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Sales Maximization Plan


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The Sales Maximization Plan was developed to accurately segment a customer base over time using key indicators to point a sales organization to operate in a consistent way that delivers results.

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Sales Maximization Plan

  1. 1. Improving Outside Sales Effectiveness & Efficiency January 23, 2009 Final Tollgate
  2. 2. Project Process Sheet DEFINE 100% 10/08 11/07 Define 1 Measure 2 Analyze 3 Improve 4 Control 5 Key Deliverables <ul><li>Required </li></ul><ul><li>List of Project CTQs </li></ul><ul><li>Team Charter </li></ul><ul><li>High Level Process Map (SIPOC) </li></ul><ul><li>Tools That May Help </li></ul><ul><li>Project Risk Assessment </li></ul><ul><li>Stakeholder Analysis </li></ul><ul><li>Communication Plan </li></ul><ul><li>High Level Project Plan </li></ul><ul><li>In Frame/Out of Frame </li></ul><ul><li>Customer Survey Methods (focus groups, interviews, etc.) </li></ul><ul><li>Elevator Speech </li></ul><ul><li>Required </li></ul><ul><li>Data Collection Plan </li></ul><ul><li>CTQ Worksheet: </li></ul><ul><li>Operational definition, Specification limits, target, defect definition for Project Y(s) </li></ul><ul><li>Measurement System Analysis </li></ul><ul><li>Tools That May Help </li></ul><ul><li>QFD </li></ul><ul><li>Gage R&R/Attribute R&R </li></ul><ul><li>Detailed Process Map </li></ul><ul><li>FMEA </li></ul><ul><li>Pareto Analysis </li></ul><ul><li>Required </li></ul><ul><li>Baseline of Current Process Performance </li></ul><ul><li>Graphical analysis of output (Y) </li></ul><ul><li>Statistical Goal Statement for Project </li></ul><ul><li>List of Statistically Significant Xs </li></ul><ul><li>Tools That May Help </li></ul><ul><li>Six Sigma Process & Product Reports </li></ul><ul><li>Benchmarking </li></ul><ul><li>Fishbone Diagram </li></ul><ul><li>Hypothesis Testing </li></ul><ul><li>Regression Analysis </li></ul><ul><li>Required </li></ul><ul><li>List of Vital Few Xs </li></ul><ul><li>Transfer Function(s) </li></ul><ul><li>Optimal Settings for Xs </li></ul><ul><li>Confirmation Runs/Results </li></ul><ul><li>Tolerances on Vital Few Xs </li></ul><ul><li>Tools That May Help </li></ul><ul><li>Design of Experiments </li></ul><ul><li>New Process Maps </li></ul><ul><li>FMEA on new process </li></ul><ul><li>Process Modeling </li></ul><ul><li>Brainstorming </li></ul><ul><li>Required </li></ul><ul><li>MSA Results on Xs </li></ul><ul><li>Post Improvement Capability </li></ul><ul><li>Statistical Confirmation of Improvements </li></ul><ul><li>Process Control Plan </li></ul><ul><li>Process Owner Signoff </li></ul><ul><li>Tools That May Help </li></ul><ul><li>Control Charts </li></ul><ul><li>Hypothesis Testing </li></ul><ul><li>CAP Plan </li></ul><ul><li>Documentation/SOP </li></ul>Overall Project Completion Percentage 10/07 1/08 2/08 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X DEFINE Step A: Identify Project CTQs Step 1: Select CTQ Characteristics Step 4: Establish Process Capability Step 7: Screen Potential Causes Step 10: Define & Validate the Measurement System on Xs Step B: Develop Team Charter Step C: Define Process Map Step 2: Define Performance Standards Step 3: Measurement System Analysis Step 5: Define Performance Objectives Step 6: Identify Variation Sources) Step 8: Discover Variable Relationships Step 9: Establish Operating Tolerances Step 11: Determine Process Capability Step 12: Implement Process Control
  3. 3. Project Charter DEFINE <ul><li>To improve overall agency performance . </li></ul><ul><li>Agency segmentation scheme set for all states by 1/1/08 </li></ul><ul><li>Creation of action matrix that suggests what action a sales manager should take within an agency </li></ul><ul><li>Creation of monthly agency performance improvement plan that forces agents to improve or move into cancellation status by 10/1/08 </li></ul><ul><li>Creation of monthly agency cancellation lists based on agency performance over at least a 6 month period by 10/1/08 </li></ul><ul><li>Accurate tracking methods to assess successful actions </li></ul><ul><li>Assign sigma values to the sales process in each state </li></ul><ul><li>Track sigma values historically </li></ul>Business Case (Including High Level Benefit Analysis): In Scope: Specific Problem Statement: Specific Goal