The Power of You Individual Excellence Shared Success Creating a Best-In-Class Sales Force Daniel J. Krajewski Executive Vice President & General Manager CIT Vendor Finance Office & Technology Group ELA Captive Finance Leasing Conference April 11, 2006
The Power of You Individual Excellence Shared Success CIT Vendor Finance: At-a-Glance CIT Vendor Finance through its market leading leasing and lending product capability, relationship structuring skills, global presence, scalable shared services platforms and best-in-class sales teams provides vendors and intermediaries with financial solutions to maximize customer sales 400+ sales professionals $13+ Billion Managed Assets 30+ Countries
The Power of You Individual Excellence Shared Success Need Global Sales Development Approach Americas Europe Asia Pacific USA CAN MEX BRZ UK IR FR GER ITL SPA NETH AUSTRIA SZ SWE NOR DEN AUS HK CHI S.KOR SING MAL TAI IT Telecom Office Equipment Printing Construction Test Equipment Medical Tools Software Other
The Power of You Individual Excellence Shared Success CIT s Global Framework For Sales Excellence Strategy Alignment Leadership Execution Target Sales Force on Market Segments Where CIT Can Deliver The Most Robust Value Proposition Focus And Deploy The Sales Force To Maximize Efficiency Across Sub-Segments And Channels Invest In Hiring, Onboarding, Training And Rewarding Sales Force Align Growth Targets With Incentive Compensation Use Lead Generation And Sales Automation To Maximize Performance
The Power of You Individual Excellence Shared Success Strategy Market Intelligence Used to Drive Sales Strategy U.S. Equipment Financing Environment Volume Equipment CAPEX Terms & Conditions Applications Accepted Equipment Software Booked Lost Rejected Equipment expenditures rose (B) $250 76% of applications were 100% across the board in the 4 th accepted in 2003, up from 80% quarter with the sole exception $200 67%, reflecting easing of 60% of aircraft. terms. And, the greater $150 proportion Lost reflects the 40% aforementioned increase in 20% $100 competition. 0% '03Q4 '04Q1 '04Q2 '04Q3 '04Q4 2002 2003 Source: Global Insight Source: EL&F State of Industry Report Leases Outstanding Equipment Leases Outstanding Credit Quality Average Full-Year Losses US Banks US Non-Banks Bank leases dropped by $1.5B Charge-offs declined but 1.5% $500 between January and (B) $400 remained above previous February according to the $300 levels. Smaller lessors, those 1.0% Federal Reserve and Finance $200 generating less than $50 MM, Company Leases books could $100 charged off just over 2%, 0.5% not make up the difference. $0 compared with about 1% for 0.0% 'Oct 'Nov 'Dec 'Jan 'Feb larger lessors. 1999 2000 2001 2002 2003 04 04 04 05 05 Source: EL&F State of Industry Report Source: Federal Reserve, Assumptions Pricing Leasing Spreads (Pre-Tax) Lease Securitization Lease Securitization Volume Public Offerings Slow growth in total leasing 6% Volume in public offerings of $10,000 volume means that the focus 5% lease-backed securitized (MM) $8,000 becomes taking market share 4% assets is on pace to decline 3% $6,000 from competitors which leads another 50% from from just to the resultant decrease in 2% last year. Securitization $4,000 spread and more rigorous 1% volume is shifting to Private $2,000 efforts around cross-selling. 0% Placement in particular.. $0 1999 2000 2001 2002 2003 2000 2001 2002 2003 2004 Source: EL&F State of Industry Report Source: EL&F State of Industry Report 4 Identifying Opportunities Mining of 3rd party data Monthly market dashboards Targeting Customers Tools identify highpriority prospects Company analyses to support calling
The Power of You Individual Excellence Shared Success Strategy Customer Voice Used to Refine Value Proposition Continuous process Primary Market Research Needs-Based Segmentation Value Driver Alignment Closed Transactions Voice of the Customer identifies needs CIT capabilities matched to target needs Value drivers define sales approaches: channel, product Reps sell CIT value proposition Increases customer loyalty
The Power of You Individual Excellence Shared Success Alignment Segmentation to Drive Penetration Led by Chief Sales Officer Geographic Reach Industry Segmentation Product Expertise Leader/Mentor Program Identify opportunity by region to maximize coverage Separate industry touch to monitor market trends Create Subject Matter focus groups to share best practices Challenge experienced reps to develop new hires
