You are currently browsing the archives for the Case Studies category.




Archive for the ‘Case Studies’ Category

5 Sales Challenges Faced By B2B Startups – A case study

Wednesday, December 3, 2014 @ 02:12 AM
Author: John Smibert

Startup

 

Startups who sell to large enterprises often find “selling” a challenge.

I recently observed a classic example.

A startup went from near failure to solid turnaround in less than 12 months by identifying and addressing five key sales issues. This new startup – led by Susan, a very impressive young entrepreneur – had introduced a new energy product to market. The product had the capability of disrupting a number of industries. And yet, despite the compelling product, they were struggling to make sales. Why?

Susan and her team had outstanding design and product development skills. However only one of the team members had any B2B sales experience. They had closed a number of small opportunities. However they needed to win some large orders to gain market share and credibility. Unfortunately they had recently submitted eight significant proposals including three large tender responses with no decisions in their favour.

It was devastating.   Susan and her team had been convinced that their product should sell more easily. It was groundbreaking technology. They had thought that if they got in front of the right decision-makers in their target customers and show off their product – and what it could do – they would generate orders.

They had done one thing well. A good marketing organisation had helped them write three Unique Selling Propositions targeting potential clients in three industries. And they went knocking on doors with these.

And it seemed to work. By leveraging the networks of their chairman and investors they had got in front of key people in a number of organisations. They conducted many demonstrations of their product – feature, function, benefit! They were asked to submit proposals or tender responses. But then the opportunities seemed to stall or they got a simple ‘no thanks’.

Pretty soon they found their pipeline of opportunities had dried up and they had to start finding prospects all over again

Susan’s investors needed to understand why they were not closing these opportunities. They arranged to have it investigated. As a result 5 key needs were identified and changes were implemented accordingly.

 

 The Five Sales Challenges

I am sharing these five sales issues – and what was done to address them – because I expect some of these might apply to other startups struggling to sell B2B.

 

1. The need for a sales process

Susan’s team had not thought of ‘Sales’ as a discipline like Financial Management, Marketing and manufacturing. In each of those disciplines they had implemented strict processes and methodologies – but not for Sales.

They had no way of assessing where they were in a sales opportunity and how effectively it was progressing. As a result they were pouring resources into high risk opportunities or ones which were not likely to progress for months or years.

They were performing sales activities in the wrong sequence. They had regularly demonstrated and proposed their product before they understood the customer’s business drivers and timelines. They had regularly wasted time selling to individuals who had no power to make a decision.

As a result they had missed the mark or invested selling resources into organisations that were not ready to buy. In the meantime opportunities that may have had a better chance of progressing had being starved of resources.

 

The solution?

With help from a specialist they defined a six stage sales process that made sense for their type of sale. They also adopted methodologies to be applied during the process. These helped them systemise activities like:

  • How to get better insight into individual prospective customers,
  • How to more effectively engage with the correct people
  • How to assess opportunities in order to decide in which ones they should invest their meagre resources.
  • How to create a strategy for winning a competitive opportunity

The most significant lesson Susan learnt was to be selective – qualify hard – don’t waste time on opportunities that were unlikely to be winnable or were not ready.

 

2. The need to sell customer outcomes – not the product

Many startups think it’s all about promoting their ground-breaking product – but it seldom is?

Customers invest in outcomes not products. In most of Susan’s sales opportunities the customers were excited about the product but could not visualise the value for their business – or the risks were unjustifiably high. In their mind it didn’t warrant upsetting the status quo.

Susan and her team had not done enough customer specific research. They had not understood the customer’s unique business drivers. They had not discovered the specific value – that a change they could drive to the customer’s business – would produce.

 

The solution?

Susan’s team implemented a ‘discovery’ step early in their sales process. This ensured they fully understood the customer needs, challenges and opportunities. And they learnt to religiously complete this step before they discussed, proposed or demonstrated their product. They realigned their selling focus on customer outcomes – the customer specific value proposition.

