Project story: More sales success through customer-focused sales management

Sales success and customer orientation are the basis of every entrepreneurial activity. This becomes particularly clear in economically difficult times. Sales management and controlling help to ensure that the company has profitable orders and capacity utilization.

The initial situation

Almost every company operating on the market is familiar with the challenge: How do I set up my sales department in such a way that it acquires business that is as profitable for my company as possible in the long term? How intensively must sales be managed and controlled?

At our customer, a medium-sized manufacturing company with several production and sales locations and customers in the DACH region, the sales department acted largely autonomously. Incoming orders and sales had been declining for several years. As a result, the company fell into an earnings crisis.

The challenge of sales management
The challenge of sales management

HANSE Consulting was commissioned to develop a restructuring concept and to support its implementation. One focus was on stabilizing and increasing incoming orders. The improvement of the customer-focused sales management was a central measure for this.

Systematic analysis of the sales process revealed considerable potential for improvement

  • Sales and revenue planning at customer level was only rudimentary. Always necessary new customer business with potential target customers was not specified in more detail, for example in the form of a concrete solution-oriented and bindingly scheduled target customer approach.
  • There was little evaluation of sales activities or measurement against targets. There was a lack of customer-related sales and contribution margin targets. Important responsibilities were unclear, e.g. which employee was responsible for target or existing customer business and to what extent.
  • Existing data from the ERP system on sales revenues, contribution margins and customer developments were rarely analyzed and used as a basis for decision-making. The controlling department also only half-heartedly put its finger on the “existing wounds”. Sales and contribution margin analyses were sent to the sales representatives on a monthly basis. The sales controlling process with a PDCA cycle, in which deviations and developments can be responded to with measures, was not adhered to.
  • The company thus lacked a sales controlling system. For example, when sales were weakening, sales staff were able to apply significantly higher discounts to the offers. This led to significant margin losses and, in some cases, after surcharges for offers at “dumping prices”, also to excessive demands on production capacities. As a result, some orders regularly had to be placed with external companies at short notice and at high cost in order to be able to meet the contractual obligations entered.

The solution through optimization of sales processes, structures and through sales management

With the help of a team from HANSE Consulting, which continued to take care of the company’s turnaround in a holistic manner, the sales department also had to be reorganized and restructured.

  • The responsibilities within the sales department were reorganized. From now on, the internal sales force took care of the (known) existing customer business with the clear mandate to further expand it. The field sales force was responsible for new customer business. In the first step, sales targets and later contribution margin targets were agreed with the employees.
  • Customer-related sales and earnings planning, which was carried out for the first time, served as a basis. The employees responsible for the customers were to prepare a plan for the coming period for each of their customers. In the future they were directly responsible for its realization.
  • In addition target customers had to be defined in a binding manner for the field sales force. They also had to plan when the first sales could realistically be made with these customers. HANSE Consulting regularly checked the facts and probabilities of occurrence of “fantasy castles” that often occur in sales and corrected the expectations to a realistic level if necessary.

Digitalization and process optimization

  • In cooperation with HANSE Consulting, processes were revised and, where possible, digitized and thus accelerated. All incoming customer inquiries, for example, which in the past sometimes lay around in the mail baskets of individual employees for days on end, were transferred directly to a newly developed inquiry receipt tool. An automatically generated specification was that a quotation had to be prepared within 2 working days and then electronically forwarded to the sales manager for approval, depending on the price.
  • In parallel, HANSE Consulting developed a sales planning tool with the help of a software company. From then on, the current status of each customer could be viewed here at any time. The development of each customer consisted of the ACTUAL sales (already invoiced or as an order in the order books) and the planned sales. As soon as it became apparent that planned sales could not be realized, these were to be removed from the current planning. At the same time, the responsible employee was instructed to find an adequate replacement (if necessary with another customer). It proved to be useful that every employee in the sales department can look at the development of all customers. Despite previous reservations, this did not lead to “envy debates” in the case of very positive developments, but rather spurred everyone on to get the best possible out of the customers for which they were responsible.

Structuring and introduction of sales controlling meetings

  • Every 5 – 6 weeks, a sales controlling meeting was held under HC management with the employees of the field sales force as well as the team leaders of the office sales force and the managing director, at which significant customer developments as well as all sales-relevant (also strategic) topics were discussed. The divisions had specifically prepared the content of the individual developments. The great advantage was that the figures were always up to date thanks to the rolling planning system that had been introduced. Depending on the development, tasks were then distributed to those responsible for individual customers. At the next meeting, the results of the to-do’s were discussed and, if necessary, refined. Ideally, positive developments in the order backlog were already apparent by then.
Sales increase
Increasing sales through sales management

The result of the change process

After the implementation of personnel changes and the clear assignment of responsibilities for existing and target customers, it was very quickly possible to create a spirit of optimism in the sales department. The change process, which was intensively accompanied by HANSE Consulting, took about 6 months in the company, but increasingly led to much more acceptance among the staff and ultimately to more success.

Earnings improved significantly, mainly as a result of increased transparency, control and commitment. In new customer business, around 10 million additional sales (= around 9% of total sales) were generated after one year.

The effectiveness of customer-focused sales management has led to a demonstrable increase in sales success.

Conclusion

Success in sales can be significantly increased by clearly defining responsibilities, goals and tasks in customer care and development and by ensuring transparency in sales development at all times. Regular discussion of developments with the protagonists in sales and the managing director has proven to be another key success factor.

Contact us if you think that a systematic analysis for your company could reveal potential for improvement that could bring success.

Please feel free to make a non-binding appointment with one of our experts.

Dr. Armin BratzOlaf Schuchardt