The following case study is excerpted from Driving Growth and Shareholder Value: The Distribution Value Map” by Neil Gholson and Mark Schloegel of Deloitte Consulting LLP and published by the National Association of Wholesaler-Distributors.
A U.S. distributor serving customers in construction, industrial, and original equipment manufacturer (OEM) markets did a few important things very well:
- Retained business through authentic brand recognition.
- Nurtured strong relationships with customers.
- Provided excellent service at competitive prices.
However, the company had trouble attracting new customers. In fact, new business opportunities had declined’ by as much as 20 percent in some branches. When asked to define the cause, the sales force didn’t hesitate to respond: inadequate support during the pursuit of new business. Further investigation bore this out: Sales was trying to drum up business through cold calling, but the contact information in the company’s database was old and incomplete.
A cross-functional team of people from sales, marketing, and IT was charged with developing both a business-wide process and an information system that would extract leads from multiple sources, distribute the information to sales teams, and track customer interaction and results.
Challenge #1: The team developed a way to gather and deliver lead information to local branches in every region that the distributor served every week by hiring researchers to find out about new construction, renovations, and large-scale projectst hat might require the company’s materials and services. To this information, the local branches added their own feet-on-the-street detail about opportunities. Once this information was gathered, the system filtered it and created reports, which provided the sales teams with only leads that matched the company’s core strengths.
Challenge #2: Because consistency was critical, the IT staff developed a user-friendly contact/relationship management tool that dispersed the lead information electronically to the local branches. The tool included the company name, size of project, location, contact name and phone number, products and services needed, expected date of project, and specific actions that needed to be taken. Armed with good information, the salespeople chased the leads with confidence that the company’s services were a good fit.
Challenge #3: In addition to proactively contacting the new leads and pursuing opportunities, the sales staff had the equally important job of updating the data in the contact/relationship management system, so that the company could track how well the tool was performing and, perhaps more importantly, so that the data in the system would stay current.
Instead of using guesstimates based on inconsistent data, the salespeople were then able to base their plans on valid information. With clear direction, they had a greater potential to generate new wins. They tracked leads, wins, losses, and status, and they had a better mechanism for tracking accountability.
In addition, the market research provided them with a more realistic picture of segment-by-segment needs, as well as their performance relative to competitors. After almost a two-year effort, and thanks to the salespeople’s field work and the information provided in the contact/relationship management tool, the distributor now is realizing regular growth in sales from new accounts.