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Focus on growth<br />

<strong>Sales</strong> Force Effectiveness<br />

<strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong><br />

The <strong>Sales</strong> & <strong>Marketing</strong> Challenge<br />

Performance Management<br />

“It’s not the strongest of the species that survive, or the most intelligent, but the one most<br />

responsive to change.”<br />

(Charles Darwin)<br />

The number of challenges sales & marketing organizations have had to manage since the end of the 90s<br />

has increased significantly. Globalization opened the door for increased competition from formerly<br />

separated markets, the appearance and growth of competitors, especially from Asia – first from Japan and<br />

later China, India and soon other “tiger” countries – put traditional European and American companies<br />

under pressure. First these tried to “defend” their traditional markets and customers and competed on price<br />

and product quality only. They started cost restructuring programs, but soon it became clear that this<br />

challenge could only be answered by the efforts of the whole value chain, first of all to identify customer<br />

needs and consequently to change its offering in products and service at the right price to the identified<br />

“order winners”.<br />

<strong>Sales</strong> and <strong>Marketing</strong> can often no longer rely on their old and seemingly faithful customer base, but have to<br />

adjust to the increased amount of requirements, needs to work closely with their innovation departments to<br />

develop the right products, “search” for new markets and customer groups, think about segmentation of<br />

markets, customers and products, and then decide on the the right management of customers even on a<br />

global level, the channels they should be approached with, overall embrace change by transforming their<br />

processes, systems, organizations and last but not least the people who drive the former.<br />

The ultimate goal is to drive profitable revenue growth mid and long term. In order to create the required<br />

flexibility <strong>Kienbaum</strong> has developed an approach to achieve the needed transformation and give sales and<br />

marketing organizations the ability to implement further sustainable transformation for future challenges.<br />

1<br />

<strong>Sales</strong> Organisation


<strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong><br />

<strong>Sales</strong> & <strong>Marketing</strong> Transformation Management – the <strong>Kienbaum</strong> Approach<br />

To achieve sustainable growth of revenue and market share four main Elements need to be evaluated<br />

and adjusted to the “voice of the customer & voice of the market“, finally improved and sustainably<br />

implemented.<br />

Focus on<br />

Growth<br />

<strong>Sales</strong> Force<br />

Effectiveness<br />

World Class<br />

<strong>Sales</strong><br />

Management<br />

SALES SUCCESS<br />

Sustainable revenue growth and<br />

market share<br />

2<br />

Performance<br />

Management<br />

<strong>Sales</strong><br />

Organization<br />

Each of the four elements consists of 5 sub-blocks which in a logical way build on each other and need<br />

to be addressed as a whole to act as enablers for a successful transformation.<br />

Focus on<br />

Growth<br />

Aligned Market Strategy &<br />

<strong>Sales</strong> Objectives<br />

Pricing &<br />

Tendering<br />

“Customer”<br />

Portfolio<br />

"Product"<br />

Portfolio<br />

Voice of the customer /<br />

Voice of the market<br />

<strong>Sales</strong> Force<br />

Effectiveness<br />

Organizational knowledge<br />

Market Position<br />

<strong>Sales</strong><br />

Forecast Planning Process<br />

<strong>Sales</strong> Process<br />

(Customer Contact Time)<br />

Roles & Responsibilities<br />

Client Engagement<br />

Performance<br />

Management<br />

<strong>Sales</strong><br />

Performance Mgmt. System<br />

<strong>Sales</strong><br />

KPI’s<br />

Market Intelligence<br />

<strong>Sales</strong> Incentive &<br />

Compensation Schemes<br />

CRM & IT<br />

Tools<br />

<strong>Sales</strong><br />

Organization<br />

Structural organization<br />

<strong>Sales</strong><br />

Skills<br />

Emotional<br />

Skills<br />

<strong>Sales</strong><br />

Assessment/Audits<br />

<strong>Sales</strong><br />

Training & Development


<strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong><br />

<strong>Sales</strong> <strong>Excellence</strong> Enablers<br />

<strong>Sales</strong> & <strong>Marketing</strong> Transformation Management – the <strong>Kienbaum</strong> Approach<br />