Statement: Definition of a Defect for This Project: Out of Scope: Sales in tangible goods industries are measured first in terms of quantity. In insurance driven industries, contracts are exchanged in place of tangible goods, so successful sales are measured by both quality and quantity . At the root is cost of goods sold. In an insurance company, understanding and maximizing the most profitable segment of agent is imperative to the bottom line profitability, reflective of cost of goods sold. At the same time, recognition of unprofitable partners or agencies is also key to eliminating bad business in a more timely fashion than is usual at the present time. Therefore, implementing an agency segmentation system would both increase profitable premium while at the same time cut unprofitable premium, resulting in loss ratio improvement. At 1% improvement, the company would see a bottom line number of $6 million. <ul><li>Agents that experience negative movement month to month on the agency life cycle curve </li></ul><ul><li>Agents that experience no movement for at least 4 months </li></ul><ul><ul><li>Both are examples of agents that will be cancelled </li></ul></ul><ul><li>Sales actvity relating to actions taken outside production driven goals </li></ul><ul><li>Agency cancellations due to shock losses </li></ul><ul><li>Agency cancellations due to legal issues </li></ul><ul><li>Actions taken in departments other than Inside/Outside Sales and Agency Operations </li></ul>FirstComp/FCUG/FIA currently contracts with 7305 main and satellite agencies in 29 states nationwide. We currently do not have a plan in place that uses historical data to cancel agents, which has led to low cancellation rates. Implementing a system to track month over month progress for agencies will enable us to both grow profitable agencies while at the same time cut unprofitable agencies all in a timely fashion. <ul><ul><li>Sales person activity </li></ul></ul><ul><ul><li>Entire agency base </li></ul></ul><ul><ul><li>Agencies cancelled due to unprofitable books of business </li></ul></ul><ul><ul><li>Agencies rewarded for appropriate levels of production </li></ul></ul><ul><ul><li>Historical data for all states </li></ul></ul>Problem Statement
  4. 4. Project Team Information DEFINE XXX Big Y: Energized Employees Operational Excellence Financial Performance Customer Satisfaction X Outside Sales Tollgate Review Dates Project Lead (BB): Project Coach (MBB): Project Champion: Team Members: Resource Plan General Information Tollgate Date Signoff (xx/xx/xx) Contact Information for Project Lead: Define Measure Analyze Improve Control Industry/Function: Josh Heebner Tim Chlebinski Mark Thramer SME SME SME SME Kat Baum Stacey Jensen Tanya Bacon Bridget Primavera Josh Heebner 401-338-4588, 401-681-5142 [email_address] X X 11/1/07 COMPLETE 12/1/07 COMPLETE 2/1/08 COMPLETE 2/15/08 COMPLETE 10/1/08 COMPLETE X
  5. 5. SIPOC – Current Process DEFINE
  6. 6. Identifying Project CTQs DEFINE
  7. 7. Kano Analysis DEFINE Tracking for management tracks progress Utilization of FirstComp market share within the agency Tracking is easy to follow and implement in sales manager routine Utilization of Earned Premium per Indemnity count ratio Utilization of Luke’s legacy SMP studies Utilization of loss ratio Actions defined in comparison to segment Tracking movement of segments over time Utilization of hit ratios (I/Q, I/S, Q/S) Agencies Segmented Delighters Must-Be Primary Satisfiers
  8. 8. Agency Improvement Baseline <ul><li>No way to identify which agencies are high or low performers all located in one space </li></ul><ul><ul><li>High and low performance metrics existed, but they were not located in the same place </li></ul></ul><ul><li>Sales measurements and metrics existed </li></ul><ul><ul><li>Not used in concert among other departments </li></ul></ul><ul><li>Determine what to use to evaluate agencies </li></ul><ul><ul><li>We were able to do so as a result of CTQs </li></ul></ul><ul><li>In the absence of not having a baseline, we were forced to create one </li></ul>MEASURE
  9. 9. Development of the Segmentation Scheme <ul><li>An unanticipated result from measure was the development of a scheme to build analytics around agency metrics that allowed segmentation, identification, and action. </li></ul><ul><li>Analysis of the data followed a pilot roll out in NH. </li></ul>DMADV
  10. 10. Data Collection Plan MEASURE
