PROBLEM
This organization was
featured in last month's newsletter (to review this newsletter goto
www.supplyvelocity.com and click the "Archive Newsletter" link on the right
side of the homepage). After
understanding who their best customers were, via statistical ranking, we finalized their On-Target Sales Strategy by understanding which were their best market segments and the impact of project size on sales success.
TOOLS
On-Target™ Sales
Strategy
DETAILS - Customer Ranking
1) They brainstormed
all of the different ways the market could be segmented. Instead of focusing on their customers'
segments (they were all general contractors) they focused on what was being
built. This included buildings for
banks, retail, office space, industrial, schools, hospitals and restaurants, as
well as residential. www.supplyvelocity.com/Jan_2009_Data_Analysis_Table.xls
2) They conducted
comparison-analysis, comparing each segment according to each of the performance
measures.
3) The Restaurant
segment stood out as having a higher close rate and gross profitability than
the others. It was the fourth largest in
sales, but based on profitability and sales productivity (close rate), it was
the best. Since it wasn't the largest
sales segment, it had not been given much attention. Now, it is getting the attention it
deserves. This is the marketing
focus! General Contractors that work in
this segment get greater attention.
Tradeshows for this segment are attended. They are calling directly on companies in
this segment to get preferred status on the bidding.
DETAILS - Deal/Project Size
1) This company bid
jobs that ranged from a thousand to over a million dollars. When we looked at close rate, and sales by
project size, it was apparent they weren't competitive for large projects. (See the Bid-Size worksheet in the linked
Data-Table Spreadsheet) Prior to this
analysis, if a big opportunity came along with a new potential customer, they
would bid. The largest bid they created
was for $1.2 million. It took
a couple of people over a week to complete this bid. During this time they were not able to bid
for any other existing customers. They
didn't win this bid, or any of the other larger bids they proposed for
new/potential customers.
2) Using close rate
and sales by project size they developed bidding rules for new and existing
customers. They would not bid large jobs
for a new customer. They asked to start on something small or medium sized as they had a
better chance of winning this work.
3) Even for existing
customers they would not bid on any job more than 2x what they had already done for
them. This way they would build on our
knowledge of working with each customer and wouldn't waste our bidding/estimating resources
on something they had little chance of winning.
RESULTS & SUMMARY
1) They used this analysis to create a real marketing plan. Tactics were centered on calling on general contracting customers that serve their best markets.
2) They created rules for bidding based on the size of the
job and the reality that they need to build on our success with customers.