As a result the dialog made a lot more sense to the customer – they were able to fully comprehend the value to their business.

Susan’s team were also able to extend this philosophy into their ‘social selling’ activities. They engaged earlier and more effectively with the customer by dialoging and sharing content based on outcomes and not product. They avoided promoting product or company via social media and forums and just delivered ideas and insight that was of value to their target customers. Their brand credibility grew considerably and customer engagement became easier.

 

3. The need for a sales system

No customer data management system had been adopted. Information about prospective customers was captured piecemeal in emails and spreadsheets or was maintained in the heads of the team. Collaboration across the team, relative to an opportunity, was haphazard at best. Tasks were falling through the cracks. A lack of process also meant that dialog across the team was not productive. There was no common sales language or understanding of the status of an opportunity.

 

The solution?

It was decided that a simple cloud based CRM should be adopted – one that focussed on assisting the team to sell more effectively and efficiently. The new sales process was incorporated into this CRM system. As opportunities were qualified and moved from one stage to the next this was reflected in the system. Everybody could see the status and what was to be done next. All customer information was available to all.

They also implemented a simple collaboration system – integrated with the CRM system – which helped the team work together more effectively and innovatively on sales opportunities.

 

4. The need to systematise sales management

The only sales management system they had previously implemented was a rudimentary forecasting system. And because of the lack of a sales process and qualification methods the forecast was dreadfully inaccurate. Also their financial system tracked revenue but not sales so they had no way to easily forecast revenue (or cash) from existing orders – let alone forecasted orders.

Informal sales reviews were being conducted weekly – at a team meeting. The purpose was to try to understand the sum of all the opportunities they were working on and where the roadblocks and the priorities were. Because their was no sales process or formal sales database this became very tactical in nature.

There was also no way to plan and allocate selling resources, Because these resources were utilised across both development and implementation – as in most startups – resources were being pulled from pillar to post – often with no notice. The person with the loudest voice tended to get the resources whatever the priority.

 

The solution?

Susan implemented some simple sales management principles.

The sales pipeline would be reviewed by the team on a weekly basis. Opportunities would be prioritised based on the stage they were at, and on what was needed to progress them. Roadblocks were assessed and workarounds implemented where it made sense. Most of the information required to support this meeting, was now available via the new CRM system. The number of opportunities being worked on at one time was deliberately limited – even if it meant withdrawing from some. This focussed the resources and increased the win chance.

 

5. The Need to improve Sales Skills

It had become very evident that the team did not have enough sales and sales management skills to sell and manage effectively – even after implementing the previous 4 changes.

Susan and her charman decided to implement a development program for their key people. They also decided to add to their sales capability by employing an experienced salesperson and moved the current resource to develop channels..

Susan was concerned that a one off sales training program would not be the solution. She recognised that most of what would be learnt at a workshop would be forgotten when they got back to work.

 

The solution?

In conjunction with an adviser, Susan implemented a six month change program. The team was trained and then coached through regular reinforcement sessions. What they needed to learn would need to become habitual.

The development program was built around the new sales process they had adopted. Particular emphasis was put on the customer approach, the discovery, developing a customer value proposition, demonstrating value, authenticating their claims and negotiating. All this was about selling customer value – not selling the product features

This program is still being rolled out however the returns are already evident. The team are working on less deals and winning a higher percentage. Their resources are less stretched and better planned.

There have been significant changes in customer facing behaviour resulting in much more effective customer engagement by focussing on their business outcomes.

Susan also employed a coach to assist her in her sales management activities. This included setting up sales measurement systems, incentive programs, lost sale analysis, opportunity strategy development, progress reviews and salesperson recruitment.

 

Conclusion:

Susan is delighted with the impact of the changes:

“Just by implementing a sales process – and focussing first on discovering the customer needs, challenges and opportunities – we quickly became laser focussed on how to achieve customer outcomes versus selling product. We are teaming better and applying resources more productively. We are much more strategic in our pursuits.