The Power of You Individual Excellence Shared Success Leadership Robust Set of Tools For Sales Development Actions to Hire and Develop a Best-In-Class Sales Force Recruit great sales talent Have a robust assimilation program to improve speed to productivity Use disciplined performance management process Relentlessly focus on developing and improving the sales force Set aggressive goals, linked to business objectives Hold individuals accountable for results Recognize and celebrate top performers Examples of CIT Sales Development Tools Sales Competencies Behaviorally-Based Interview Guides 12 Month Assimilation Program New Hire Checklists Mentor/Advisor Programs Dedicated Trainers Skill Assessment Tools Training Programs to Address Skill Gaps
The Power of You Individual Excellence Shared Success Execution Salesforce.com Used To Automate Sales Benefits for Salespeople Automate/simplify tasks Increase face time with customers Get to the right prospect at the right time Benefits for Sales Managers Market coverage view Drivers of wins & losses Measure sales force performance
The Power of You Individual Excellence Shared Success Execution Salesforce.com Enabled Through Blackberries View custom fields, custom objects Look up contacts and call/email them directly. Update information in SalesForce.com from the BlackBerry View all active history View reports on the device Either general reports, or specific to an account
The Power of You Individual Excellence Shared Success Multi-Level Metrics Used to Track Performance Top Level Financial Metrics High-Level Drivers Examples of Primary Drivers Net Revenue Asset Growth Market Share Size / Share of addressable market Channel penetration Share of wallet New Volume Fees Run-off Usage Sales Force Size Sales Productivity Number of new hires Turnover optimization Compensation alignment Talent strength Conversion efficiency Penetration effectiveness Assimilation effectiveness Customer retention strategies
Developing & Motivating a Bank Leasing Sales Force Captive & Vendor Finance Conference April 11, 2006 John Hmelnicky Vice President / Sales Manager Small Ticket Group SunTrust Leasing Corporation
Developing. Starts with recruiting model... Inverse correlation between recruiting model & development needed: Higher Experience = Lower Development Lower Experience = Higher Development
Developing. Higher Experience Lower Development Lower Experience Higher Development Base Salary Company Training Industry Training Management s Time Impact Timing
Developing. Key Attributes Disciplined Enthusiastic Intelligent Goal Oriented Proactive Strong Communicator Energetic Independent Positive Attitude Confident
Developing. Key hiring credos: The best indicator of future performance is past performance! Prove what they claim They need to Get It! Company philosophy, culture, process, measure of success, etc.
Developing. High Experience Model (SunTrust Preferred) Bank Orientation Day 1 Leasing Company Orientation Day 2-6 Territory Introduction Other leasing reps Day 7 Bankers / Groups 1-2 Months Ongoing Individual Training As needed Heavy phone time for 2 months Regular Group Conf Calls / Mtgs. Ongoing Sales, Credit, Admin, EMG, etc.
Motivating. Starts with corporate environment: Freedom Entrepreneurial Opportunity Trust Open Communication Fairness Note: Matched to attributes we seek
Motivating. Compensation Structure: Base Salary: Commensurate w/ Bank guidelines (competitive) Commission: Not capped In alignment w/ corporate goals + / - impact based on factors such as spread, term, source, rate lock cost, etc., not just original equipment cost
Motivating. Other Motivators: Annual Bank-wide Awards Banquet & Gala Management listens to Sales Open communication - making changes to help them sell more Bank referral opportunity Still need to motivate the banker
Motivating. Bank Challenges..still need to motivate the banker! Awareness Focus (compete for face time & product shelf time ) Goal priorities Turnover Loan vs Lease Outside channel sources (Vendor / Broker) w/ existing bank clients
Motivating. Bank Motivation Protects customer from competitors Referral incentive: Designed based on bank line-of-business directives Actual payment, as % of deal, to individual banker & LOB Credit toward loan goal (i.e. a lease = a loan) for banker & LOB Either way, salesperson pays for incentive (fixed % of $ s) Bank-wide recognition Monthly Leaderboard Additional prospecting tool to help meet call volume requirements New Business - referrals back from Leasing Company
Developing & Motivating a Bank Leasing Sales Force Keys to Success: Leasing Company aligned with Bank Salesperson aligned w/ Leasing Company & Bankers Everyone knows mutual goals & shares in results!
