PMA Sales and Marketing Summit Improving Sales Performance with the Right Data and Process. Presented By: Robert Kimmel September 27, 2017

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1 PMA Sales and Marketing Summit Improving Sales Performance with the Right Data and Process Presented By: Robert Kimmel September 27,

2 Trusted Advisor to the Manufacturing Industry Established to help small- to medium-sized businesses transform operations and develop a roadmap to maintain financial and operational success. Business Assessments Operations Improvement Strategic Development Custom Analysis Benchmarking 1

3 Uneven Performance Leads To Issues Many manufacturers tend to be strong on operational dimensions but weaker in sales 2

4 Utilizing a Strategic Sales Process 3

5 Utilizing a Strategic Sales Process When we first implement we start with Data Analysis Tools: Hit Rate Analysis Sales and Profitability Analysis 4

6 Hit Rate Analysis Reveals Inefficiency Customer Total Quote ($) Total PO ($) Hit Rate Customer 1 $348M $1.1M 0.33% Customer 2 $179M $1.9M 1.04% Customer 3 $163M $.3.3M 2.05% Customer 4 $96M $0.2M 0.17% Customer 5 $95M $1.9M 1.94% 14-month quote analysis: > $2B total quotes > 4,500 quotes 0.91% overall hit rate 64% of quoted customers never purchased Top 10 customers >75% of total business Customer Total Sales ($) Total Quote ($) Hit Rate Top Cust. 1 1,168K 3,821K 31% Top Cust. 2 1,118K 2,660K 42% Top Cust K 2,212K 41% Customer A 215K 9,553K 2% Customer B 193K 894K 22% Customer C 176K 2,264K 8% Customer D 74K 407K 18% Customer E 60K 485K 12% Customer F $56K 308K 18% Customer G $33K 405K 8% 2015 quote analysis: Total hit rate 12% and very high on key customers Few customers actually average 12% Heavily concentrated on 3 customers Large OEMs yet few RFQs 5

7 What Type of Sales Analyses Make Sense? Job Number Sale Cost Profit Industry Tonnage Job 12 $ 132,000 $ 115,000 $ 17,000 Automotive Large Job 8 $ 115,000 $ 120,000 $ (5,000) Automotive Large Job 47 $ 20,741 $ 17,215 $ 3,526 Medical Medium Job 84 $ 20,685 $ 18,000 $ 2,685 Medical Medium Job 36 $ 20,610 $ 16,076 $ 4,534 Aerospace Medium Job 11 $ 95,000 $ 90,000 $ 5,000 Automotive Large Job 46 $ 49,789 $ 30,371 $ 19,418 Medical Large Job 57 $ 48,766 $ 24,383 $ 24,383 Medical Large Job 90 $ 48,227 $ 35,206 $ 13,021 Medical Large Job 83 $ 47,369 $ 55,000 $ (7,631) Medical Large Job 5 $ 21,355 $ 19,647 $ 1,708 Automotive Medium Job 24 $ 21,168 $ 19,475 $ 1,693 Automotive Medium Job 19 $ 10,872 $ 9,132 $ 1,740 Automotive Small Job 42 $ 10,849 $ 8,679 $ 2,170 Medical Small Job 88 $ 10,813 $ 9,515 $ 1,298 Medical Small Job 95 $ 20,031 $ 15,624 $ 4,407 Marine Medium Job 80 $ 19,485 $ 10,000 $ 9,485 Medical Medium Job 73 $ 10,291 $ 5,351 $ 4,940 Medical Small Job 56 $ 9,722 $ 6,514 $ 3,208 Medical Small Job 45 $ 47,229 $ 45,340 $ 1,889 Medical Large Job 100 $ 46,061 $ 34,546 $ 11,515 Marine Large Customer Sales Margin Growth Rate 6

8 Sales and Profitability Analysis Customer analysis at left revealed three main clusters: Big revenue with moderate margin Smaller but higher profitability The Dogs 7

9 Utilizing a Strategic Sales Process Use data analysis to inform Company Strategy Sales strategy and process is predicated on company strategy 8

10 What is a Strategic Niche? A strategic niche is market segment where you have a disproportionate competitive advantage Ideally you are one of only a few or best of all one companies that can fill that niche Your goal is to make it unattractive for competitors to make the necessary investments to compete in your niche 9

