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Air Products University
Reduce L&D costs in support of organization objective to achieve 13% (RONA) Return on Net Assets
Organized L&D by colleges that align to organization core processes
Created Shared Services organization
Sales Training
Complex selling process at Air Products From selling tanks of oxygen to entire gas
production plants that are built on client’s site Sometimes long sales cycles managed by deal
teams Doug Timmel - College Leader for Sales
Analyzed the sales process and began to align L&D needs to sales process steps
Discovering how to apply L&D as a continuous improvement mechanism to improve the sales process
Applying Process Improvement to the
“Art” of Sales
Case Study: Air Products and Chemicals Douglas Timmel February 16, 2006
5
Fast Facts
Global gases, chemicals, equipment and services
provider Serving customers in
technology, energy,healthcare and industrialmarkets
Fortune 150 company -- $8B sales Chemical industry safety leader Geographically diversified, with half of our sales
outside of the U.S. Operations in more than 30 countries 20,000 employees worldwide Known for operational and business process
excellence. 15 Different Sales Organizations, 17 SBUs
6
What Is A Sales Process?
The Gartner Group defines a sales process as the “Critical steps in selling linked together …[to] … provide the common framework, vocabulary and metrics for how sales organizations review and analyze territories, accounts, opportunities, individuals and sales cycles…”
7
Why Focus on Sales Process?
A well-managed sales process helps to improve visibility, predictability, consistency, scalability and sustainability, which often translates into a competitive advantage.
The reality is that selling in today’s complex environment requires a coordinated effort and team approach, making a standardized sales process all that more important.
Training must support competency development, which must support process improvement, which lead to better sales performance.
8
The Problem….
The challenge for all sales organizations is to grow revenue in a predictable, consistent manner and sustain performance over an extended period of time.
The Sales Manager’s challenge is to improve the effectiveness and productivity of the Sales organization so revenue and margin DO increase.
How to do this in an increasingly difficult Sales environment?
9
The New Selling Environment Increased competition with lower cost basis Consolidation of Purchasing companies Buying Decisions by committee and moving
up to the “C” level to make final decisions Transparency of information Same number of Suppliers and competition
intensifies Opening up new markets and establishing a
sale presence where a history of sales processes is not established.
Pressure on Cost of Sales Increased emphasis on Supply Chain
Efficiency
10
The Selling Environment has Changed...Does Sales have Skills To Sell at the “C” level? Understand and be able to “Sell into” a customers
Value stream? Have a discussion with the customer on how the
offering may affect the customers financial performance?
To be able to sell to a purchasing committee with many buying influences?
To sell into complex, global accounts with multicultural buyers with different expectations?
Be able to sell (and keep) price increases in a very dynamic cost environment?
To understand the cost impact of supply chain and service levels, and the vale of forecasting ?
To understand the Value of a robust sales pipeline?
11
By Implementing a Single Sales Process and Training Approach
Improved and standardized sales pipeline, with clear visibility and forecast accuracy.
The ability to replicate and scale best practices and learning across the organization.
Improved communication, cooperation, coordination and, resource allocation.
Improved win rates and sales velocity
Lower cost of sales and sales training
Common assessment of competencies
New hire training ramp up time and an accelerate ROI payback period.
Increase in sales productivity and effectiveness.
13
Key Business Issues for AP
All the same challenges facing other selling organizations,
No Alignment of Sales Processes– Many sales processes, little documentation
No holistic or consistent Sales Training approach, all training “ad hoc” at SBU level
SAP “Steamroller” created a burning deck– Connections from SFA/CRM tools “broken”
by move to SAP– Lost visibility of customer data– Previous systems were a myriad of CRM
applications
14
Our Path……..
Implementing SAP provided the opening to define a single sales process for the company
Sales Process was established and agreed Established an Enterprise Approach and
converged on crucial decisions such as opportunity stages and corporate metrics.
Tool was chosen to help measure KPIs and become shared vault of “customer knowledge”
Agreed to begin a single, global, Sales University where all Sales Managers could send their salespeople, agents, distributors.
