objectives and Incentive

Systems

Personnel

Development

Change Management

6. Develop an effective KPI system for adequate management of the company, including early warning indicators for timely control and intervention (e.g. establish management cockpit as decision making platform for effective management of the company and the business units).

7. Establish and adjust target agreement and performance evaluation system (“management by objectives”) in order to ensure achievement of the company’s defined targets. Establish or adjust financial incentive system accordingly (e.g. with respect to salary, percentage of the variable compensation, etc.).

8. Establish a self-regulating management and control system (planning / reporting / meeting / evaluation structure) based on the established KPI system, to achieve sustainability for the systems and activities implemented. Develop a strong focus on implementation within the organization (deep structure) with relevant management and controlling elements in place.

9. Develop competences within the company (e.g. how to effectively develop major accounts – key account management or implementation of value pricing), to implement the customer oriented corporate strategy. E.g., strengthen sales competences along the company’s sales pipeline (e.g. acquisition of new customers, etc.)

10. Accompany the change process within the company to ensure sustainability (e.g. through highly effective workshop formats and long-term auditing of the management system). Establish an effective communication strategy to accompany the change process on all levels, from the owners to the management/executive board to the employees.

6

The design of a sales strategy follows a distinct set of categories, leading to a strategy roadmap.

As the basis of all sales activities, an explicit sales strategy should

be formulated Strategic Roadmap

Profitability/

Liquidity

Market

Position

Attractiveness

Generate a minimum

return of 10 %

Customer Value as focus

of sales activities

Proactive management of

accounts payable &

receivable

Selective processing of

industries / product

segments

New distribution

channels and markets

Active management of

merchants

Employee development

by challenging and

supporting

Value Pricing to realize

competitive prices

Communication of

products

Internationalization

Innovation

Productivity

Increasing the

productivity of industry

sales department

Development of

standards for products

and modules

Use of an effective sales

management system

Expand and strengthen

current products

Targeted and controlled

use of synergies

Launches metered and

actively pursue

Focusing on a standard

range

Complete product

portfolio in defined

areas

P1

I1

M1

R1

P2

I2

M2

R2

P3

I3

M3

R3

P4

I4

M4

R4

A1 A2

Strategy

7

Typical outputs of a customer value analysis are strategic & operative

guidelines for business development & are a basis for value pricing Reporting options based on the customer value analysis as a basis for systematic prioritization

Determining the relative position compared to competitors and identify strategic and operational levers to optimize the initial situation of the product and new innovations.

Pro

du

ct

Ser

vice

Im

age

Innovation capability

Product quality

Conformity to specifications

Technical reliability

System competence

Delivery reliability

Reaction time

Global footprint

Development partner

Quality of customer handling

Brand

Financial strength

Price - Quality Sensitivity

Preis Qualität

Relative price

80% 120% 100% Ø

Weighting Evaluation

a) Strategic map

Analysis of the strategic

position compared to

competitors

b) Operative map

Analysis of operational

problems/opportunities in

comparison to competition

Rel

ativ

e pr

ice

Relative cust. satisfaction + -

Competitor A

Competitor B

Dis

tanc

e fr

om m

ean

Weighting

+ -

Results

c) Outside-in vs. inside-out view

Categories Evaluation

Voice of the Customer

8

The development of a state-of-the-art organizational form follows

three steps Approach to optimization of an organization

An optimized sales organization can be found with our standardized evaluation scheme.

Identify alternative structures Define evaluation criteria Evaluate alternatives and decision

Identify alternative organizational forms regarding the targets:

» Sustainability

» Practicality

» Strategic framework

» Sales processes

» […]

Alternative organizational forms Standardized evaluation scheme State-of-the-art organizational form

Definition of organizational criteria and discussion of weights:

» Transparency/Span of control

» Economic efficiency

» Velocity

» Quality and sustainability

» […]

Evaluation of the defined criteria with the standardized evaluation scheme

» Comparison and discussion of the (dis)advantages and of the alternative organizational forms

» Decision for the preferred sales organization

Per

form

ance

Span of Control

xx %

xx %

xx % […]

[…]

[…]