11 Types of Niches Industry Commodity The best shops are succeeding in creating attractive and defensible market niches Operations Technology Relationship 10

12 Utilizing a Strategic Sales Process Based on company strategy, identify Target Markets Tools: Ideal customer Customer filter 11

13 Create the Ideal Customer Consider factors such as: Company size Industry Product type Geography PITA Leverage data such as: Sales Margin Growth rate Hit rate Conduct a brainstorm Ask: What does good business look like? What type of business do we want more of? What customers do we like to work with? 12

14 Create a Customer Filter Tool Criteria Cust 1 Cust 1 Score Cust 2 Cust 2 Score Cust 3 Cust 3 Score Industry Appliance 0 Automotive -1 Aerospace 1 customer criteria Annual Revenue $16,000,000 1 $10,000,000-1 $35,000,000 1 Payment Terms Ok 0 Ok 0 Good 1 Financial Stability Ok 0 Good Low scores 1should be Ok avoided or 0 Location Within 6 hours 0 Within 2 dropped, hours or 1 plan created Over 6 hours to improve -1 PITA Mid 0 Mid 0 High -1 Potential Mid 0 Short High scores -1pursued with Long vigor 1 Value per Year $500,000 3 $1,200,000 5 $750,000 3 Complexity High -1 Mid 0 Mid 0 Sophistication Mid 0 Mid 0 Mid 0 the garden in good times, be more Tonnage High 0 Med 1 Low -1 flexible in tough times Material Commodity -1 Specialy 1 Engineered 0 Value-added assembly Low -1 High 1 Med 0 Score Create a scoring tool based on your ideal Flex based on market conditions weed

15 Utilizing a Strategic Sales Process Once target customers identified, adjust Pricing and Quoting Tools: Quote volume tracking Margin adjustment 14

16 Use Hit Rate, Quote Volume to Track to Sales Target Include impact of churn ($M) Sales Versus Target At 10% Historical hit rate, $5+$5M = $10M Target, $100M Quote Volume Required $30M Target $5M $25M Last year $5M $20M With churn 15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 15

17 Make Sure you Are Tracking Throughout the Year ($M) Sales Versus Target Back in May, need $40M Quote Volume, 10% Hit Rate to be on pace $2M $2M At 10% Historical hit rate, $5+$5M = $10M Target, $100M Quote Volume Required $30M Target $5M $25M Last year $5M $20M With churn 15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 16

18 Adjust Prices Based On Customer Attractiveness A pricing matrix can be used to flex based on market conditions Adjust prices based on your utilization and the customer s filter score High Filter Score Low 1.1X 0.8X Mid-High Low 1.2X 1X High Standard Capacity Utilization 100% 50% 17

19 Utilizing a Strategic Sales Process Create Feedback loops built on sales and quoting performance Tools: Sales meeting Metrics scorecard Weed the garden 18

20 Establish a Sales Meeting Cadence Weekly - Tactical Monthly Pulse Check Quarterly - Strategic Duration 1 hour 2 hours 1 day Purpose Execute on sales tactics Address issues Attendees Outside Sales Inside Sales Quoting/Estimating Agenda Metrics review New customers update Issues Actions Progress against priorities Outside Sales Inside Sales Quoting/Estimating Marketing Metrics review New and updated account plans Continuous improvement Other initiatives Issues Actions Prioritize efforts for the coming quarter Outside Sales Inside Sales Quoting/Estimating Marketing Senior Management Metrics review with analysis Review customer filter Review account plans Updates on strategy Continuous improvement Other initiatives Issues Actions 19

21 Create a Metrics Scorecard Week Ending Source FY 2016 Goals Monthly Goals Weekly Goals 4-Aug 11-Aug 18-Aug 25-Aug Sales Finance $ 14,000,000 $ 1,166,667 $ 269,231 Quotes/hit rate Quotes Awarded ($) CRM system $ 14,000,000 $ 1,166,667 $ 269,231 Quotes Awarded (#) CRM system Quotes Generated ($) CRM system $ 140,000,000 $ 11,666,667 $ 2,692, Quotes Geneated (#) CRM system Hit Rate % on Quotes ($) CRM system 10.0% 10.0% 10.0% New RFQ's received ($) CRM system $ 200,000,000 $ 58,333 Pipeline Customer visits (#) CRM system New customers identified CRM system Sales Operational metrics Avg Quote Turnaround time (days) Quote log

