When a client was faced with stagnating sales metrics after maintaining steady growth for 20 years. Cogent Analytics was able to help them increase their sales through better sales management. This case study describes the client’s situation, and the solutions that Cogent Analytics helped to implement in the company, and the impact that the solutions had on the business.
The company highlighted in this case study is a multi-generational family-run business. The company distributes janitorial supplies to its customers, with a holistic approach to provide and meet all their customers’ janitorial supply needs. Operating from their warehouse facility, the company utilizes its delivery staff and company-owned delivery trucks to ensure quality from sales to direct delivery.
The company has enjoyed continued growth over the past 20 years and has retained a large and loyal customer base in which to sustain that growth. However, in more recent years, the company’s sales have been stagnant, with sales management not truly providing the proper vision or displaying enthusiasm to move sales growth. The overall complacent sales force performance and the lack of sales management leadership were a concern for the owner, who knew that changes needed to be implemented; however, I was not sure how to go about these changes. The company needed an overhaul in terms of an accountability framework within the business to improve sales. The sales team was not seeking sales opportunities, and sales management leadership was not providing the guidance, direction, drive, or commitment to move the sales team ahead. The sales team was operating as more of sales order takers instead then proactively working with current customers to seek additional sales opportunities or trying new accounts to obtain new business.
The client was determined and committed to taking the business to the next level and knew that additional sales opportunities existed, however, was unclear of all the proper steps needed to reach that next level.
As a result, it was discovered that there was a need to establish necessary accountability and organization infrastructure: by assessing and realigning roles and responsibilities, creating and implementing standards and expectations, and developing performance-based job descriptions. The job descriptions were tied to real objective, performance-based employee evaluations. Also, proper communication channels were not in place that provided the sales team with the positive and proactive leadership, vision, and direction necessary to motive and drive the sales team to take ownership of their territories and grow sales within those established territories.
Early observations and detailed skill assessments confirmed that a change in the current sales management was necessary. Sales meetings did not have set agendas, and sales management was not providing realistic sales goals and projections. Also, sales management leadership was not being offered in terms of coaching, mentoring, monitoring, and giving feedback to the sales team. The meetings being held stated, “Here were your goals; you did not hit them- do better.” Also, the lack of monitoring and measuring sales performance did not provide ownership with the ability to track the daily/weekly sales activities and performances truly.
A new sales manager was selected from the sales team, upon assessment of each sales representative’s skill sets. Discussions were held with the current sales team on the development of Key Performance Indicators (KPI’s) that would allow both the sales team and management to monitor and measure daily, weekly and monthly performance levels. The sales team was directly involved in the development of these KPI’s to confirm their ownership and commitment to the established KPI’s. Also, realistic sales goals were established for each sales representative and corresponding sales territory. These goals were developed based on prior history and by established sales growth budgets that were implemented as part of a thorough analysis with the company owners and the growth potential for each area.
The sales meetings took on a different approach. The meeting agendas were established to provide staff with an overall vision, direction, purpose, and a “how do we get there” leadership style. The tone of meetings changed from “here is what you did not do” to “here are the opportunities we have in our reach, and these are the specific items we are going to do to reach these goals.” As the sales team operates on commission, they began to see and believe how their actions could genuinely benefit them personally and financially moving forward. These fundamental changes and focus set a new tone and direction for the sales team and provided them with “new life” and prepared them for the additional future changes necessary to deliver sales growth for the company as a whole and other commission opportunities for the sales team individually.
The next step was the establishment of a detailed 1, 3, and 5-year business plan to achieve the desired sales growth wanted by ownership. Explicit monthly sales goals were created to move sales from the current annual 4% level to the desired 10% growth. This plan included specific action plans, who was responsible for each action item and time-definite deadlines required to complete each step. The first action item identified was the need to ensure that all sales territories were being efficiently run to foster the desired sales growth level.
When the process of evaluating each sales territory begins, the desire initially was to ensure that each rep was running their route most efficiently to maximize face-to-face opportunities with accounts. It was soon discovered that a complete redesign of each territory was needed as reps were crossing over each other to see accounts. As a result, a comprehensive analysis was conducted to show prior sales history and commission dollars for the entire service areas. Utilizing this information, sales boundaries were established that focused each sales rep into a specific geographic region. Sales staff were brought in individually to review their new territory and plan for the handoff of accounts from one sales rep to the other.
The redesign of each territory provided greater daily efficiencies for each sales rep, reducing drive time between accounts and thus allowing for a more significant selling time at each account. In addition, the KPI’s established provide ownership, sales management and individual sales reps with the ability to track daily activities, based on number of selling days in each month (actual regular sales achieved vs daily sales needed to reach monthly goal, exact overall sales month to date vs goal and CRM activities recorded in efforts to reach these goals). These KPIs are being captured and sent to all parties each day and provides timely and accurate information on where each individual stands vs. goal and what they need to achieve daily to reach the established monthly goals.
Besides, a complete sales manual was created to establish sales expectations and standards and ensure all reps, existing and new, are being provided with all product training materials and proper selling techniques to reach maximum success in the field. Standard Operating Procedures (SOP’s) were established for sales activities, office administration functions as well as warehouse activities. In order to gain greater control over inventory, warehouse shelf bin locations were determined, and labeled cycle counting began. KPI’s continue to be captured each day, sales meetings, with focus and direction, continue each week and staff have a new sense of direction and drive each day in the field, and warehouse controls provide higher efficiency.
After the end of the first month of fully implementing all changes, sales reached 7.5% growth off a 3% goal