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Best sales practices, bucharest 2012 march 1, mba masterclass

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Presentation by Sandy Vaci on Best Sales Practices held at Maastricht School of Management Romania on the 1st of March 2012

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Best sales practices, bucharest 2012 march 1, mba masterclass

  1. 1. 1 Global Best Sales Practices “How to Beat the Recession and Come Out Ahead!” MBA Master Class MSM, Romania Bucharest, March 1, 2012 www.msmro.org facebook.com/msmro @msmromania SANDY VACI Adjunct Senior Lecturer sandyvaci@t-online.hu +36 70 43 43 284
  2. 2. 2 Sandy Vaci - Introduction Personal • 3 home bases (Toronto, Vienna, Budapest • 2 citizenships (Canadian, Hungarian) • 1 wife (for 25 years) • Too many interests to list Current Engagements (samples) • Senior Lecturer, Maastricht School of Mgmt • Senior Lecturer, CEU Business School • Chairman, Credit Bank of Moscow (RUS) • Partner, Leaders’ Den Board Practice (UK) • President, Resp’y Patients’ Soc’y (HU) • Author, SearchingFinance Publishing (UK) • Advisor (Lever, WorldBank, Teva Pharma…) Past Engagements • 30 years, 4 continents, 50 countries • P&G North Am, Citibank Global, Cadbury Int’l, Raiffeisen CEE, Royal Trust Cda, CIBC, Royal Bank of Scotland, 3-i Inc., etc.
  3. 3. 3 ““A goodA good crisis is acrisis is a terribleterrible things tothings to waste!”waste!” Paul Romer, Senior Fellow Stanford University ““We alwaysWe always make ourmake our worstworst decisionsdecisions during theduring the best of times”best of times” Jamie Dimon, CEO JP Morgan
  4. 4. 4 Boost efficienciesBoost efficiencies  Build it the right way: align, integrateBuild it the right way: align, integrate  Plan your way to successPlan your way to success  Use the best ideas but keep it simpleUse the best ideas but keep it simple Maximize channel innovationMaximize channel innovation  Own the revenue (RELATIONSHIP), not the cost (CHANNEL)Own the revenue (RELATIONSHIP), not the cost (CHANNEL)  Keep controlKeep control  Innovate, beware of the “basics”Innovate, beware of the “basics” Beat the Recession!Beat the Recession! 1) Boost efficiencies with “global best sales practices”1) Boost efficiencies with “global best sales practices” 2) Implement / integrate channel innovation for “first mover’s2) Implement / integrate channel innovation for “first mover’s advantageadvantage
  5. 5. 5 Boost efficienciesBoost efficiencies  Build it the right way: align, integrateBuild it the right way: align, integrate  Plan your way to successPlan your way to success  Use the best ideas but keep it simpleUse the best ideas but keep it simple Maximize channel innovation  Own the revenue (RELATIONSHIP), not the cost (CHANNEL)  Keep control  Innovate, but beware of the “basics” Beat the Recession!Beat the Recession! 1) Boost efficiencies with “global best sales practices”1) Boost efficiencies with “global best sales practices” 2) Implement / integrate channel innovation for “first mover’s2) Implement / integrate channel innovation for “first mover’s advantageadvantage
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  13. 13. 13 Cross Functional Integration – Best Practice Example, Banking 13 Step Activity Responsibility 1 Prospect list generation Marketing 2 List review / approval Credit Risk 3 Direct mail Marketing 4 Follow up call Call Centre 5/A Mail reply processing Operations 5/B Follow up sales meeting Sales 6 Credit approval Credit Risk 7 Disbursement Operations 8 Final check, follow up Sales
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  15. 15. 1515 Sample Decision Tree for Intervention, Tracking Leading Indicators and Conversion Efficiencies (First Few Steps Only) Results Not Met Call-to-Contact Low? Not Enough Calls Made? Fix Call List Not Enough Not Efficient? Time? Good Results Results Still Low Capacity Coach in Time List Still Upgrade Call Re-Allocation Management Not OK Skills
  16. 16. 1616 Conversion Efficiency Benchmarks (in %’s) MAX MID MIN Call-to-Contact 85 50 25 ↓ Contact-to-Meeting 70 30 15 Meeting-to-Sales 85 60 35 Notes: 1. “Call-to-Contact” results depend on quality of call list – right phone numbers, etc. 2. “Contact-to-Meeting” depends on whether follow-up, warm, or cold call; strength of offer, etc. 3. “Meeting-to-Sales” depends on strength of sales pitch, product offer, sales person’s ability
