SAP Executive Insight. Best Practices of the Best-Run Sales Organizations Sales Opportunity Blueprinting

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1 SAP Executive Insight Best Practices of the Best-Run Sales Organizations Sales Opportunity Blueprinting

2 Why are we talking about blueprints? After all, blueprints are used in the construction of buildings, highways, or airplanes providing a plan of action for pulling together complex materials and steps to successfully accomplish a project. No one would compare sales activities to construction. But we can say that deciding where to direct our time, energy, and assets can be a difficult decision, a decision that may mean the success or failure of the company. That s why some of the most proficient and effective sales organizations today use a blueprint to evaluate their sales opportunities and create the best chance for success. Leadership teams in today s strongest sales groups have discovered best practices to achieve exponential results. This SAP Executive Insight looks at leading-edge companies and examines how they excel in areas where most sales organizations struggle. To move your sales team to the next level, you need answers to the following: How do you determine which customers provide the greatest opportunity for a successful sale? Can you develop and present a comprehensive view of your value position to a prospect? How do you drive sales activity to ensure optimal coverage? What is the role of IT and talent in driving a best-run sales organization? 2 SAP Executive Insight Best Practices of the Best-Run Sales Organizations

3 EXECUTIVE AGENDA At a Glance Determining the Right Customers Sales managers and sellers are continually challenged to increase their sales volumes and margins in a growing and dynamic market. Sellers are routinely stretched to broader territories and product lines. Determining which customers to pursue and qualifying your customers are essential steps for effective sales activities. But how do you know which customers to focus your effort on? A recent benchmarking survey conducted by Americas SAP Users Group (ASUG) and SAP shows that the greatest gap between importance and actual performance is in the area of opportunity and activity (see Figure 1). 1 Make customer data visible to sales teams via a centralized customer database that supports internal communication, sales team strategy, and execution Quantify the value your customer gains from the relationship with your company in comparison to the cost of your product Analyze the information from sales teams to dramatically improve the company s understanding of both the customer and market Blueprinting the Sales Cycle Best-run sales teams are effective at determining who their best prospects and customers are by working effectively with their customer contacts to build a broad information base on customers. Qualifying the business to understand the opportunity both by products and financial viability. Qualifying the opportunity to understand the value for both companies. How does it fit into each company s competitive landscape? Developing the sales strategy based on a comprehensive understanding of the customer, the opportunity, and the effect of the opportunity on the selling company. Furthermore, what resources are needed to achieve success? Continuing to Excel Through Talent and Processes Developing sales skills to better understand and evaluate the customer is a difficult task for all companies. To determine which customers to focus on, you should: Analyze the territory to quantitatively determine where your best opportunities exist Blueprint the opportunity to gain a greater understanding of the customer and potential opportunity Opportunity Activity Sales planning and forecasting Territory Essential elements in the sales cycle blueprint include: Qualifying the contact to understand how to best approach the opportunity. What is the contact s buyer type? How are buyers evaluated in their performance, and how can the seller match the sales strategy to the buyer? Account and contact Incentive and commission Importance Contract Figure 1: Gap Analysis Between Importance and Actual Performance in Sales Effectiveness 2 Actual performance Quotation and order Many of today s best-run sales groups focus their sales training on: Internal processes such as forecasting, pricing, and supply chain Sales tools like customer relationship (CRM) and price and margin (PMM) Customer and opportunity evaluation to develop a demonstrated need, ready market, and the ability to provide a solid return on investment for both parties Business and financial acumen to form a fundamental understanding of your customer s industry, ranging from financial literacy to global business trends Each of these skills drives the seller s proficiency both internally and externally within the sales team and with the customer to qualify opportunities. This enables both sellers and business groups to make better business decisions. 1. Source: CRM: Sales Effectiveness Benchmarking Survey, ASUG/SAP Benchmarking and Best Practices program, August 4, Ibid. SAP Executive Insight Best Practices of the Best-Run Sales Organizations 3