Organization

9

Falling

High Achiever

High achievers with potential

Star

Talent

The basic structure of the competence model originates from the

involvement of different data sources Diagnostics

Same level

long-term

Competence

Overwhelmed

high

Same level, more

responsibility or

new function

Next level in

2-3 years

Next level

short-term

low

Potential

Individual evaluation

» Analysis of the existing processes, tools

and management systems

» Consideration of existing internal

competences within the sales force and

organization

» Comparison with customer view on the

basis of the results from the customer

benefit analysis

» Development of a balanced synthesis

on the basis of different data sources

(existing competences, know-how from

Kienbaum experts and customer

requirements from focus interviews)

Competence Potential Portfolio

Group evaluation

Individual Competence Profile

Individual and group evaluation will be compared with the requirements of a new position.

Description

Run Business

Change

Business

Lead Others

Lead Self

Critical Dimension

Peer Group 1 = last 20% 2 = Below Average 3 = Average 4 = Above average 5 = Top 20% Individual

High achievers with potential

Personnel Selection & Diagnostics

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The sales process needs to focus on market segments

(customer needs) and follow the sales funnel Sales Funnel and sales process

Sales-Controlling

Marketing Potential Initial

Contact

Content related

exchange Offer

Negotia- tions

Sale Customer

Management

Lead-Development Key Account

Mgnt.

J

N

J

N

J

N

J

N

J N J

N N

J

Suspects Contacts Prospects Leads Customers Key Accounts

Sales Funnel Management helps to design and steer the sales process from Marketing to Key Account Management.


11

The technical requirements and system support need to be evaluated CRM-Requirements and check

Check-up of existing CRM-System

Definition and management of items,

prices etc.

Funnel- and pipeline analysis

Visit and route planning

Email marketing

Linked to website S

ales

M

arke

ting Maintenance planning

E-Service

Integrated analysis

Web-based

Workflows S

ervi

ce

Gen

eral

Cha

ract

eris

tics

Definition and management of data

basis

Address control

Elimination of redundant contacts

Organizer

Bidirectional sync to groupware applications

Man

agem

ent o

f bus

ines

s co

ntac

ts

Con

tact

M

anag

emen

t

Mobiles CRM

MS-Outlook integration

CTI (Computer-Telephony-Integration)

Influence on the core business

Price and expense in implementation

Tec

hnic

al C

hara

cter

istic

s Im

plem

enta

tion

The Sales Management System should be based on an easy to operate, highly transparent CRM-System which

provides high quality data for the required KPIs and dashboard that is embedded into the IT landscape.


12

Fully automated management cockpits with information push

functions support the logic of an effective management system Examples of different management cockpits and information push systems

Heat Maps

Spread Analysis

Guidance and early

warning indicators through

colors

Different areas and charts for

different indicator clusters

KPIs & Management Cockpit

The cockpits represent a form of high density information with drill down functions and offer an at a glance view of vital

data

13

Successful incentive systems have to meet seven key criteria Kienbaum criteria are suitable for rapid testing of different models

» Depending on grade, 20-40 % of compensation

variable

» Commission systems increasingly replaced

» Monthly orientation and payment of incentives leads

to sales dynamics

» Also applies to partial year-end payments

» 4-5 targets for success orientation

» Introduction of threshold value, standard value and

stretch value

» In case the target is clearly exceeded, payment of

above average bonuses

» Combination with goodwill regulations

» Multiply success methodically

» Rewarding and penalizing multipliers unfold

sustained methodical incentives

» Activity-guiding targets name desired behaviors

» Deduction from role and process models

» 20 % of sales reps stand for 80 % of the result

» Focus on top sellers excludes a tendency to

mediocrity

Monthly

incentives

B

Reasonable

targets

C

Exceed

targets

D

Reward

leadership

E

Guide

activity

F

Orient along

best performers

G

Reward

variably

A » Variability in different scenarios 13 %-26 % at 100 % TA

» Combination of commission & bonus

» High commission. featuring existing customers w/out incentive effect

» Monthly calculation & quarterly payment create proximity to transactions

» Quarterly payments create motivation peaks and level out seasonal variations

» Basically only 1 sales target for commission with 5 target elements defined for

