Managing Cash Flow

150 Cost Reduction Analysis Procedures
• Relationship with assigned salesperson
• If sales have decreased, why, and are customers buying elsewhere?
• What would help them to buy more?
• Positive and negative experiences
• What the company does right—and wrong
• Competitor relationships and their advantages
• Type of contacts
• Effectiveness. Personal contact, phone call, memos
• Relationship. Contacts to salespeople (present and future)
• Quality of contacts by salesperson
• Contact procedures by each salesperson
Factors for Benchmarking
• Process. Sales contact procedures and follow-up
• Timeliness. How responsive is sales function to customer?
• Quality. Relationship with customer, products, sales follow-up
• Cycle. How often is customer contacted - pre sale, during sale, and after
sale?
• Numbers
• Contacts/sale
• Sales forecast/actual sales
• Sales/sales efforts
• Sales cost/gross sale/net profit on sale
Conclusions/Inferences
• The greater the sales contacts/customer service, the greater possibility of
increased sales.
• Sales forecasts have little basis in reality and are not related to real sales
efforts or plans.
• The greater the seniority of the salesperson, the less sales efforts and fewer
customer contacts.
• Sales compensation is based more on seniority than on efforts and results.
• Sales forecasts are based on historical sales and cannot be counted on to
plan production based on real customer orders.
• There is little incentive for older sales personnel to fully service present
customers and bring in new customers.
External Benchmarking Targets
As a result of the internal benchmarking work steps, the review team should identify
other areas for external benchmarking including the identification of activity
drivers and performance measures, such as those listed here: