Richard E. Buehrer: Highly Effective Sales People: From Key Challenges to Best Practices

Highly Effective Sales People: From Key Challenges to Best Practices Presented by Richard E. Buehrer, PhD Director and Professor Edward H. Schmidt School of Professional Sales College of Business Administration University of Toledo Toledo, Ohio, USA Sales Management Forum, Athens, Greece September 21, 2007

Key Challenge Number One

Constant downward pressure on profit margins

Firms face tremendous pressure to increase outputs while decreasing or maintaining inputs

To stay competitive large and small firms alike face ever increasing pressure from consumers for lower prices while the cost of goods sold increases .

“ In our business we are continually asked to reduce cost while increasing our output” Stu Hankin, VP Sales Hess Corp.

Sales Management Forum Athens Greece September 21, 2007

Key Challenge Number Two

How do you find a point of differentiation in the marketplace?

Your competition can duplicate your price and quality. It is the highly effective sales person that will make the difference”

Sales Management Forum Athens Greece September 21, 2007 Howard Stevens and Theodore Kinni Achieving Sales Excellence , 2007

Key Challenge Number Three

How do you deal with the need to be faster to the marketplace?

“ For over 100 years we (3M) have always been known for innovation. Today our innovative products are copied by competition within six months.”

Robert McDonald VP Marketing & Sales, 3M

Key Challenge Number Four

How do you find and keep the very best people?

In the 21 st century your sales force has become the main factor that gives you a competitive advantage.

“ The competitive advantage conferred by sales force effectiveness has just begun to emerge”

Howard Stevens and Theodore Kinni

Achieving Sales Excellence , 2007

Key Challenge Number Four (continued)

Countries Having the Most Difficulty

Costa Rica 93%

Mexico 82%

New Zealand 62%

Australia 61%

Japan 61%

US 43%

Countries Having the Least Difficulty

India 9%

Ireland 17%

Netherlands 17%

China 19%

Global Talent Shortage Survey

Sales Management Forum Athens Greece September 21, 2007 Manpower, Inc. 2007

Analyzing Your Customer ‘ Satisfying customers is not enough, customers want to be completely satisfied’ “ They are our best customer, so I don’t have to spend much time with them” Terry Martin, 2007 Sales Management Forum, Athens, Greece September 21, 2007

Analyzing Your Customer

A major difficulty many companies have is distilling the enormous amount of information they’ve gathered into a coherent picture that yields insights about their customers potential and the strategies for developing the business relationship.

The more you know the better you can identify and meet your customers’ needs .

Libbey Inc. (a Case Study)

Who is Libbey? Sales Management Forum Athens Greece September 21, 2007

The leading producer of glass tableware in North America; second largest in the world

2006 Net Sales - $568.1 million

Leading brand in U.S. consumer glassware

Libbey Glass, Crisa, Royal Leerdam, Crisal, Syracuse China, Traex

Leading provider of foodservice tableware

Retail Marketplace Challenges for Libbey Sales Management Forum Athens Greece September 21, 2007

Globalization

Consolidation

Retailer Leverage

Price/Margin Pressure

Consumer Knowledge

Differentiation (Private-Label)

Newness

Your Customer’s Industry and Market

Your customers compete in a definable industries.

Understanding the competitive landscape in which your customers operates is critical to understanding the decisions they make as an organization.

Sales Management Forum Athens Greece September 21, 2007 Owens Corning

Keys to Supplier Success at OC

Suppliers to OC must:

1. Have clear expectations

2. Use their top talent

3. Have good performance metrics

4. Have good problem solving skills

To accomplish these task requires a highly effectiveness sales force

Owens Corning Supplier Categories

Strategic

Partner

Key Suppliers

Emerging Suppliers

Legacy Suppliers

Tactical / Transactional Suppliers

Non-Strategic/Transactional

As you examine an industry, ask the following questions:

1. Is your customer ’ s business in sync with developing changes in the marketplace?

2. Are entry barriers a powerful force in your customer ’ s industry?

3. Are your customer’s products threatened by substitutes .

4. Are the buyers a powerful force in your customer’s industry?

5. Are the suppliers in your customer’s industry powerful ?

6. Is there intense rivalry among competitors ?

Your Customer's Strategies and Synergies

Your customers direction—vision, mission, strategies, plans.

There intended synergies with partners, allies, and other segments of the market.

As they formulate their direction they are responding to their view of their industry/marketplace and articulating the role they see themselves playing

An analysis of your customer’s strategic direction is all at a high level, and it’s only meaningful if they use your products strategically or if your product have broad impact on their business

Your Customer’s Structure and Management

It is important to understand the impact of your customer’s organizational structure and management system on how they operate—specifically in how they use what you sell and how they make the buying decision for your type of product.

Customer profile should describe how they are managed; how buying decisions are made, and who make them.

Your Customer’s Buying Process

How do they buy your product?

How is the need for your product identified?

How are the requirements and specifications identified?

Do they have a process for soliciting bids?

What guidelines do they have for selecting suppliers?

What factors are most important in their selection decision?

How do they ensure they are getting the best solution?

Does their process allow access to key people?

Your Customer’s Performance

You should be aware of how your customers organization is, and has been, performing. Key questions to ask:

What are their performance goals?

How do they measure performance?

What are the gaps in their performance?

How are they performing financially?

What are their core competencies?

Doing a Customer SWOT Analysis

Allows you to identify areas where your customer is strong or weak and where they have opportunities or threats.

Strengths and weaknesses consist of internal factors that make a company strong or weak.

Opportunities and threats are external factors that are favorable or unfavorable towards the company.

Building Strong Customer Relationships

“ Strong customer relationships don’t just happen….they have to be carefully constructed.”

(David Shapiro)

The advantage of a strong customer relationship is power.

Sustaining Institutional Relationships

Attack complacency at your company

Build a “zippered” network

Note: a zippered network is the relationship between key people at ALL levels in your company and the customer’ organization.

Terry Bacon, 1999

Best Practices for Constructing a Zippered Network

Know how your customer is wired

Informal structure, communication patterns, culture

Identify the rising stars

They are given the most important projects

They are today’s influencers and tomorrow’s decision makers

Identify the right functional and political connections

Best Practices for Constructing a Zippered Network (continued)

Determine who has the right chemistry

Identify the best relationship builders

Determine each customer executive’s expectations

Build bonds with both people and positions

Owens Corning “Zippered Network” Sales Management Forum Athens Greece September 21, 2007

Executive Sponsor

Overall relationship owner

Sets strategic direction for the relationship

Develops the relationship

Attends executive briefing sessions

Acts as final escalation point for disputes

Relationship Manager

Point person(s) at the day to day operational level

Agreement on roles and responsibilities

Communicates performance and expectations

Acts as a first level escalation point within OC

Implements governance processes

Sourcing Relationship Manager

Single point of contact for all sourcing related activities

Maintains the Partner scorecard

Jointly communicate performance and expectations

Building and Managing Relationships: “The 21 st Century Asset” ( NIU Journal Sales & Major Account Mgt.)

“ Relationships which are crucial to your business’ success need to be managed & protected as an organizational asset.”

“ First and most importantly relationships as organizational assets must be seen as a high-level, cross functional initiative that is driven from the top and throughout the infrastructure of the company”