Best sales practices, bucharest 2012 march 1, mba masterclass

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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

http://www.msmro.org/

mailto:[email protected]

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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

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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 innovation

Own the revenue (RELATIONSHIP), not the cost (CHANNEL)

Keep control

Innovate, but beware of the “basics”


1) Boost efficiencies with “global best sales practices”1) Boost efficiencies with “global best sales practices”


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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)

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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)

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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)

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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

47

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”


1) Boost efficiencies with “global best sales practices”


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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

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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…

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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

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““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

Best sales practices, bucharest 2012 march 1, mba masterclass

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