To achieve transformation and finally sustainable sales & marketing excellence <strong>Kienbaum</strong> suggests<br />

a 4 phase approach to first identify the transformation need and capability of a sales & marketing<br />

organization and second to design required changes and finally implement them.<br />

Focus on<br />

Growth<br />

<strong>Sales</strong> Force<br />

Effectiveness<br />

Performance<br />

Management<br />

<strong>Sales</strong><br />

Organization<br />

Top-Down Support<br />

Pre -<br />

Assessment<br />

Assess Transformation<br />

Need<br />

Customized<br />

Approach<br />

Evaluation<br />

Assess Transformation<br />

Capability<br />

Macro<br />

Concept<br />

3<br />

Design<br />

Conception<br />

Develop Transformation<br />

Capabilities<br />

Bottom-up Involvement<br />

Implementation -<br />

Roadmap<br />

Implementation<br />

Realisation<br />

Deliver <strong>Sales</strong> Progress &<br />

Success<br />

<strong>Kienbaum</strong> has developed an exemplary approach in which order in the 4 phases topics like for<br />

example capturing “Voice of the customer”, “customer portfolio”, “sales skills” and soft<br />

transformation factors like “human capital” are addressed.<br />

Pre-Assessment Evaluation Design & Concept Implementation<br />

Understand<br />

<strong>Sales</strong> Vision & Mission<br />

Interviews / Workshop(s)<br />

with<br />

Key-<strong>Sales</strong>-Players<br />

High level Assessment &<br />

<strong>Sales</strong> Data Analysis<br />

Customized Approach and<br />

Plan for Evaluation Phase<br />

Program Introduction<br />

Kick-Off-Communication<br />

* R&R stands for Roles & Responsibilities<br />

Understand<br />

Aligned Market Strat./<br />

<strong>Sales</strong> Objectives<br />

Understand<br />

Market Position<br />

Analysis<br />

Customer Portfolio<br />

Analysis<br />

Product Portfolio<br />

Analysis<br />

<strong>Sales</strong> Forecast + Planning<br />

Process<br />

Analysis knowledge<br />

of Voice of Customer<br />

(VOC)<br />

Analysis<br />

Pricing & Tendering<br />

Analyze & Design common sales processes, values & behavior involving key sales personnel on every level<br />