22 Weed the Garden No Need to Plow it Under Customer Jobs Sales % of sales Avg. Margin Cust 1 24 $ 6,036, % 22.6% Cust 2 18 $ 6,025, % 13.4% Cust 3 12 $ 2,365, % 26.6% Cust 4 10 $ 2,805, % 22.6% Cust 5 8 $ 1,098, % 29.5% Cust 6 8 $ 1,334, % 8.0% Cust 7 7 $ 991, % 33.7% Cust 8 6 $ 290, % 34.6% Cust 9 4 $ 241, % 14.0% Cust 10 3 $ 103, % 1.6% Start at lowest-revenue customers and determine if worth the resources required to maintain Need a strategy for each trouble account Some should be exited gracefully as soon as possible Some should be nurtured to health 21

23 Utilizing a Strategic Sales Process Focus your efforts through Sales Planning Tools: Top Customers Account plans 22

24 Top Clients Strategy Key Account 2015 Revenue 2016 Target Category Sales lead Sales support Goals Customer 1 $3,796,680 $3,820,000 At Risk SW GH Salvage relationship and maintain sales Customer 2 $1,094,000 $2,038,000 Growth SW JR Double products being sold Customer 3 $911,460 $1,812,000 Growth LH SW Improve scorecard and double business Customer 4 $1,232,000 $1,280,000 Maintenance JR NS Maintain share of business Customer 5 $200,000 $1,200,000 Growth JR GW Grow new program Customer 6 $620,000 $684,000 At Risk SW GW Build relationship with new owner Customer 7 $547,500 $680,000 Growth JR NS Lorem ipsum dolor sit amet Key aspects: Customer 8 $1,189,000 $648,000 Growth SW JR Consectetur adipiscing elit Customer 9 $688,000 $648,000 Growth SW Team KM assignment Sed do eiusmod tempor incididunt Customer 10 $575,000 $600,000 At Risk SW Sales MS goal for Ut labore account et dolore magna aliqua Customer 11 $250,000 $555,000 Growth JR JM Ut enim ad minim veniam Customer 12 $500,000 $500,000 Maintenance LH Strategic RK goal Quis for nostrud the exercitation account ullamco Customer 13 $500,000 $500,000 At Risk LH RK Laboris nisi ut aliquip ex ea commodo Customer 14 $250,000 $250,000 Growth LH RK Duis aute irure dolor in reprehenderit Customer 15 $250,000 $250,000 Maintenance LH JM In voluptate velit esse cillum dolore 23

25 Account Plans Set goals and targets for accounts Creates concrete plan for achieving goals Review process within team - itself is valuable Account Since: 7/7/2016 Billings History: Team Plan completion date: 8/25/ $1,000,000 Account status: Account Plan: Growth 2016 $1,250,000 Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. lb Resources/Team Members Touch point plan (who and how often) Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud Background Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. laborum. Analysis Sales Potential/Goal Sales Objective Customer 1 Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, Sales Support SW RK PW Sales Lead PM Account Sentiment Current Conditions/Plans/Initiatives Next 30 day plan Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Quarterly Rocks/Monuments/Key Milestones Ideal Customer Score: 24

26 Where to From Here? Conduct data analyses to inform strategy Define and communicate your strategy to your sales team Evaluate your sales process where are you strong or weak? Implement one/few tools at a time Take an active role in planning your sales and executing your sales process Strategic sales is predicated on solid strategy and leadership 25

27 Annual Automotive Tooling Update, OESA and Harbour Results, Inc. Nov. 2, 2017; 9 a.m. 3:30 p.m. Dearborn Inn, Dearborn, Michigan Register at oesa.org Key Topics: The latest tooling trends Next frontier in automation Techniques for business valuation EVs and autonomous impact on tooling Auto OEM panel discussion What the future holds for tooling Strategies for future success Who Should Attend: Tool supplier executives Companies that support the tool & die industry Suppliers to the automotive industry Automotive OEM representatives in tooling and purchasing 26

28 Thank you for the opportunity Robert Kimmel Company Page: Harbour Results, Inc. 27

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