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Background
A leading global manufacturer of process additives had established a presence in Asia Pacific based on export sales sold through a distributor network. With sales plateaued at $10 million, the company recognized that to fully realize their potential in the region they would need to produce locally and to justify that expense they needed to increase sales volume and market share. A new sales manager was assigned to the region to spur that growth.
The Assessment
The sales manager’s first task was to conduct an assessment of the go-to-market strategy and tactics carried out by the distributor network. His assessment revealed a number of opportunities for improvement. The marketplace was driven by price per unit of chemical input. As a result, distributors were continually requesting price reductions from the manufacturer. The primary interface between distributor sales reps and customers was the purchasing department. Distributor performance varied greatly across the region and there were no effective metrics to evaluate distributor performance.
The Prescription
Working intensively with the distributor organizations across the region, the sales manager refocused the selling proposition on the cost per unit of customer output. Sales reps were encouraged to establish multi-function contacts beyond the customer’s purchasing department. This allowed the sales reps to initiate production audits, process optimization programs and technical seminars for customer staff. A distributor sales plan was instituted in each territory, including targeted customers based on customer willingness to collaborate and potential for growth. The sales plan included distributor performance metrics based on customer-focused objectives and provided for two-way feed back on how the entire value chain was performing.
Results
Over a three year period sales volume for the region increased 22%, prices were increased 6% and revenues grew 28%. Contributing to this organic growth were sales gained from direct competitors, through substitution for alternative products, and from customer growth in their market space.
Besides these top and bottom line gains, the Team ChemistrySM approach yielded additional benefits to the manufacturer, their distributor network and customers. The collaboration forged by distributor reps with all customer decision-makers produced improved competitive intelligence. Customers’ key performance indicators were captured allowing the manufacturer to build effective advantage based on what was important to the customers. A deepened understanding of process flows helped drive out costs for the customer.
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