Building an Effective Channel Sales Force Chuck Thomas Director, Worldwide SMB Sales & Marketing IBM Global Financing ELA Captive Leasing Conference April 11, 2006 2006 IBM Corporation
IBM Global Financing IBM Global Financing Vendor Sales Environment Multiple sales channels Multiple products Hardware Software Services Multiple financing offerings IBM Field Sales 475 account teams + 1,500 reps IBM and non-ibm Worldwide IBM and non-ibm Business Partners 1,500 firms ibm.com Telesales 850 reps 2 2006 IBM Corporation
IBM Global Financing The Four Components of Every Financing Deal Hardware Software / Services Business Solution Enterprise SMB Buyer Seller Field Rep Telesales Reseller / Partner Financing Product Lease (FMV, FPO. ) Loan 3 2006 IBM Corporation
IBM Global Financing Strategy Understand Buyer and Seller wants and needs Understand product and service go-to-market model Create, Align and Integrate financing offerings, infrastructure and sales coverage with Vendor s go-to-market sales execution and marketing model Enable sales channels to sell financing 4 2006 IBM Corporation
IBM Global Financing What Motivates Product Reps to Sell Financing? OFFER TOTAL SOLUTION CLOSE BIGGER DEALS CLOSE DEALS FASTER INCRESE PROFITS FACILITATE FUTURE BUSINESS CREATE END-OF-LEASE IMPENDING EVENT IMPROVE DSO IMPROVE ACCOUNT CONTROL EARN INCENTIVES Clients want one-stop shopping of hardware, software, services, maintenance and financing. Financing allows clients to acquire more equipment and services with affordable monthly payments. Financing can often be approved faster; often without capex approval process. Focus on monthly payment helps avoid price discounting and improve margins. Clients who finance have greater propensity to upgrade and do it sooner. Financing provides built-in opportunity for future sales. Financing shortens A/R cycle plus transfers credit risk to lessor. Financing provides additional customer touch opportunities. Financing incentives put more cash in sales rep s pocket. 5 2006 IBM Corporation
IBM Global Financing What do Product Reps Need to Sell Financing? Speed and Efficiency Fast, efficient and predictable processing backbone Service High touch sales support staff Comprehensive, effective and timely marketing support User-intuitive, self-service support tools available 24/7 Integration with their sales processes and tools Clarity and Consistency Logical, understandable and enforced coverage model, polices and processes Competitive Offerings Appropriate to the client and the deal Compensation Meaningful, visible, simple and timely 6 2006 IBM Corporation
IBM Global Financing Key Elements of Effective Vendor Sales Programs Integrated and aligned Offerings Infrastructure Sales Coverage Channel Enablement Incentives Education Sales support and collateral Web and other productivity tools 7 2006 IBM Corporation
IBM Global Financing Seller Incentive Alternatives Captive Sellers Revenue Uplift Increases revenue contribution of product sale Profit Uplift Increases profit contribution of product sale Shared Financial Measurements Revenue and PTI flow to sales reps, managers and division bottom line Business Partner Sellers Simple Fee percentage of dollar amount financed; may be tied to use of specific tools, processes and/or programs Rate Uplift Partner can uplift lease rate within defined parameters Volume Incentive Fee paid on attainment of origination target 8 2006 IBM Corporation
IBM Global Financing Sales Support High tech Sales portals Online tools and Low tech e-mails Rate cards Self-directed education Simple Excel proposal tools 9 2006 IBM Corporation