4 Determining the Right Customers Driving Seller Activity to the Highest-Priority Opportunities Knowing your customer is essential for effective sales activities. But how do you know which customers to focus your effort on? Hilti Corporation, a company providing leading-edge fastening technology solutions to the global construction industry, utilizes robust opportunity analysis to direct their sellers activities. Hilti meticulously maintains a database supported by the SAP Customer Relationship Management (SAP CRM) application. This database is regularly segmented and scoured to prioritize the greatest opportunities and risks, and it provides visibility to the sellers activity level at each account. Where do these opportunities come from and how are they delivered to the seller? Hilti builds the opportunity database from several sources, including existing job history, Internet services and research, and opportunities entered by sellers into the database. Utilizing this data, Hilti performs extensive territory analysis for buying trends by trade segment, geography, and customer size; an additional gap analysis is done on existing customers to ensure that any cross-sell or up-sell opportunities are captured. Driving Seller Activity to Ensure Optimal Coverage Once you have effectively identified where sellers should be spending their time, the question is how to best measure and manage their efforts? How do you know how often a seller interacts with prioritized customers? Hilti provides a very effective solution in their ability to maintain activity information in the CRM database. Seller activity at each customer is documented within the CRM database by sellers, providing visibility not only to sales but also to customer service agents working with the customer on the phone. Customer information and activity shared via a CRM tool strengthens a virtual team and creates a greater sense of customer satisfaction, which is more supportive of long-term customer success. Extracting the Value of Customer Information Sellers have long complained that their job is to be in front of the customer and not in front of a computer entering data. However, if the seller is in front of the wrong customer, that isn t the optimal use of time either. The capturing of complete customer data has driven Hilti to dramatic sales improvements since first implemented in Prior to using the CRM database, Hilti had very little complete customer information; for example, only 3% of contacts had addresses and only 16% had phone numbers. Today, Hilti has well over a 90% completion rate for customer data. Having comprehensive data allows companies to better segment their customers and communicate with more focused campaigns, and it has helped Hilti better understand its market. Our account managers can t get to all opportunities, but they need to get to the best opportunities. Cary Evert, President and CEO, Western Hemisphere, Hilti Corporation Prior to Hilti s CRM initiative, the company estimated its market opportunity at US$4 billion. Today, armed with more complete data, the company estimates it at $16 billion. Having a greater understanding of market potential has driven Hilti to continue developing more robust analytics to better manage sales efforts. Territory analysis reports have been extremely effective in driving seller activity to the highest-priority opportunities and active accounts. Each metric provides visibility at the customer and product level for revenue changes, product information, and year-to-date sales activity, which, in turn, drives greater overall value for the company. Computer Sciences Corporation Industry: Professional services Summary To enable growth, Computer Sciences Corporation (CSC), a leading global technology and business services provider, wanted to integrate its sales processes and create a single view of customer data. The company implemented a sales force automation system based on the SAP Customer Relationship Management application. CSC gained a single, scalable software solution that rapidly integrates customer and pipeline data and provides a holistic view of potential business to maximize sales opportunities. Results with SAP Software Time to generate monthly global pipeline report: 94% (down from 36 hours to 2 hours) Time to integrate acquisition-related pipeline and customer data: 67% (down from 12 weeks to 4 weeks) Consistency of pipeline measures across business units: 100% 4 SAP Executive Insight Best Practices of the Best-Run Sales Organizations

