Best sales practices, bucharest 2012 march 1, mba masterclass
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1
Global Best Sales Practices“How to Beat the Recession and Come Out Ahead!”
MBA Master Class
MSM, RomaniaBucharest, March 1, 2012www.msmro.orgfacebook.com/msmro@msmromania
SANDY VACI
Adjunct Senior Lecturer
[email protected]+36 70 43 43 284
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.
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““A good A good crisis is a crisis is a terrible terrible things to things to waste!”waste!”
Paul Romer, Senior Fellow Stanford University
““We always We always make our make our worst worst decisions decisions during the during the best of times”best of times” Jamie Dimon, CEO
JP Morgan
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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 advantage advantage
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 advantage advantage
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77
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1111
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Cross Functional Integration – Best Practice Example, Banking
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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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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
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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
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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
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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)
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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
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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
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Case Study – Sales Planning With Both Leadingand Profit Indicators
ACTUALOBJ ECTIVE
ACTUALOBJ ECTIVE
ACTUALOBJ ECTIVE
ACTUALOBJ ECTIVEACTUALOBJ ECTIVE
CALLS CONTACTSMEETINGS CURENT ACCOUNT
O/D DEPOSITSPERSONAL
LOANMORTGAGE
CREDIT CARD
OTHERS
ACTIVE GROUP SALES BOARD
SALES
12
24
293031
DECEMBER 2003
15
1718
9
16
WEEK 1
8
1110
MONTH
19
2223
WEEK 2
WEEK 3
WEEK 4
Example (Branch Level Tracking)
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Case Study Case Study –– Term Deposit ResultsTerm Deposit Results
Term DepositsTerm Deposits
Selected branch vs. benchmark (term deposits sales)
0
100
200
300
400
500
600
700
J ul.03 Aug.03 Sep.03 Okt.03 Nov.03 Dez.03 J än.04 Feb.04 Mär.04 Apr.04 Mai.04 J un.04
AGENTIAMOSILOR
Averagebenchmark
Focus on deposits
Test
(Banking Example)
2323
Case Study Case Study –– Loan ResultsLoan Results
Selected branch vs. benchmark (loan sales)
0
20
40
60
80
100
Jul.03 Aug.03 Sep.03 Okt.03 Nov.03 Dez.03 Jän.04 Feb.04 Mär.04 Apr.04 Mai.04 Jun.04
MOSILOR
Averagebenchmark
Focus on loans
Test
(Banking Example)
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Case Study Case Study –– Credit Card ResultsCredit Card Results
Selected branch vs. Benchmark (credit cards sales)
0
20
40
60
80
100
120
140
Okt.03 Nov.03 Dez.03 Jän.04 Feb.04 Mär.04 Apr.04 Mai.04 Jun.04
AGENTIAMOSILOR
10 agentii test,medie
Focus on credit cardsTest
Control
(Banking Example)
2525
Case Study Case 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 grade grade grewgrew furtherfurther, to , to 4.44.4 on on expansionexpansion!!
4.1
4.24.2
3.4
Avg. Grade
Customer Satisfaction
0 10 20 30 40 50 60 70 80 90 100
Mosilor
Bucharest
Whole network
Very satisfied Satisfied Just satisfied Not really satisfied Not at all
Test
City
(Banking Example)
2626
RollRoll–– Out: Cross Sell vs. ProspectingOut: Cross Sell vs. Prospecting
Credit card applications (second city)
2 2 1 5 4 4 7 814 16 19 22
1118
26 26 31 28
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3
22
47
25 20
9
7
5 43
2
3
0
10
20
30
40
50
60
70
1-6
Mar
7-13
Mar
14-2
0 M
ar
21-2
7 M
ar
28 M
a -3
Apr
4-10
Apr
11-1
7 Ap
r
18-2
4 Ap
r
25 A
pr-1
May
2-8
May
9-15
May
16-2
2 M
ay
23-2
9 M
ay
30 M
ay-5
Jun
6-12
Jun
13-1
9 Ju
n
20-2
6 Ju
n
27 J
un -
3Ju
l
4-10
Jul
Restul Loan Top Up
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)
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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 advantage advantage
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
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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
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
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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
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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)
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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”
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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
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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…)
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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)
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0
20
40
60
80
100
120
1stMo
2ndMo
3rdMo
4thMo
5thMo
LEADINGBRAND
BRAND X
Leading Brand Average
New Brand Average-------------------------------------
-------------------------------------
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0
20
40
60
80
100
120
1stMo
2ndMo
3rdMo
4thMo
5thMo
LEADINGBRAND
BRAND X
BRAND Y
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0
20
40
60
80
100
120
1stMo
2ndMo
3rdMo
4thMo
5thMo
LEADINGBRAND
BRAND X
BRAND Y
BRAND Z
40
0
20
40
60
80
100
120
1stMo
2ndMo
3rdMo
4thMo
5thMo
LEADINGBRAND
BRAND X
BRAND Y
BRAND Z
BRAND Q
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0
20
40
60
80
100
120
1stMo
2ndMo
3rdMo
4thMo
5thMo
LEADINGBRAND
NEW BRAND
Leading Brand Average
New Brand Average
-------------------------------------
-------------------------------------
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“But what can be sold in vending machines?”
• Candy
• Drinks
• Tickets
• Toys
• Gaming
• Money
• Milk
• OTC
• ETC?
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But let us not forget the basics
- among all this innovation…
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
4545
““Let TheLet The Journey Journey Begin!”Begin!”
Thank You For Your Thank You For Your Attention…Attention…
Sandy VaciSandy Vaci
[email protected] Tel.: +36 70 43 43 284Tel.: +36 70 43 43 284