Analysis<br />

<strong>Sales</strong> Process<br />

Analysis<br />

<strong>Sales</strong> KPI’s & Personal<br />

Goal Struct.<br />

Analysis<br />

<strong>Sales</strong> Compensation &<br />

Benefits Schemes<br />

Analysis<br />

Informat. Management Process<br />

& IT (e.g. CRM)<br />

Analysis<br />

Market Intelligence &<br />

Information stream<br />

Analysis<br />

R&R, Client Engagement<br />

Analysis<br />

<strong>Sales</strong> Performance<br />

Management System<br />

Analysis<br />

Organizational Structure<br />

Analysis<br />

<strong>Sales</strong> & Emotional<br />

Skills<br />

Analysis<br />

Training & Development<br />

Identified Improvement,<br />

levers & potential<br />

Review 1 st Draft Macro<br />

Concept<br />

Transformation Plan &<br />

Structure<br />

Identified Targets for<br />

Revenue Growth<br />

Macro Concept<br />

Design Micro <strong>Sales</strong><br />

Organization<br />

Design <strong>Sales</strong> Approach /<br />

Process (e.g. KAM)<br />

Design Process capturing<br />

VOC<br />

Design Performance<br />

Management System (incl.<br />

Comp & Ben)<br />

Design Human Capital<br />

Development Plan<br />

Design <strong>Sales</strong> Objectives<br />

Design detailed Comm. &<br />

Transformation Plan<br />

Design concise KPI / Personal<br />

Goal Structure<br />

Implementation<br />

Roadmap<br />

Implementation / Promotion of “new” <strong>Sales</strong><br />

processes, values & behavior<br />

Implementation of Design<br />

Constant Project Status<br />

Control & Management<br />

Sustainability Plan<br />

Possible Executive Search<br />

and Outplacement<br />

Support of Transformation<br />

Process<br />

End of Implementation /<br />

Start Sustainability<br />

Management<br />

Sustainability Management<br />

Sustainability<br />

Management<br />

Supported<br />

by <strong>Kienbaum</strong><br />

as long<br />

as required<br />

or desired


<strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong><br />

The <strong>Kienbaum</strong> Approach – Pre-Assessment Phase<br />

Pre-Assessment<br />

Understand<br />

<strong>Sales</strong> Vision & Mission<br />

Interviews / Workshop(s) with<br />

Key-<strong>Sales</strong>-Players<br />

High level Assessment & <strong>Sales</strong><br />

Data Analysis<br />

Customized Approach and Plan for<br />

Evaluation Phase<br />

Program Introduction<br />

Kick-Off-Communication<br />

The Pre-Assessment Phase, consists of a “sales vision & mission” workshop and<br />

interviews with prior defined key sales players and a first high level sales & marketing<br />

data analysis. It ensures a common understanding between <strong>Kienbaum</strong> and the<br />

customer’s sales & marketing transformation needs. As a result <strong>Kienbaum</strong> customizes<br />

its exemplary consulting approach to these transformation needs and builds with a<br />

customer team a detailed project plan for the Evaluation Phase containing timelines,<br />

studies (process, data, management audits etc.) project organisation and data<br />

requirements.<br />

The <strong>Kienbaum</strong> Approach – Evaluation Phase<br />

Understand<br />

Aligned Market Strat./<br />

<strong>Sales</strong> Objectives<br />

Understand<br />

Market Position<br />

Analysis<br />

Customer Portfolio<br />

Analysis<br />

Product Portfolio<br />

Analysis<br />

<strong>Sales</strong> Forecast + Planning<br />

Process<br />

Analysis knowledge<br />

of Voice of Customer<br />

(VOC)<br />

Analysis<br />

Pricing & Tendering<br />

Evaluation<br />

Analysis<br />

<strong>Sales</strong> Process<br />

Analysis<br />

<strong>Sales</strong> KPI’s & Personal<br />

Goal Struct.<br />

Analysis<br />

<strong>Sales</strong> Compensation &<br />

Benefits Schemes<br />

Analysis<br />

Informat. Management Process<br />

& IT (e.g. CRM)<br />

Analysis<br />

Market Intelligence &<br />

Information stream<br />

Analysis<br />

R&R, Client Engagement<br />

Analysis<br />

<strong>Sales</strong> Performance<br />

Management System<br />

Analysis<br />

Organizational Structure<br />

Analysis<br />

<strong>Sales</strong> & Emotional<br />

Skills<br />

Analysis<br />

Training & Development<br />

Identified Improvement,<br />

levers & potential<br />

Review 1 st Draft Macro<br />

Concept<br />

Transformation Plan &<br />

Structure<br />

Identified Targets for<br />

Revenue Growth<br />

Macro Concept<br />

The Evaluation Phase assesses the ability of sales &<br />

marketing for the four main elements focus on growth, sales<br />

force effectiveness, performance management and sales<br />

organization.<br />

It has the purpose to understand the transformation<br />

capability for each of these topics, and to build a macro<br />

concept with key levers for improvement to fill existing gaps,<br />

a business case for profitable growth and a to be state<br />

after a transformation programme.<br />

Focus on Growth: Understanding existing sales objectives and alignment with the<br />

existing market & sales strategy. Assessing how the “Voice of the<br />

customer / Voice of the market” has been captured and used (which<br />

channels are used to capture VOC, interviews or questionnaires, what<br />

are the methods to use the gained knowledge eg. conjoint analysis,<br />

battlefield analysis). Assessment and evaluation of the product (abcxyz<br />

analysis as well as life cycle analysis) and customer portfolio<br />

(abc-xyz analysis profit and revenue).<br />

4


<strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong><br />

The <strong>Kienbaum</strong> Approach – Evaluation Phase<br />

<strong>Sales</strong> Force Effectiveness: Assessment of sales processes, understanding effectiveness (face time with<br />