5 Blueprinting the Sales Cycle Getting to the Best Prospects Qualifying the Contact Understanding your customer begins at understanding the people involved in the relationship and whether that relationship is a transactional or strategic one. Who are the purchasing decision makers? What is their buyer type? Who are the influencers? What are their needs and requirements for doing business? Qualifying the Business The customer s business can be delineated into two key areas. First are the customer s operations, including products, packaging, inventory requirements, payment terms, and competitors. How does the customer s needs match up with the seller s ability to supply? The second qualifier is at the corporate level. Sellers need to be able to identify the company s financial strengths and weaknesses. They need to effectively forecast if the customer will be a good business partner under the terms of agreement set by your company. Qualifying the Opportunity Only after acquiring a good command of the company s personnel and business attributes can a seller begin to formulate the real opportunity. To truly qualify the opportunity, the seller needs to find answers to questions about the customer and seller companies. Questions about the customer s company include: What does the customer want to buy? What makes the seller s company distinctive to the customer? Who is the competition, and what are their strengths and weaknesses at the account? How does the customer gain value from the seller s product? Can you quantify the value your customer gains from the relationship with your company in comparison with the cost of your product? How much value the seller s company can provide the customer can be easily overlooked. Understanding the value of the customer s final product in relation to your product costs should lend insight into the optimized price for your product. This should be a fundamental element in developing the sales strategy. Questions about the seller s company include: Can the seller s company compete and win? Does the seller s company have the ability to supply the product? Is there an opportunity to sell additional products or services that provide your customer with additional value or competitive position? Formulating the Sales Strategy The final step of blueprinting a customer involves the formulation of a sales strategy. This strategy outlines how the company approaches the customer and what business it will pursue. Questions to clarify the approach include: How often will the seller visit the customer? What resources and support are needed? What type of relationship-building exercises are needed and at what levels? What type of negotiation tactic should be initiated? What are appropriate pricing parameters based on the customer s value gained, the selling company s margin requirements, and competitor expectations? What is the customer s process for closing a deal? Are you approaching the right customers? The recent SAP/ASUG benchmarking survey on sales effectiveness shows that the best-performing companies closed sales in 60% of their customer interactions, while companies whose performance was average closed sales in only 33% of interactions. 3 Medline Industries Inc. Industry: Healthcare Summary Medline is the largest privately owned manufacturer and distributor of healthcare products in the United States. Medline is committed to enhancing the quality of patient care while containing costs. Results with SAP Software Integrated view of customer activity across online and direct sales channels Increased use of customer self-service through Medline.com Enhanced profit margin by up to 3% Improved customer retention by up to 10% Reduced revenue lost due to pricing errors by up to 10% Enhanced productivity of sales representatives by up to 20% 3. Ibid. SAP Executive Insight Best Practices of the Best-Run Sales Organizations 5

6 Achieving Success in the Sales Cycle Continuing to Excel Through Talent and Processes We want our people to be professional sellers versus professional visitors. Our sellers spend a lot of time up front learning the customer and their needs; we never want to walk into a customer and throw a price at them. Steve Jones, Vice President, Eastern Region, Brenntag Canada Inc. Implementing the Necessary Skills Developing skills to better understand and evaluate the customer is a difficult task for all companies. Sales training provides long-term value for both the customer and the company across numerous disciplines. Many of today s best-run sales groups focus their sales training on: Customer and opportunity evaluation Development of value statements demonstrating benefits as a supplier Improvements to the seller s competitive landscape by providing additional products and services Business and financial acumen Internal processes such as forecasting, pricing, and supply chain Use of sales tools like CRM or PMM Each of these skills helps the seller s proficiency both internally and externally in working with the sales team and working with the customer to qualify opportunities. The better sellers understand their customers, the more they are able to save time and reduce costs for both customer and supplier. Some companies have developed salesexcellence teams made up of sellers, sales managers, and business personnel from across all regions and products who are focused on improving sellers skills, tools, and processes. The team creates an effective single point of contact for sellers and provides a valuable voice to sales as to where and how improvements should be made. Executive Involvement and Support Executive support is essential for innovative sales processes to be successful. Effective use of tools to maintain customer information requires disciplined efforts from sellers and may at times appear to cause a reduction in job efficiency. But this ignores the value gained from focusing on the right customers. Standardization of Sales Information and Processes In the increasingly flat world, more and more customers are truly global customers with multiple needs in multiple geographies. Today s CRM tools help sales teams effectively manage their customers by institutionalizing customer data via standardized processes and creating collaborative space for sales teams to work together. This collaboration leads to better communication and decision making for the organization regarding sales and product strategies. Often the most immediate benefit of centrally maintained customer data is in dramatically reduced seller ramp-up time when sales territories turn over. Without a CRM database, customer data is lost when sellers transition out of a territory and take their contacts and customer notes with them. But when customer Eclipse Aviation Industry: Aerospace and defense Summary Eclipse Aviation Corporation manufacturer of the world s first very light jet wanted to better support its sales force in their pursuit of high-value orders. Building on an original implementation of SAP software to integrate core business processes and systems, Eclipse deployed the latest release of the SAP Customer Relationship Management application. The upgrade, implemented in just 8 weeks, offers a consistent, streamlined user interface for efficiently managing sales leads. Results with SAP Software User adoption within sales organization: +85% Increase in sales productivity: +40% Increase in customer care productivity: +40% information is maintained centrally, it s available to the new seller, dramatically reducing the ramp-up time in the new territory. For example, Brenntag Canada has reduced seller ramp-up time from 12 months to 6 months due to the effective transition of data from seller to seller. Another benefit of standardized data is the ability to model market expectations based on price fluctuations. Marketing managers can utilize customer data to quickly understand the effects of a price change and view where the competition has the most entrenched position. The ability to analyze market initiatives and fluctuations based on existing customer information provides greater credibility to the estimates and immediately aids in the sales cycle. 6 SAP Executive Insight Best Practices of the Best-Run Sales Organizations