15
The Selling Process at AP Two Distinct Sub-Processes
Find and Win Customers – Leading Indicators– Provide an Indication of future success
Retain Customers – Lagging Indicators– Provide Revenue and Profits to the Company– Provide the Forecast to the Supply Chain– Supply the correct inputs for Perfect Order
Fulfillment
16
Level 3 Process “Find and Win Customers”
Identify Opportunities
1
leads / sales target list
Develop Relationship
2
prioritized list of qualified leads
Review Requirements and Engage Organization
3
decision to offer or not
Develop and Submit
Proposal
4
proposal in hands of customer
Obtain Commitment
5
agreement to do business
Establish or Modify
Customer Account
6
approved customer account
Process Contract
Information
7
contract data input to SAP
Process Steps
Outputs to Next Process Step
Output to FULFILLValid and viable customers
Output to FULFILLValid and viable customers
relationshipconfirmed customer requirements
configured offering
Inputs to SELLMarket modelOfferings (from INNOVATE)Business objectives
Inputs to SELLMarket modelOfferings (from INNOVATE)Business objectives
Leads QualifyNeedsAssess PProposal Neg. Close
Move Data to SAP
17
Enterprise Process = Enterprise Tool
Business Rules Can Drive the Process
Sales force automation tool Overlays the Process & Allows for Business Rule Inclusion
All Businesses use the SAME Stage field!
18
AP Leading Indicators Align to “Find and Win Customers”
% Leads Becoming Prospects
Revenue Potential from Prospects
Revenue potential in pipeline
– A) By Salesperson– B) By Segment
Number of Customer Touches
– A) By Segment B) by Time Period
Sales Cycle Time on New Opportunities
Won/loss % on new opportunities
% Contract renewals
19
Examples of Leading Indicators
Customer Touches
– Increase of 72% from May through August!
Opportunity Pipeline Stage Analysis
– First time we have analysis across company
23
Examples of Level 4 Processes for “Find and Win Customers”
Find and Win Opportunities...
Find and Win Opportunities...
Identify Opportunities
Identify Opportunities
Develop Relationship
Develop Relationship
Review Requirements and Engage Organization
Review Requirements and Engage Organization
Develop and Submit Proposal
Develop and Submit Proposal
Obtain Commitment
Obtain Commitment
Establish or Modify
Customer Account
Establish or Modify
Customer Account
Process Contract
Information
Process Contract
Information
Create leads● Build awareness
in the marketplace
● Collect leads● Validate leads● Distribute leads● Act on leads● Collect data on
lead quality and quantity
Solicit feedback on proposal
Negotiate Analyze and
revise offering Develop contract Close Collect feedback
on won / lost orders
Develop lessons learned
Approve project
Pre-Selling Build personal
marketplace recognition
Establish / expand marketplace contacts
Discover needs Understand
needs Understand
buying habits Identify decision
makers Build
relationships MAKE SALES
CALL
Screen opportunities
Evaluate competition
Match offerings / capabilities to customer need
Create interest in offering
Support customer’s RFQ creation
Respond to RFQ Prepare / engage
organization for offering development
Develop cost estimates (link to CIA processes)
Approve pricing and proposal
Prepare proposal documentation
Submit and present proposal
Complete documentation
Complete, review, and approve customer information in workbook
Recognize / reward success
Document contract information in workbook
24
Find and Win Level 4 Processes Drive Behavior and Outcomes
Make Sales Call
Skills needed: Pre-call planning
Setting appointment Opening statement
Probing
Training required: Sales call Methods Questioning skills Listening
skills
Key Outcome: Process Definition and need to Drive Continuous
Improvement has Allowed AP to Justify a Sales University
25
Level 3 Process “Retain Customers”
Segment Customers
9
customers in segments
Monitor Segment / Customer
Performance and Feedback
9
financial performance
Analyze Gaps and Engage
Organization
10
improvementopportunities
Authorize and Plan
Improvements
11
actions, changes, and expenditures
Implement and Control
Improvements
12
Modify Customer Account
13
customer data / segment changes
Forecast Demand
14
demand forecast for Supply Chain
Process Steps
Outputs to Next Process Step
Output to FulfillValid and viable customersOutput to Supply ChainDemand forecast