  17. 17. 17 Case Study – Key Components • Sales Objectives – Number of selected (focus) products to be sold monthly, split by week and individual (no aggregated volume targets) • Sales Activities / Processes – Introducing active part (outbound x-sell calls) alongside standard passive one, structured approach and conversion stages, daily activity / opportunity planning per individual • Sales Management – Daily, weekly, monthly sales meetings, formal coaching, on-going process planning and performance review (branch sales board), team work sales effort enforcement
  18. 18. 18 Case Study – Key Components • Tracking and Control – Tracking the sales performance on a daily basis, per branch and front-line individual • Marketing Support – X-sell prospect list selection with opportunity rating • Reward Scheme – Simple prize based scheme (e.g. dinners)
  19. 19. 19 Case Study – Enablers Key Enablers • Branch Sales Capacity – Branch sales capacity measured before start and used for objective set-up and daily activity planning (incl. assessment of the spare sales capacity vs. capacity routinely utilised) • Sales, Management and Product Trainings – Sales Process Training utilising standardised regional process – Sales Coaching & Management Training, standard regional approach – Phone conversation (outbound) and scripting – Focus product re-training (sales process / benefit oriented) • Branch Site – Model Branch in good location but competitive city area – 7,000 customers with balanced product portfolio
  20. 20. 20 Case Study – Sales Meetings Daily - 5-10 minute daily ‘warm-up’ covering a short recap of the last day’s results and focusing the team for new day’s objectives / priorities Weekly - Results recap and next week’s planning and objectives highlight - Address successes and identify improvement areas - Recognise best performer(s) - Ensure brief sharing of the team learnings - Identify support required / expected Monthly - Review monthly sales performance and activities per branch and individual - Celebrate successes and recognise the best performer(s) - Gather staff feedback, share and review learnings - Address and plan for improvement areas - Plan for the next month and highlight the objectives
  21. 21. 21 Case Study – Sales Planning With Both Leading and Profit Indicators ACTUAL OBJECTIVE ACTUAL OBJECTIVE ACTUAL OBJECTIVE ACTUAL OBJECTIVE ACTUAL OBJECTIVE CALLS CONTACTS MEETINGS CURENT ACCOUNT O/D DEPOSITS PERSONAL LOAN MORTGAGE CREDIT CARD OTHERS ACTIVE GROUP SALES BOARD SALES 12 24 29 30 31 DECEMBER 2003 15 17 18 9 16 WEEK 1 8 11 10 MONTH 19 22 23 WEEK 2 WEEK 3 WEEK 4 Example (Branch Level Tracking)
  22. 22. 2222 Case StudyCase Study –– Term Deposit ResultsTerm Deposit Results Term DepositsTerm Deposits Focus on deposits Test (Banking Example)
  23. 23. 2323 Case StudyCase Study –– Loan ResultsLoan Results Focus on loans Test (Banking Example)
  24. 24. 2424 Case StudyCase Study –– Credit Card ResultsCredit Card Results Focus on credit cards Test Control (Banking Example)
  25. 25. 2525 Case StudyCase Study –– Service Quality ResultsService Quality Results Customer SatisfactionCustomer Satisfaction •• Customer satisfaction is slightly higher than network average anCustomer satisfaction is slightly higher than network average and well above the city averaged well above the city average •• AverageAverage gradegrade grewgrew furtherfurther, to, to 4.44.4 onon expansionexpansion!! 4.1 4.24.2 3.4 Avg. Grade Test City (Banking Example)
  26. 26. 2626 RollRoll––Out: Cross Sell vs. ProspectingOut: Cross Sell vs. Prospecting Project implementation Sales leads utilised from pre-selected lists provided initial boost for subsequent branch ‘own’ sales performance growth First 5 month of the year: 908 credit cards, next 4 months: 6,050 credit cards (Banking Example)
  27. 27. 27 Boost efficiencies  Build it the right way: align, integrate  Plan your way to success  Use the best ideas but keep it simple Maximize channel innovationMaximize channel innovation  Own the revenue (RELATIONSHIP), not the cost (CHANNEL)Own the revenue (RELATIONSHIP), not the cost (CHANNEL)  Keep controlKeep control  Innovate, but beware of the “basics”Innovate, but beware of the “basics” Beat the Recession!Beat the Recession! 1) Boost efficiencies with “global best sales practices” 2) Implement / integrate channel innovation for “first mover’s2) Implement / integrate channel innovation for “first mover’s advantageadvantage
  28. 28. 28 Let’s own the revenue part, not the costs! COST Items $ Physical outlets $ Fixed salaries $ Channel development REVENUE Items  Acquisition ability  Sales opportunity  Relationships
  29. 29. 29 Example #1: Direct Sales Agents Direct Sales Agents (DSA) • Individual contracts vs. holding co. set up vs. 3rd party management • Precursor to intermediary engagements • Exclusive vs. shared sales Examples: – Avon USA – Knorr CH – Citibank HU – ABN AMRO RO Citibank Sales Dynamics DSA Staff # of products sold / mo 40 30 Of which, proactive sales 40 0-5 Proactive as % of total 100% max. 10% % time spent on proactive selling 80% 20% Max. sales if 100% time proactive 50 25