“This has resulted in closing one very large deal that had previously stalled. We are also now positioned well to win 4 others very soon – 3 of whom previously said no.

“I am much more confident in our future than I was 12 months ago”.

The issues Susan faced may be different to the ones you are facing. But the process she went through to identify them and then address them may well be of value to you.

I hope this gives you some food for thought – and impetus for action!

Please share your experiences below or contact John Smibert

 

 

SERVICE ALIGNMENT CASE STUDY

Sunday, November 3, 2013 @ 07:11 AM
Author: John Smibert

This is a case study of how one company aligned with their customer to improve the effectiveness of their services while reducing cost of service and achieving improved customer satisfaction and value.

Company: The service provider and customers relative to this case study are not named to protect the interest of the organisations involved.  Should the reader wish to explore this study further contact Custell at info@custell.com.

 

Type of Business: IT Infrastructure Managed Services.

.

Background:

The company is a provider of IT services for customers in a range of industries including financial institutions and government bodies.

The contracts they had with their customers called for an end to end infrastructure service that would ensure high availability of applications.  The users of the applications within the customer organisation needed to perform their function without interruption so that they could provide a good service for their end customers. The service provider was under contract with each of their customers to meet agreed service levels.

The company is structured into a number of key competency groups each of which provided specific services such as; ‘Help Desk’, ‘Network’, ‘Desktop’, ‘Server’, and ‘Application’.  Each competency was well trained and efficient.  Service issues were received, addressed and passed on quickly and effectively by each group. Each group consistently met or exceeded their KPI’s.  Over the preceding four years they had implemented the IT Infrastructure Library (ITIL) service management processes in an attempt to deploy best practice service support and delivery.

The Challenge:

Customer Service Level Measures (SLM’s) were not being met which was resulting in customer dissatisfaction and penalties.   The company had recently lost one customer and was at risk of losing another partly due to this problem. The customers were scoring them below industry average on semi-annual scorecards.

The issues:

A team was put in place to assess the situation and identify the issues.  The following was what they concluded:

  1. Each competency group played an efficient role in addressing incident or solving problems. However incidents were being handed off from one group to another and back again often without an end to end fix for the customer.  This was despite an end to end owner being allocated to each incident.
  2. Many common incidents were not being identified as a problem because an end to end assessment across competencies was difficult.  This meant that root causes were not being analysed and fixed resulting in more unnecessary incidents.
  3. The role of each competency group was not linked clearly enough to the end customer requirement.  This was exacerbated by each group’s KPI’s that did not relate closely to the customer service measures.  This silo behaviour was one of the key contributors to the problem.
  4. There was not a clear view of how the role of each group fitted together with the others to ensure a single focus on delivering to the customer.
  5. The implementation of ITIL (incident, problem, change and release management) had marginally improved the situation however it was not solved because it too was impeded by the silo behaviour.

A secondary issue identified was a similar silo effect in many of their customers.  Their customers typically were structured into multiple business groups, each of which received service from the service provider.  Individuals in each separate group had a different perception and expectations relative to the service being provided.  This caused confusion within the service provided.

The Solution:

The agreed objective was to maintain the effectiveness and efficiency of each competency group while at the same time ensuring a focus on the customer.

With the assistance of Custell a service alignment program was designed.  This entailed the following:

  1. CUSTOMER FOCUS TEAM (CFT): The establishment of virtual ‘customer focus teams’, one for each key customer.  Members included a key person from each competency who had a significant involvement with the particular customer.  A team leader and assistant were chosen – typically the Relationship Manager and the Service Delivery Manager for that customer.  To balance and spread the load it was decided that no individual should sit on more than two CFT’s.
  2. TEAM LEADER TRAINING: A training program was developed for the CFT team leaders to train them in how to form and lead a virtual ‘high performance’ self managed team.  This included how to set and manage goals, manage change, manage conflict, plan and manage meetings and ways to facilitate creative team thinking.
  3. CFT LEADERSHIP TEAM: A CFT leadership team was established comprising the heads of each competency group and a select number of the more senior CFT team leaders.  This leadership team was sponsored by a senior executive.  The responsibility of this team was the review and governance of the program and to support the CFT teams by assisting them to break down the barriers.
  4. CFT TEAM FORMING: An implementation workshop was designed and run for each CFT. This included some team based training. The primary purpose was to form the team, agree the team plan and begin the implementation. Topics included ‘high performance teams’, managing meetings, creative thinking, identifying and addressing ‘Barriers to Success’, conflict management and team communications.
  5. SUCCESS OUTCOMES: A number of measures were identified to monitor the success of each CFT.  These team based measures (KPI’s) were common across all CFT’s to ensure the leadership team could monitor outcomes of the program.
  6. REALIGNMENT OF KPI’s: It was recognised that the majority of existing performance measurement was focussed too much on individual and competency group outcomes.  The balance was shifted by focus; 1) with less on the competency groups and their internal functions and more on the customer outcomes, and 2) less on individual performance and more on team outcomes (particularly for the new CFT team members).

A third party consultant provided team leader coaching and sat in on the first three CFT team meetings for each CFT to assist with the team forming process.  The consultant also coached the CFT leadership team to assist them to manage the successful implementation of the program.

Outcomes:

Within 12 months of the implementation of the Service Alignment program:

  • There was a strong improvement in the percentage of SLM’s achieved across the customer base and penalties had significantly reduced.
  • Customer perception of satisfaction and value as measure by the Custell Customer Scorecard program increased significantly.
  • Costs were reduced because more incidents were addressed first time plus more root causes were identified and fixed.
  • The ITIL implementation was converted into a success.

******************

* Custell provides enterprise relationship enhancement programs – www.custell.com.

Best Practices at Leveraging Relationship Value

Thursday, May 3, 2012 @ 04:05 AM
Author: John Smibert

Best Practices at Leveraging Relationship Value

By John Smibert   (www.custell.com)

I am often asked about ‘best practices’ relative to leveraging relationship value. At a recent executive meeting I witnessed the outcome of the application of relationship ‘best practices’.

The CIO was presenting the three year progress scorecard of one of their ITC outsourcing relationships.

The value leveraged by both parties was impressive — substantially reduced costs; improved service levels; highly satisfied users and staff and a strong endorsement from the business units who are their customers.

To achieve these results they had jointly implemented a number of management programmes with their service provider.  These comprised some best practice processes, frameworks and training to address:

(i)  Partnering,

(ii)  Business alignment,

(iii) Innovation and value,

(iv) Relationship benchmarking, and

(v)   Governance.

The two organisations had teamed effectively and achieved outstanding   results over a three year period.

Customer Perception Case Study

Wednesday, September 22, 2010 @ 12:09 AM
Author: John Smibert

RELATIONHIP VALUE MANAGEMENT IN THE SERVICES INDUSTRYFujitsu Logo

 

Company:                        Fujitsu Australia Limited

 

Type of Business:                   IT Managed Services.

Timeframe:                              2001 to present

Issue:      “One on one” management and improvement of the perceived relationship value by “Blue Chip” customers.

Although retention of key customers was good in year 2000 and 2001 Fujitsu wanted to ensure it stayed that way.  There was a risk that a significant proportion of customers may go to tender at the conclusion of the contract term therefore raising costs, putting pressure on margins and increasing risk of loss of accounts.  In addition a key Fujitsu objective was to grow revenue from the existing customer base.

Customer Satisfaction Surveys were not the answer.  Over recent years Fujitsu had conducted customer surveys with key accounts at the executive and operative management levels.  These were designed at the enterprise level and had created good value for product development, services management, and marketing. However the results were limited for the “One on One” account relationship.  They did not assist the account manager (or the customer) to consistently monitor and improve the relationship. 