„Understand<br />

the root cause<br />

why people<br />

act in a<br />

specific way“<br />

„To drive<br />

successful<br />

transformation<br />

and to get<br />

sustainable<br />

results change<br />

the behavior of<br />

your people“<br />

old and new customers) and efficiency (sold units / € per hour face time).<br />

Assessment of Roles & Responsibilities in the process (who does what),<br />

assessment of client engagement approach (lonely hunter or team effort),<br />

assessment of forecasting and planning processes. Real life studies will<br />

be done on the processes to assess gaps and improvement potential (e.g.<br />

Day-in-the-life-of-a-salesman studies which means spend a day with a<br />

salesman or support function to see the problems through the eyes of the<br />

observed party).<br />

<strong>Sales</strong> Performance Assessment of the <strong>Sales</strong> Performance Management System<br />

Management : understanding which sales key performance indicators (leading and lagging<br />

„Create a<br />

system which<br />

ensures team<br />

work and<br />

shared<br />

success“<br />

KPIs) are used (financial and operational), how these are linked to the<br />

personal goals and compensation as well as incentive structures.<br />

Assessment how well feed back loops work (link to forecasting and planning<br />

& sales execution), assessment which market intelligence exists (customers,<br />

competitors and markets) and how it is used to support sales. Last but not<br />

least assessment which CRM and IT systems are in use to link and display<br />

the information in a concise way.<br />

<strong>Sales</strong> Organization: Assessment of the sales organization (# of FTE, span of control, structure),<br />

management & sales audits, assessment of emotional and sales skills,<br />

assessment of existing training and development concept.<br />

Macro Concept & Based on above assessments identification of gaps and improvement<br />

Business Case: levers, estimation of profit and growth potential, base and stretched target<br />

(per market, market segment, customer segments). Build up of a detailed<br />

project plan for the design and implementation phase including timeline,<br />

milestones for each sub topic, step to milestones and project structure as<br />

well as definition of required resources external, but especially internal<br />

(transformation agents) who will drive the transformation.<br />

Based on conducted management and sales audits a measurement<br />

system is designed to assess the status of transformation in the<br />

organisation (including the measurement of behavioural change).<br />

5


<strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong><br />

The <strong>Kienbaum</strong> Approach – Design & Concept Phase<br />

Design & Concept<br />

Design Micro <strong>Sales</strong> Organization<br />

Design <strong>Sales</strong> Approach / Process (e.g. KAM)<br />

Design Process capturing VOC<br />

Design Performance Management System (incl.<br />

Comp & Ben)<br />

Design Human Capital Development Plan<br />

Design <strong>Sales</strong> Objectives<br />

Design detailed Comm. & Transformation Plan<br />

Design concise KPI / Personal Goal Structure<br />

Implementation<br />

Roadmap<br />

The Design & Concept Phase refines the macro concept for identified<br />

gaps and a future To-Be level to a micro state, producing a detailed<br />

implementation roadmap including information on micro sales<br />

organization, detailed sales process maps with responsibility matrix and<br />

target values.<br />

The management of the processes with a performance management<br />

system is defined (KPI tree, forecast, planning, execution and reporting<br />

loops), Personal goals are aligned to company goals , incentive<br />

structure and compensation structure is clear. The micro design includes<br />

clear target setting for customer and market segments (target revenue<br />

and profitability expectations) as well as the sales approach (eg. Global<br />

Key account management or system partners for A customers, B<br />

Customers with sales teams like technical experts combined with a sales<br />

person and market intelligence sales coordination. C customers will be<br />

handed over to distributors and D customers eventually cut. Rising stars will<br />

be identified and serviced according to revenue and profit expectation.).<br />

Based on the 1. designed processes, 2. job descriptions and 3.<br />

management as well as sales audits (sales & emotional skills) and 4.<br />

training concepts, a first people selection has been done and actions<br />

have been defined (human capital development plan, retention plans of<br />

skills, buy in of skill, outplacement plan). A communication and<br />

transformation plan has been designed to prepare the organisation for the<br />

oncoming implementation.<br />

The <strong>Kienbaum</strong> Approach – Implementation & Sustainability Phase<br />