  30. 30. 30 Direct Sales Agents Control Items Contracts to cover – Acquisition / sales focus – Authorized document use – Exercising duties personally – No other FI relationship – Cannot sign in Bank’s name – Minimum sales objectives – Training attendance – Document verification – Dress, manner – Credit, audit rules – Service quality – Disengagement clause – Compensation structure • Start with fixed (first 3 months) • Shift to mostly variable (4-6 months) • Three-tiered structure - Basic – monthly draw - Fee – per product sold - Bonus – for higher sales
  31. 31. 31 Example #2: Agent Outlets Agents vs. Franchisees Agent Franchisee Uses brand, product, support SLA, scorecard in place Owns own business Pays Parent Gets paid by Parent Examples: Citibank Belgium Bendigo Australia ING Romania
  32. 32. 32 Agent Outlets Issues • Integration – Organizational – Operational – Sales process – Risk management • Ownership – Brand – Customer – Cost – Services • Risk – Reputation – Regulatory – Fraud – Service quality • Coverage – Cannibalization – Conflict with other intermediaries – Gaps in coverage overlap between partners • Alignment – Strategic (long term) – Profit (short term) – Philosophy (Management)
  33. 33. 33 Agent Outlets Parent owns: • Signage • Stationary • Cash (if applicable) • Related channels installed (e.g. ATM, vending machine, video terminal) • Access to Parent’s system and software • Maintenance contracts These are provided free of charge to Agents 15 to 20% of key outlets (“nodes”) also kept as “own outlets”
  34. 34. 34 Example #3: Intermediaries (Alliances, Brokers, Other 3rd Party Channels) Contracts Set out control framework • MUST include – Authorized activities and exclusions – Roles and responsibilities, for both sales and service – Disengagement rules (selling business, firing, transferring, contract renewal, etc) – Exclusivity, ownership, coverage, scope issues – Compensation
  35. 35. 35 Intermediaries Remuneration Types JV Profit share Revenue share Commission Basis • New sales • Portfolio • Knock out criteria • Hurdle rate Parameters • % of sales (N.B.: WHAT is “sales”?) • Flat fee per sales • Floor price • Sliding scales Support Needed • Start up • Training • Draw • Marketing • Professional (e.g. training, location selection, database analysis…)
  36. 36. 36 Intermediary Innovation: Cadbury International, expanding from Canada to USA Challenges • Chocolates are impulse purchase items, yet…  No brand recognition  Retail penetration near impossible  Sampling is expensive Approach • Use innovation, use…  Vending machines for “sampling with profit”  Brokers / master brokers for low cost distribution  Packaging for brand building (for end users)  Unique USP based on fresh research (for intermediaries)
  37. 37. 37 0 20 40 60 80 100 120 1st Mo 2nd Mo 3rd Mo 4th Mo 5th Mo LEADING BRAND BRAND X Leading Brand Average New Brand Average------------------------------------- -------------------------------------
  38. 38. 38 0 20 40 60 80 100 120 1st Mo 2nd Mo 3rd Mo 4th Mo 5th Mo LEADING BRAND BRAND X BRAND Y
  39. 39. 39 0 20 40 60 80 100 120 1st Mo 2nd Mo 3rd Mo 4th Mo 5th Mo LEADING BRAND BRAND X BRAND Y BRAND Z
  40. 40. 40 0 20 40 60 80 100 120 1st Mo 2nd Mo 3rd Mo 4th Mo 5th Mo LEADING BRAND BRAND X BRAND Y BRAND Z BRAND Q
  41. 41. 41 0 20 40 60 80 100 120 1st Mo 2nd Mo 3rd Mo 4th Mo 5th Mo LEADING BRAND NEW BRAND Leading Brand Average New Brand Average ------------------------------------- -------------------------------------
  42. 42. 42 “But what can be sold in vending machines?” • Candy • Drinks • Tickets • Toys • Gaming • Money • Milk • OTC • ETC?
  43. 43. 43 But let us not forget the basics - among all this innovation…
  44. 44. 44 Some basic reminders – for all of us… • Every channel, every offer, every customer must be profitable on its own, on a going basis • Acquire direct, service remote, build relationship in person – whenever you can • Be mindful of channel migration and segment shifts, always consider “streaming” • Pay attention to handover points – that’s where most customers and prospects are lost • Every new channel addition must be justified by solid business case
  45. 45. 4545 ““Let TheLet The JourneyJourney Begin!”Begin!” Thank You For YourThank You For Your Attention…Attention… Sandy VaciSandy Vaci sandyvaci@t-online.husandyvaci@t-online.hu Tel.: +36 70 43 43 284Tel.: +36 70 43 43 284

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