Balanced Scorecard. In addition the company had decided to implement a Balanced Scorecard methodology and needed more meaningful customer perception measures for select “Blue Chip” customers to complete the “dashboard”.

Analysis:   In early 2001 the previous conducted customer surveys were reviewed to determine why they had been less effective than desired.  The following key issues were identified:

  1. The executive surveys were done exclusively by external parties which, aside from being expensive, they insulated the account teams from the full extent of the customer response including emotion and body language.
  2. The survey methodology was too large and cumbersome and not specific to each customer relationship resulting in lack of buy in from both clients and account management.
  3. Being annual surveys they were not conducted regularly enough resulting in key issues and trends being identified too late to be addressed in a timely manner.
  4. There were varying measurement methodologies and questionnaires. This meant it was difficult to benchmark and measure progress one on one with a single customer relationship.
  5. There were no customer satisfaction KPI’s set for the account and delivery teams therefore it was difficult to hold people accountable for customer satisfaction in an objective manner.
  6. It was difficult to capture and prioritise customer specific recommendations to improve the relationship.
  7. The follow through was sometimes lacking therefore the customer often felt they were not being listened too.

 

Solution:    A Customer Scorecard program comprising new process and methodology was implemented to address these issues. It comprised the following items:

  1. A small value based benchmarking scorecard comprising 15 measures across three categories ensuring that top of mind customer recommendations for improving the score were captured.
  2. A value scoring methodology that is simple and easily understood ensuring consistency over time for benchmarking purposes.
  3. All benchmarking scorecards were to be conducted face to face and with the relationship manager (or delivery manager) in attendance as an observer.  This proved effective in gaining strong support from the customer and was illuminating for the relationship manager.
  4. A simple system that captured the scorecard data and provided vivid reports that highlighted exceptions and trends.
  5. An action planning workshop guide that assisted the account team to develop action plans in response to the customer recommendations.
  6. A customer communications plan that demonstrated that the company was listening to customers with action (without creating unnecessary work for the account team).
  7. A six monthly scorecard cycle.  This was a short enough period to ensure any negative change in the perceived value of the relationship was captured from individual customers in time to take corrective action.  At the same time scorecards were conducted long enough apart to ensure it was not too onerous on the customer or the account teams.

 

Outcomes:         

  1. Incremental revenue from existing key customers lifted by more than 15% each of 2 years
  2. All participating customers were retained and indicators for customer retention were improved.
  3. Over four scorecard cycles had been completed at the date of writing and there had been a steady improvement in customer satisfaction scores.
  4. Two significant enterprise wide issues were identified and addressed resulting in a positive response by customers.
  5. Customer feedback indicated that they are delighted with the program and see it as a significant one to one channel of communications with their provider and a means to improving the value they get from them.
  6. Support from account teams moved from skeptical to supportive. The have accepted responsibility and accountability for customer satisfaction and loyalty.

 Testimonial

“The Customer Scorecard model we implemented in 2002 has provided Fujitsu Services with a simple but effective tool to continuously measure and improve customer perceptions.  At first I was a little sceptical that a short 15 category benchmark would capture all recommendations necessary to address satisfaction however this was quickly dissipated.  A good test came when we conducted a Scorecard in parallel with a traditional 150 question survey.  The messages from each were almost identical.  The scorecard model continues to be a winner for us” 

                    Peter McFarlane, Executive General Manager, Services, Fujitsu Australia.

                                                                            ***************

 Custell develop and implement customer intimacy programs for business to business service providers.  (Refer www.custell.com ). Contact custell.


Warning: require_once(./views/css.php) [function.require-once]: failed to open stream: No such file or directory in /home1/custell/public_html/custell/wp-content/plugins/wp-to-top/classes/class-wp-to-top.php on line 41

Fatal error: require_once() [function.require]: Failed opening required './views/css.php' (include_path='.:/opt/php52/lib/php') in /home1/custell/public_html/custell/wp-content/plugins/wp-to-top/classes/class-wp-to-top.php on line 41