Implementation<br />

Sustainability<br />

Management<br />

Implementation / Promotion of “new” <strong>Sales</strong> processes, values<br />

& behavior<br />

Implementation of Design<br />

Constant Project Status Control<br />

& Management<br />

Sustainability Plan<br />

Possible Executive Search and<br />

Outplacement<br />

Support of Transformation<br />

Process<br />

End of Implementation/<br />

Start Sustainability Management<br />

Supported<br />

by <strong>Kienbaum</strong><br />

as long<br />

as required<br />

or desired<br />

The Implementation Phase is very much driven by transformation agents<br />

who are coached by <strong>Kienbaum</strong> transformation experts. They are working<br />

against detailed milestones and steps to milestones plans. The<br />

transformation progress is monitored continuously and the real task in<br />

this phase is to make the envisioned changes come true, despite the<br />

typical problems in transformation projects (in the first months when a lot of<br />

work has to be done but typically there are limited results 80% of all<br />

transformation projects are abandoned). A very strong project<br />

management with strong champions in the management ensures the<br />

right prioritisation and training and people development takes care of<br />

the emotional project cycle. The previously described human capital<br />

development and retention as well as (if necessary) outplacement of skills<br />

is ongoing. The projects implementation success is measured weekly on<br />

operational & financial project KPIs and the achievement of the designed<br />

milestones.<br />

After the last milestone sustainability audits, ongoing human and<br />

training development and the right positioning of former transformation<br />

agents ensures sustainability and continuous improvement<br />

6


<strong>Kienbaum</strong> Expertise – Case Study 1<br />

Case Study<br />

Global Chemicals –<br />

Improving a world wide<br />

organization<br />

7<br />

Background<br />

The company founded in 1960s as a joint-venture<br />

between two bigger players, who both covered the the<br />

niche of advanced polymer technology, is a solutiondriven<br />

company. It uses advanced polymer<br />

technology to produce high-performance plastic<br />

materials in a wide spectrum of applications: from<br />

industrial gears to children's toys, and from large<br />

automotive body parts to miniature optical<br />

components. The engineering plastics division of with<br />

a turnover of $1bn, is primarily focused on automotive<br />

and medical markets in Europe and North America.<br />

The administration and research costs, which were<br />

significantly above the benchmark of firms of<br />

comparable size, endangered the division’s capability<br />

of achieving corporate targets.<br />

At the same time sales performance was below<br />

expectations.<br />

The aim of the project was to design a new<br />

organisation and streamline processes in order to<br />

enhance profitable growth, reduce loss drivers,<br />

enhance customer service and accelerate product<br />

development.<br />

<strong>Kienbaum</strong> consultants, in collaboration with the<br />

client, implemented a significant and sustainable<br />

revenue growth and cost-reduction program in a<br />

cross-national environment.


Challenge<br />

After a 6 weeks evaluation phase following problem areas were identified:<br />

» <strong>Sales</strong> and marketing had only an unstructured view of the real voice of<br />

the customer and why the customer would prefer a supplier versus<br />

another (order winner versus order qualifier). No formal process was in<br />

place to capture the real “demand” and to feed it back intelligently to<br />

support the sales process.<br />

» The profitable product portfolio was rather old and new products only<br />

partially proved as rising stars. Some products were not profitable<br />

and each ton sold was profit lost.<br />

» This problem was linked with an unstructured view on the existing<br />

customer base. Customer segmentation, linked service levels and<br />

how to approach each customer segment was not defined at all. The<br />

company relied purely on the personal performance and judgment of<br />

its sales people. On top of that the knowledge of potential customers<br />

currently not in the portfolio was not adequate and also the knowledge<br />

of the competition could be improved.<br />

Approach<br />

» As a result the knowledge and clustering of products in commodities and<br />

specialties was incomplete or wrong and led to wrong pricing decisions.<br />

» The sales process was not efficient. <strong>Sales</strong> people followed a “lonely hunter”<br />

