Presented by Richard Brooks at the ALC conference in Las Vegas NV. Explores the realtionship/importance of strategic sales management, marketing and key account management. Moves on to present models around the life-time value of clients to an organisation and how this changes as firms develop.

1. Investing in a sales team Richard Brooks 19 th May 2011.

2. Where were we… Crisis of LEADERSHIP Crisis of AUTONOMY Crisis of CONTROL Crisis of RED TAPE Crisis of ??? Growth via CREATIVITY Growth via DIRECTION Growth via DELEGATION Growth via COORDINATION Growth via COLLABORATION Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972 Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

3. Employing a sales team = PAIN Crisis of LEADERSHIP Crisis of AUTONOMY Crisis of CONTROL Crisis of RED TAPE Crisis of ??? Growth via CREATIVITY Growth via DIRECTION Growth via DELEGATION Growth via COORDINATION Growth via COLLABORATION Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972 Key source of turbulence coming out of stage 1 is investing in a sales team. Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

4. The Process Keep your sales people well fed with quality leads Social media Marketing Newsletter Website SEO & SEM Cold Calls Account & Key Account Management Marketing Sales closed DRIVE THE PIPELINE Blog Leads Qualified leads Opportunities Proposals Win Lose Negotiation Trade shows

5. Pipeline Model Cuts through bullshit/shows Net Present Value Leads Qualified Leads Opportunities Don’t stop the sausage machine Value Value Proposals Value Lost Value Won Value Starbucks Microsoft Eli Lilly FedEx Ernst & Young $45,000 $65,000 $25,000 $150,000 $100,000 $565,000 Yahoo HR material Autodesk packaging Ikea catalogue Intel R&D Nike Sports Website Dell user guides $50,000 $15,000 $25,000 $5,000 $10,000 $50,000 $155,000 I’ve got loads of leads boss. NASA Tech manuals Blackberry strings Amex website Costco food labels $5,000 $7,000 $25,000 $5,000 $42,000 5% 10% 25% Present Value Pipeline valued at: $54,500 (and not $762,000!!!) $28,250 $15,500 $10,500 Opportunities must have a name , value and date . Sales Guy Report What I did this week. 1. 2. 3. What I didn’t do this week. 1. 2. 3. What I’ll do next week. 1. 2. 3.

6. Web traffic Pages indexed Search Engine position Cost per lead Cost per $ returned Campaign cost & ROI Leads per channel Business closed (by AM) Business lost (by AM) New business /repeat Prospecting calls/AM Pipeline net present value But… Building relationships is much more profitable than selling stuff. Why? --->>> Marketing Sales Key Metrics “If it matters, measure it and put it on the wall” – Randy Morgan Build the metrics into your CRM

7. Cost of Customer Service The cost to serve your customers decreases over time Profit time Cost (to serve a customer) Year 1 Year 2 Year 3 Year 4 Year 1 Year 2 Year 3 Year 4 time The Acquisition Cost of a Customer (Marketing) Sometimes used as a model for pricing strategies. And will map to each stage in a firm’s development. The Experience Curve (Economics)

8. Relationship Management Responding to modern market forces Solution selling Value not price Key Account Mgmt Business to business relationship Market forces in business to business relationships Supplier responses Globalisation Market maturity Customer power

9. Key Account Management Accounts which are of strategic importance Top 15 Next 30 Next 55 Clients Customer Lifetime Value $$$ $$ $ See your customers in terms of lifetime value (and not a series of one off transactions). Some clients may be key because they open doors for you. - From a model developed by M McDonald – Cranfield University

11. Salesforce Strategy Where should your sales people spend their time? Value of Business Attitude of Customer (Market Share) High Med Low Friendly (major share of spend) Neutral (equal share of spend) Unfriendly (minor share of spend) Tea and Biscuits customer Why bother? Key question. Where should the sales people spend their time? Sales people say ‘tea and biscuits’… but that’s wrong.

12. Salesforce Strategy Where should your sales people spend their time? Value of Business Attitude of Customer (Market Share) High Med Low Friendly (major share of spend) Neutral (equal share of spend) Unfriendly (minor share of spend) Tea and Biscuits customer Why bother? Its similar to the boston box – but closer to what we actually do in sales management. i.e. focus your sales resources on the areas with the greatest potential. Manage costs to Serve Maintain and Grow Relationship Potential Change Strategy

13. Client Relationship Basic/Exploratory relationship Directors Managers Translators Studio Accounts Sales guy Your Company Your Customer Directors Managers Writers Studio Accounts Buying guy Traditional relationship. Means that the sales guy is incredibly valuable (they like this) and will get head hunted by the bigger companies to work for them (they like this as well). Lose the sales guy lose the client.

14. Client Relationship Interdependent relationship Directors Managers Translators Studio Accounts Key Account Manager Your Company Your Customer Directors Managers Writers Studio Accounts Buying guy A much stronger relationship. If the sales guy goes… you’re more likely to keep the client. This relationship can then develop… R&D teams can merge, teams on customer site, joint board meetings, joint strategy development and social events. This guy picks the team and manages the relationship. IF the customer wants one point of contact then rotate this person every 6 months. “ We have 50,000 moments of truth every day” Jan Carlson President, Scandinavian Airlines

16. Growth of Sales Teams Planning for future developments Crisis of LEADERSHIP Crisis of AUTONOMY Crisis of CONTROL Crisis of RED TAPE Crisis of ??? Growth via CREATIVITY Growth via DIRECTION Growth via DELEGATION Growth via COORDINATION Growth via COLLABORATION Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 $500k Investment in sales team. $1mn Explore KAM $2.5mn Install KAM $5mn Embed KAM Larry Greiner, “Evolution and revolution as organizations grow”, Harvard Business Review August 1972 Adapted by Andre Pellet for ALC Miami 2010. Mixture of Sales people and Key Account Managers

17. To Conclude If you are setting up a sales team they need to be fed leads and managed/measured continuously. Procrastination is the enemy of sales. CRM software lets you manage more people but isn’t the answer to everything, CRM is based on 3 principles (marketing, strategy and IT) and all 3 need to be addressed. You will increase profits by managing relationships and not simply selling stuff. Retain clients AND develop relationships (up the ladder) – locked in clients will become hostages/terrorists. Look for monopolies and try to kill them (because the service will be terrible). Purposely build strong multi-departmental relationships with your customers to decrease the likelihood of loosing an account on loosing an employee. Measure/value clients on their lifetime value and not a series of one off payments. Look to add strategic clients which will/can progress up the ladder of loyalty – some people are switchers and will always be. Its common sense to you (as entrepreneurs) but may not be to your staff…

18. Contact Details For a copy of the slides email [email_address] @RichardMBrooks use the conference hashtag #ALC11

19. Key Customer Portfolio How to pick your key accounts. Strength with Customer ( relative to best competitor ) High Low Key Account Attractiveness Low High X axis Strength with Customer Size Growth Share Position Profit Brand People Y axis Key Account Attractiveness Size Market Growth Pricing Strategic partnership Strategic Opportunity Strategic Investment Pro-active Maintenance Manage for Cash Selective Investment