Output to FulfillValid and viable customersOutput to Supply ChainDemand forecast
service performance
Inputs from SELLOf a WON CUSTOMER
Inputs from SELLOf a WON CUSTOMER
improvedfinancial performance
improvedservice performance
contract data changed in SAP
ResultsImproved customer loyaltyImproved segment performance
ResultsImproved customer loyaltyImproved segment performance
Obtain Revenue and Margin
26
Examples of Level 4 Processes “Retain Customers”
Manage Customer
Experience
Manage Customer
Experience
Segment Customers
Segment Customers
Monitor Segment / Customer
Performance and Feedback
Monitor Segment / Customer
Performance and Feedback
Analyze Gaps and Engage Organization
Analyze Gaps and Engage Organization
Authorize and Plan
Improvements
Authorize and Plan
Improvements
Implement and Control
Improvements
Implement and Control
Improvements
Modify Customer Account
Modify Customer Account
Forecast Demand
Forecast Demand
Account planning Modify commercial
terms, mid-contract, such as…
price changes hardship
issues force majeure improvements cost
reductions term
extensionsetc.
Input from… Customer Loyalty
measures Customer
Complaint process
Periodic performance assessments
Feedback from on-going customer relationships
Complete documentation
Complete, review, and approve customer information in workbook
Recognize / reward success
Negotiate Close Develop lessons
learned
Mass price changes
Determine need
Develop plan Execute
27
Lagging Indicators Align to “Retain Customers” Revenue Attainment /
Growth– A) year to year
change – B) actual total
revenue
Actual New Business Profitability
– A) by sales territory B) by customer
C) OR by account
Wallet share– A) by customer
B) by territory
Price Increase Effectiveness ( within a customer or a territory)
Customers Segmented based on Value/Return
Inputs to Perfect Order Fulfillment
28
The Results at Air Products
Enterprise Sales Process, Enterprise Design– Business Rules drives the process
Insight into Leading indicators of Success & Performance for the Entire company
Leading Indicators can be tied to Lagging Indicators
Visibility of customers across the Enterprise
One Tool for the entire company
Have a base to now measure continuous improvement and a justification for establishing a budgeted Sales University for Training
29
Process Improvement is Dependent on Training Process Steps identify the critical measures. Ability to measure the Process Steps
indicates speed to execute, efficiency of execution, identification of best practices
Knowing the Process Steps and metrics allows identification of critical activities and competencies to be continuosly improve.
Competencies can be established and training defined to allow Sales to execute the process steps faster and more effectively.
The Process improvements can then be measured and tracked in Dashboards.
30
Having and Executing a Sales Process Effectiveness X Efficiency = Productivity
Better Capital ControlCost Effect. Supply ChainRight Process/System
Better Products/ServiceQuality Prod. DeliveryRight Competence/Skill
Customer LoyaltyFaster Response TimeRight Product/Feature
Market Share & BrandFaster Prod/Offer Dev.Right Message
Faster GrowthHigher Sales ClosesRight Customers
Higher Profits/ Sales RepShorter Sales Cycle Right Markets
ProductivityEfficiencyEffectiveness
31
Benefits for Air Products
– Unexpected cross selling opportunities– One unified Sales Training approach tied to Process
and measurable with defined metrics. – Global visibility on accounts– Better forecasting for all of Air Products– Better overall competitor assessment– Reduced cost of sales and sales training– Greater Sales Productivity– Eliminated many administrative tasks/costs– Better direction to spend on Marketing funds as can
assess return on leads.– Expect shortened sales cycles– Better Alignment of Rewards with Performance– Better allocation of spend to customer segment and
specific customer opportunities
32
Conclusion
Organizations that effectively align and leverage their people, process, training and technology assets are likely to sustain competitiveness over organizations that lack standardized sales processes and a consistent sales training approach.
If you have defined your winning sales processes but have yet to embody these best practices into your company, consider a solution that aligns process to measurements and forms the basis for assessment and training.