strategy keeping knowledge to themselves and having less than 20% face time<br />

with the customer (from which 17% with existing and well established customers<br />

and only 3% with new customers).<br />

» The sales performance and process varied widely by sales man. There were<br />

hardly any operational KPIs in place to measure operational sales performance<br />

and such the forecast and pipeline accuracy was low (less than 40%!).<br />

» Budgeting performance was poor as bonuses and incentives were only paid on<br />

financial budget numbers which were always lower than actual performance but<br />

going down year by year.<br />

» A compensation assessment showed that compensation, even on the same<br />

organizational level, was in the upper quartile of industry benchmarks.<br />

» Due to the incentive structure there was little interest to work in teams.<br />

The main challenge for the cross-functional team was the redesign and implementation of new processes. In order to<br />

increase the competitive position a continually controlled process was introduced to improve the management of<br />

design and development and design of new products in an efficient and timely manner.<br />

In order to achieve this a “voice of the customer analysis” was done segmented by customers ( For “A” Customers<br />

interviews and questionnaires on several levels, for “B” customers only top management interviews, but always including<br />

production and supply chain to get knowledge of their needs eg. 0 ppm strategy).<br />

More efficient processes were supported by a cost to serve model, adjusting the customer service to the customer<br />

margin and by creating service packs per customer. Key accounts were defined by clear rules after developed by a<br />

dedicated team.<br />

8


Approach<br />

All these activities were defined in a master account<br />

plan that linked the activities to revenue goals<br />

monitoring the achievement of business goals to allow<br />

fast action in case of off-track performance. The pricing<br />

of the most essential processes of the company was<br />

reviewed. As a result a new procedure was designed to<br />

improve the price setting by prevention of the setting of<br />

unprofitable prices even if it meant the loss of revenue.<br />

The sales organization which was previously directly<br />

linked to regional heads was organized as a matrix and<br />

according to the new processes staffed with suitable<br />

personnel. Back office activities were clustered in a<br />

shared service model (market intelligence)<br />

(Accompanied by a training program and buy in of new<br />

skills).<br />

9<br />

Results<br />

» 1 year after implementation revenue growth 18%<br />

» 1 year after implementation profit up by 27%<br />

» New processes installed and organization in place with<br />

15% cost savings<br />

» New Customer Service and Management Process<br />

» Behavioural change through a international design and<br />

development of processes, systems, and coaching of<br />

management<br />

» Implementation of a global Performance Management<br />

System<br />

In co-operation with the transformation agents of the customer new customer service procedures<br />

were conceived. The sales costs were significantly reduced by omission of all activities, which are<br />

not valued by the customer. Special attention was devoted to the elimination and improvement of<br />

inter- and intradepartmental interfaces.<br />

The business management process was standardized to support a consistent reporting of<br />

financial and operational key performance indicators (KPI) leading to fact-based management<br />

decisions. These KPI's were frequently reviewed. The management was trained and coached to<br />

react on variations and fluctuations in business in a timely manner.<br />

The Company's goals were aligned, linked and broken down to each department, team and<br />

individual not only based on financial but also operational Key performance indicators. These<br />

KPIs were differentiated between leading and lagging KPIs and the leading KPIs were used for<br />

forecasting and planning.<br />

For Key accounts and selected rising stars teams were created with clear roles and<br />

responsibilities. The team was purely measured and incentivized on the team's result and not on<br />

individual performance. The team contained market intelligence back office support, a technical<br />

support (partly customer facing) and a customer facing sales person (he/she channelled all<br />

conversations, no direct conversation with technical sales guy).<br />

C customers were handed over to distributors who were incentivized to optimize profits (they<br />

got a share of 50% of profit above baseline).<br />

D customers were discussed with distributors and some were developed some were cut out.<br />

Partnerships were developed with “A” customers to develop a better and realistic forecast to<br />

reduce working capital for the customer (order winner!). This included the plan for system joint<br />

ventures (the plan was to offer products which can be used and sold as solutions to a<br />

customer)<br />

Unprofitable products were phased out.<br />

A training and development program was put in place to support the teams. <strong>Sales</strong> people with<br />

emotional deficiencies were exchanged and outplaced.<br />

Transformation Agents were put in management positions and are 2 years later driving new<br />

initiatives within a continuous improvement Cycle.<br />

Within the project change agents had a special training in as lean six sigma black belts and<br />

project management.