bonus

» Lacking detailed design of general terms of bonus

» Lacking detailed design of general terms of bonus

» Previous systems show no or little incentives in case targets are exceeded

» Not yet concretely provided for leadership

» Sales behavior / qualitative factors comprised in bonus measuring

» Commission limited in activity guidance: higher the turnover gain, higher the

payment

» Exemplary targets activity-guiding in terms of main tasks

» Differentiation of targets in bonus not yet defined

» Amount of flat commission oriented along amount of previous-year sales

Ideal Model Typical Model

Management by Objectives and Incentive Systems

14

A successful Management Control System is designed as a closed

loop to steer the business The PDCA cycle and closed loop management system

Strategic planning Operative planning Control Report

Weekly

Annually

Monthly

Wochen-

Meeting

Monthly report

Weekly report

Annual report

Weekly plan

Monthly plan

Annual plan

Vision,

Mission,

Strategy

Daily plan /

SIC Daily meeting Daily

Annual

Meeting Minutes/ Action

log

Monthly


log

Weekly


log

Daily


log

Strategy


log

Act

Check

Do

Plan

» Plan - determine data-based targets (KPIs), goals and objectives

» Do - work focused solely on the KPIs; if this is not the case, revise KPIs

» Check - compare your results and achievements against your targets

» Act - decide on corrective / remediate actions

In order to make the strategy implementation most effective, it needs to be integrated within the management system of the business to permanently control for premises, activities and results achieved.

Management Systems

15

Based on potential profiles, training and development plans can be

designed on an individual and group level Personnel development

Potential on individual level

» Reflection of the requirement's relevant

weighting with respect to different roles of

managers

» Implementation of role specific requirements

with the company-specific competency

model

» In addition to verifying current assessment

of potential, career recommendation will be

made with regard to possible management

roles

0

1

2

3

4

5

Business

Developer

People Manager

Change Manager

Innovation Manager

Expert

Project Manager

Converter

Consolidater

From the analysis and evaluation of both experience and expertise, a focus on relevant management roles can be

derived. This is the basis for the companies personnel development plan.

Description

Personnel Development

16

The individual employee has to be mobilized from day one to ensure

sustainability of the change and development Change management

Background

» Different roles within the company

» Discrepancy in the level of expectation and aspiration of the management and the staff

» Different motivation groups block the transformation (promoters vs. skeptics/ those who resist)

Development phases

in change processes

Anger

Negotiate Depression

Test

Accept

Integrate

Influence of the “emotional

curve"

Symptom ‘Compreh.' ‘Act' ‘Ability' ‘Transform' ‘Want' ‘Know'

Mobilization of the individual

employee

Confusion

Fear

False Start

Frustration

No Change

Chaos

/

/

/

/

/

/

Capa-

bilities Action Plan Resourses Incentives

Infor-

mation

Infor-

mation Incentives Resourses Action Plan Targets

Targets Capa-

bilities Resourses Incentives

Infor-

mation

Infor-

mation Incentives Action Plan

Capa-

bilities Targets

Targets Capa-

bilities Action Plan Resourses

Infor-

mation

Incentives Resourses Action Plan Capa-

bilities Targets

Set-up Workshop

Series

Targeted Trainings

Structured Project Mgnt.

Give Space Powerful Incentive System.

constant comm-

unication

Starting points for further development

Change Management

17

Excellent sales are well aligned and action oriented Sales excellence alignment and implementation

Growing Market Share

and Profitability

Alignment

Implementation

18

Eric M. Lavelle Principal Phone: +1 843 804 0020 Fax: +1 213 805 5337 Mobile: +1 843 804 0020 [email protected]

Rolf Friedrich Senior Director Phone: +49 211 965 9270 Fax: +49 211 965 9335 Mobile: +49 172 203 7255 [email protected]

Kienbaum Consultants Inc. Contact information for US Kienbaum Consultants

Contacts

Kienbaum Consultants Inc. 2300 Lakeview Parkway | Suite 700 Alpharetta, GA 30009 USA

Address

www.kienbaum.com

mailto:[email protected]

mailto:[email protected]