7 The Road Ahead The Essential Steps You Need to Take So how do you make a smart decision as to where and when to focus your sales efforts? Today s sales leaders would tell you to gather as much customer information as possible and build your strategy from a knowledgeable position. Each step in managing your sales opportunities is essential for the ultimate success of the sale. Sellers that skip over process steps leave themselves vulnerable to failure in the later stages of the deal. 1. Determine who the right customers are. Today s sellers are stretched thin for time. Therefore, choosing the right customers to focus your resources upon is essential for your company s success. Best-run sales groups use both quantified and qualified analysis to determine the right customers. Utilizing in-depth territory analysis to understand the potential and comparative value of opportunities and then coupling this with market knowledge give sales managers a robust analysis of where to direct their resources. 2. Blueprint the sales cycle. Once the right customers are identified, they need to be qualified. Sellers need to gain a comprehensive understanding of how the customer s and the seller s company can best do business together. They must fully assess the value of the sales opportunity to both the customer s and the seller s company and then use this information to pull together a sales strategy with their business and team. 3. Continue to drive sales excellence through talent and process development. The ability to effectively determine who your right customers are and then how to blueprint the sales cycle is not easily mastered. Today s best-run sales organizations effectively train their sellers on their internal processes and sales tools, build business and financial acumen, and foster an understanding of the comprehensive value of business relationships. And they develop an understanding of the attributes that drive an effective sales strategy and why they are successful. Scaling seller s best practices so they are transferable to the entire organization, instead of being limited to just the prime performers, is essential to the health of the company. Opportunities need to be discovered, developed, and cultivated to reach their full potential. It s important to close deals, but they have to be the right deals. Deals that are a good fit for both customer and supplier can ensure the long-term success of both parties. Understanding your customer and maintaining a robust customer database in a CRM tool not only provides your sellers and sales managers with actionable information, but it can provide significant value to the entire organization. About the Author Thomas Young is director of the CRM Customer Value Network, where his primary role is to facilitate CRM best-practice learning and sharing among SAP customers. He has 15 years experience in the chemical and plastics industry and has successfully held roles in sales, supply chain, global sales operations, and manufacturing. Prior to his role with SAP he led multiple implementations, enhancements, and projects to improve sales and sales operations at Lyondell Chemical Company. Thomas holds an MBA from Tulane University. Additional Information For SAP CRM case studies, success stories, and business transformation studies for customers such as Computer Sciences Corporation, Medline Industries, and many others, go to com/solutions/business-suite/crm /customersuccess/index.epx. To view SAP CRM demos, event information, and customer blogs, go to /bpx-crm (may require registration). SAP Executive Insight Best Practices of the Best-Run Sales Organizations 7

8 (09/01) Printed in USA by SAP AG. All rights reserved. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ( SAP Group ) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.

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