<strong>Kienbaum</strong> Expertise – Case Study 2<br />

Case Study<br />

<strong>Marketing</strong> & <strong>Sales</strong><br />

Performance – Market share<br />

meets profitability<br />

10<br />

Challenge<br />

The described company is the world’s leading<br />

producer of sodium bicarbonate, popularly known as<br />

baking soda, a natural product with a multitude of<br />

uses. the company’s brand is one<br />

of USA’s and Europe’s most trusted trademarks. Its<br />

brands can be found in an remarkable 90% +<br />

of American homes and 20% of West European homes.<br />

Its Specialty Products Division (SPD)<br />

sells speciality chemicals, animal nutritional feed<br />

ingredients and specialty cleaners to a variety of<br />

industries. SPD generates just over 15% of the<br />

company’s £850 million revenues.<br />

SPD is striving to grow its revenues by 36% over<br />

three years, with 15% operating profit and 15%<br />

ROCE achieved. While SPD had strong market share<br />

and was perceived as a high-value provider, its<br />

selling costs were high. An assessment conducted<br />

by <strong>Kienbaum</strong> consultants showed that substantial<br />

improvement in marketing and sales process efficiency<br />

was needed for SPD to reach its strategic growth and<br />

profitability goals.


Approach<br />

SPD chartered a <strong>Marketing</strong> & <strong>Sales</strong> team comprised of<br />

SPD personnel from across the division’s three<br />

business lines as well as <strong>Kienbaum</strong> consultants. The<br />

team’s overarching mission: Rigorously align <strong>Marketing</strong><br />

& <strong>Sales</strong> behaviours with the SPD business strategy.<br />

Keys to fulfilling this mission included:<br />

» Manage <strong>Marketing</strong> & <strong>Sales</strong> via a Business Process<br />

Management system based on Key Process<br />

Indicators (KPIs)<br />

» Apply a cost to serve model to segment customers<br />

and quantify profitability improvement<br />

opportunities<br />

» Document clear actions for each customer, to<br />

pursue the profitability improvements<br />

» Systematically pursue <strong>Marketing</strong> & <strong>Sales</strong><br />

profitability opportunities, via formal systems and<br />

sustainable operating procedures<br />

To begin, the team and analysed the baseline <strong>Marketing</strong><br />

& <strong>Sales</strong> performance and considered the root cause<br />

issues identified in the assessment i.e. price variations,<br />

lack of rationalisation of the distribution network and<br />

special services being provided to customers without<br />

cost recovery.<br />

The team then applied a customer segmentation tool, to<br />

objectively gauge the business value each of SPD’s<br />

nearly 600 business customers. The tool segmented<br />

customers based on revenue, profitability, strategic<br />

importance and buying behaviour. Roughly a third of<br />

the division’s customers were found to be unprofitable,<br />

as served under current <strong>Marketing</strong> & <strong>Sales</strong> practices.<br />

The team then defined service levels appropriate to<br />

each customer segment. This entailed evaluating<br />

more than 30 specific services SPD typically provides,<br />

in terms of their cost and their value to customers.<br />

With the customer segmentation and service level<br />

definitions in hand, the team was able to map out<br />

formal transition plans for each SPD customer. The<br />

transition plans rationalised pricing, distribution and<br />

services in accordance with the division’s overall<br />

revenue, profitability and earnings goals. A new<br />

account screening process was also implemented to<br />

maintain the profitability of the customers base as<br />

new customers are added.<br />

From there, the focus was on integrating and<br />

formalising the new <strong>Marketing</strong> & <strong>Sales</strong> practices. Key<br />