  11. 11. Data Segmentation MEASURE BEHAVIOR Grade Count % A 2 1.46% B 12 8.76% C 64 46.72% D 34 24.82% F 25 18.25% POTENTIAL Grade Count % A 61 44.53% B 33 24.09% C 6 4.38% D 3 2.19% F 3 24.82% RESULTS Grade Count % 1 23 16.79% 2 7 5.11% 3 4 2.92% 4 24 17.52% 5 79 57.66%
  12. 12. SMP Development MEASURE BEHAVIOR – Measures submit, quote, and bind behavior A = 100% average of I/Q, I/S, Q/S B = 60 – 99.99% avg of I/Q, I/S, Q/S C = 40 – 59.99% avg of I/Q, I/S, Q/S D = 30 – 39.99% avg of I/Q, I/S, Q/S F = 0 – 29.99% avg of I/Q, I/S, Q/S POTENTIAL – Measures inforce premium to total WC Volume F = 100% Market Share D = 60 – 99.99% Market Share C = 30 – 59.99% Market Share B = 10 – 29.99% Market Share A = 0 – 9.99% Market Share RESULTS – Measures Loss Ratio and Earned Per Indemnity 1 = 40 – 100% Loss Ratio 1 = $0-$50,000 Earned/Indemnity (E/I) 2 = 20 – 39.99% Loss Ratio 2 = $50-$70,000 E/I 3 = 10 – 19.99% Loss Ratio 3 = $70-90,000 E/I 4 = 0.01 – 9.99% Loss Ratio 4 = $90=$110,000 E/I 5 = 0 Loss Ratio 5 = $110,000+ E/I Optimal Agency Score : AA5 Worst Agency Score : FF1 *NH Specific Numbers*
  13. 13. Pareto Charts ANALYZE Data as of 9/31/2008 BEHAVIOR Grade Count % A 493 7% B 740 11% C 3228 49% D 1589 24% F 549 8% POTENTIAL Grade Count % A 5123 74% B 752 11% C 366 5% D 227 3% F 493 7% RESULTS Grade Count % 1 646 10% 2 143 2% 3 92 1% 4 154 2% 5 5564 84%
  14. 14. SMP Life Cycle Diagram ANALYZE The Life Cycle of An Agency Phase DG/HM Visit Recognition Testing Production Appointment Optimal Penetration Book Saturation HIGH MAINTENANCE LOW MAINTENANCE MISFITS MISFITS R A T P OP BS Underwriting Visit X-date promo/ Relationship Bldg Maintenance Mktg
  15. 15. Potential Problems Matrix DEFINE
  16. 16. Ishikawa Diagram ANALYZE Led to creation of action matrix Led to creation of Scorecard and Dashboards
  17. 17. Agency Segmentation / Identifier / Action Matrix IMPROVE New Agency Starting Point
  18. 18. Pilot and Full Action Plans / Responsibility Chart IMPROVE
  19. 19. Control Plan CONTROL
  20. 20. SMS Documentation / Agency PIP & Cancel Lists CONTROL
  21. 21. Month Over Month Agency Movement CONTROL
  22. 22. Positive/Negative Agency Count Tracking CONTROL <ul><li>76% of the states experienced positive/held steady movement (12/19) </li></ul><ul><li>Of the remaining 24%, 71% of those states experienced: </li></ul><ul><ul><li>There was no SM for that time period </li></ul></ul><ul><ul><li>The SM was laid off/fired </li></ul></ul><ul><li>The entire West region experienced positive movement </li></ul><ul><ul><li>HI was the largest mover </li></ul></ul><ul><li>The East region only had Tier 3 states move in a negative direction </li></ul><ul><ul><li>CT was the largest mover </li></ul></ul>
  23. 23. Positive/Negative Agency Movement Tracking CONTROL National
  24. 24. Positive/Negative Agency Movement Tracking CONTROL Midwest West Southeast Northeast
  25. 25. Current Process Map CONTROL Changes to the process all reside in the Pre-call Planning Stage (originally 9 steps)
  26. 26. FMEA CONTROL 540 point drop 558 point drop 378 point drop
  27. 27. Control Summary <ul><li>Control Plan Highlights </li></ul><ul><li>Monthly monitoring of Agency movement in nationally, regionally and state levels. </li></ul><ul><li>Sales owns both implementation and tracking </li></ul><ul><li>FMEA has shown where technology can improve the process in the future </li></ul>CONTROL <ul><li>Benefits of Project </li></ul><ul><li>Agency Segmentation has been created and implemented </li></ul><ul><li>The action matrix has been created to guide sales managers through agency segments </li></ul><ul><li>Dashboards have been created to track success </li></ul><ul><li>Sigma Levels/Improvement </li></ul><ul><li>0.8 Sigma </li></ul><ul><li>23.5% Yield </li></ul><ul><li>Communication & Translation </li></ul><ul><li>Weekly regional meetings to discuss successes of SMP </li></ul><ul><li>Featured at the National Sales Meeting to introduce to company </li></ul><ul><li>Files save on K:drive for reference </li></ul>
  28. 28. Current Control Data Locations <ul><li>All current SOPs: </li></ul><ul><ul><li>K:SalesSMP by statesTemplatesSMP TemplateSOP </li></ul></ul><ul><li>All Agency State Segmentation Curves </li></ul><ul><ul><li>K:SalesSMP by statesSALES REGIONSALES STATE </li></ul></ul><ul><li>All Agency State Dashboards </li></ul><ul><ul><li>K:SalesSMP by statesSALES REGIONSALES STATE </li></ul></ul>APPENDIX