Sandy Vaci gave a presentation on global best sales practices for beating recessions. The presentation provided case studies and examples of optimizing sales channels and processes. It emphasized boosting efficiencies through alignment and integration, and maximizing innovation through channel ownership and control. Specific techniques discussed included optimizing direct sales agents, agent outlets, and intermediary relationships through clear contracts and compensation structures. The presentation concluded with reminders about ensuring all channels are individually profitable and paying attention to handover points between channels.
Organizational Structure Running A Successful Business
Global Best Sales Practices to Beat the Recession
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
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
““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
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
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
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
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. 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
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
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
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
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
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. 2222
Case StudyCase Study –– Term Deposit ResultsTerm Deposit Results
Term DepositsTerm Deposits
Focus on deposits
Test
(Banking Example)
24. 2424
Case StudyCase Study –– Credit Card ResultsCredit Card Results
Focus on credit cards
Test
Control
(Banking Example)
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. 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
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
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
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
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
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
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
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
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
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)
42. 42
“But what can be sold in vending machines?”
• Candy
• Drinks
• Tickets
• Toys
• Gaming
• Money
• Milk
• OTC
• ETC?
43. 43
But let us not
forget the
basics
- among all this
innovation…
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