steps in this part of the effort included:<br />

11<br />

Results<br />

» Identified £6.9 million in profitability<br />

improvement opportunities<br />

» Account management action plans launched to<br />

harvest £ 1.5 million in annualized benefits<br />

» Cost to serve model defined, installed and<br />

automated<br />

Client Comments<br />

“The project is a success, we accomplished our<br />

short-term financial targets and made all our<br />

milestones. More important, the structures and<br />

mindset are now in place for the SPD to credibly<br />

go after our stretch goal to reach £160 million in<br />

sales/15% operating profit/15% ROCE. At this point,<br />

it´s up to us. We are now positioned to deliver the<br />

results.”<br />

» Develop and install <strong>Marketing</strong> & <strong>Sales</strong> Performance<br />

Management System, KPIs and targets; use at<br />

appropriate meetings<br />

» Realign sales force to ensure highest levels of<br />

service to most profitable customers segments<br />

» Align account and incentives plans to updated<br />

account management priorities<br />

» Redesign sales evaluations based on strategic KPIs<br />

» Enact structural changes to sales and marketing<br />

teams, based on strategic direction chosen


<strong>Kienbaum</strong> Expertise – <strong>Sales</strong> & <strong>Marketing</strong> <strong>Excellence</strong> in Chemicals<br />

and Pharma as well as in other Industries<br />

Why <strong>Kienbaum</strong><br />

» <strong>Sales</strong> & <strong>Marketing</strong> Expertise in Chemical & Pharma as well as other industries.<br />

» Proven expertise of successful and sustainable transformation and implementation.<br />

» <strong>Kienbaum</strong> shares risk and success with its customers (retention & success fee model).<br />

» <strong>Kienbaum</strong> can support the whole transformation value chain from process and system analysis<br />

to management and compensation audits and even skill retention and outplacement, it offers<br />

specialized service concerning virtually all human resource issues.<br />

» <strong>Kienbaum</strong> offers senior teams and consultants who can lead, coach and enable customer’s<br />

transformation agents to make the transformation not only sustainable, but a base for further<br />

continuous improvement (e.g. Lean Six Sigma development & qualification).<br />

12


1000<br />

Über <strong>Kienbaum</strong><br />

Revenue 2003-2007<br />

Employees<br />

800<br />

600<br />

400<br />

200<br />

0<br />

Our Guiding Vision<br />

Kontakt:<br />

70 Mio. €<br />

<strong>Kienbaum</strong> Management Consultants GmbH<br />

Unternehmensbereich Industrie<br />

Georg-Glock-Straße 8<br />

40474 Düsseldorf<br />

Matthias Brey<br />

Director<br />

77 Mio. € 84 Mio. €<br />

433 439 448<br />

+49 (2 11) 96 59 – 263<br />

Fax +49 (2 11) 96 59 – 335<br />

Mobil +49 (172) 8810483<br />

95 Mio. €<br />

490<br />

E-mail: matthias.brey@kienbaum.de<br />

Revenue<br />

(in Mio. EUR)<br />

117 Mio. €<br />

565<br />

2003 2004 2005 2006 2007E<br />

100<br />

80<br />

60<br />

40<br />

20<br />

0<br />

13<br />

Our Global Presence<br />

Americas:<br />

Argentina<br />

Brazil<br />

Canada<br />

Chile<br />

Mexico<br />

USA<br />

Venezuela<br />

Europe<br />

Austria<br />

Belgium<br />

Croatia<br />

Czech Republic<br />

France<br />

Germany<br />

Hungary<br />

Ireland<br />

Netherlands<br />

Poland<br />

Russia<br />

Slovakia<br />

Slovenia<br />

Sweden<br />

Switzerland<br />

United Kingdom<br />

Asia Pacific:<br />

Australia<br />

Greater China<br />

Hong Kong SAR<br />

Taiwan<br />

People’s Republic of<br />

China<br />

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“Pragmatic management consulting with explicit consideration for the crucial link between the<br />

driving forces behind company value and the levers of human resources”

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