HOW MUCH DO YOU REALLY KNOW ABOUT CREATING AN EFFECTIVE KCRM ORGANIZATION?

CHAPTER: 4

DOING THE RIGHT THINGS BEFORE DOING THINGS RIGHT

Enthusiasm and skills are necessary for successful development of key customer business, but they can only work if they are applied in the right direction.

We need to develop a helicopter mind, which is constantly in touch with day to day customer dealing

2

ANALYZING THE CUSTOMER MIXIdentifying key customers is not difficult in some businesses because the customers are self-evident.

In order to determine how best to use sales and customer support resources to implement customer management strategy, there are seven steps in the process

3

STEP 1: PREPARE A PARETO ANALYSISThe Pareto analysis is complied by listing all customers in decreasing order of sales and plotting the cumulative sales related to the number of customers.

4

PARETOIf all the customers were in same size then the straight line would occur

The steeper the ascent of the actual line, the greater will be the concentration of sales

5

STEP2: PROJECT FUTURE SALES FOR TOP CUSTOMERS

Take top customers and try to make an individual projection of yearly sales for each customers for the next three years

Then calculate the percentage of total company sales contributed by each individual customer, both currently and end of the year 3 forecast.

6

STEP 3:PROJECT FUTURE SALES FOR DEVELOPMENT CUSTOMERS

List any additional customers or potential customers that have been identified as target development customers, both currently and at the end of year 3 projection.

Make an individual projection of yearly sales for each customer over the next three years and calculate the percentage of total sales contributed by development customers

7

STEP4:PROJECT FUTURE SALES FOR DEVELOPMENT CUSTOMERS

General business customers should be divided in to two categories:

Customers who have existing or potential business which can justify direct sales calls

Customers where there is not enough business to justify individual sales calls but where collectively there is enough business to warrant other forms of sales coverage.

8

STEP 5:ESTIMATE RESOURCE REQUIREMENT

Resource requirement will be quantified in terms of: Minimum number of sales calls needed to achieve

forecast level of business. Minimum number of technical support calls needed for

projected levels of business Minimum number of deliveries needed for projected

levels of business

9

THE STANDARD CALLIn assessing sales call workloads, it may be useful to think in terms of a “Standard Call” of average time duration.

Depending on type of Business, this workload analysis may be extended to technical support calls.

The workload analysis should be extended on the basis of the sensitivity of distributions (size, distance, no. of unit, no. of delivery etc.)

10

STEP 6: CALCULATE TOTAL SALES WORKLOAD RESOURCE AVAILABLE AND CHECK AGAINST REQUIREMENTS:

Equation:

Total Sales Workload = No. Of Working Days X No. Of Sales People X No. Of Standard Call/ Day

Having calculated the sales call resource workload required in step 5 we now have four figures to juggles with the following: Key customer workload resource needs (KCR). Development customer extra workload resource need (DCR). General business resource needs (GBR). Available resource workload (AR).

11

Cont… (Figure)

12

STEP 7: ALLOCATING THE RECOURSES

In evaluating the appropriateness of the Organization,

Four factors should be considered

Skills and maturity

Geography and

cost

Local contacts

Motivation

13

PLANNING FOR INTERNAL RESOURCS

FIXED

Activities that require fixed amount of time irrespective of the number of customers, order or salespeople.

• Example: Reports , Departmental meetings.

VARIABLE

workload is directly related to the size of customers, order, or salespeople.

14

INTERNAL RESOURCE CALCULATION CHECKLIST

Telephone contacts inward

Telephone contacts outward

preparing quotations

Updating customer records

Preparation of presentation material

Showroom visits

Exhibition work

Departmental meetings and training

15

CAUTIONS ABOUT TELECOMMUNICATIONS

Customers perception of a supplier is based on their experience with telecommunications. For this reason:

Don't be afraid to over-staff your reception facility. No incoming call should exceed four rings before being

answered. No incoming call should exceed four rings before being

answered.

16

HOW CAN IMPROVE SALES FORECAST Repeat end-users

Sales to distributors

Contract or capital goods sales

17

REPEAT END-USERS Tabulate past figures of customer total usage Tabulate past sales figures Calculate share of the customer’s business Estimate changes in the customer’s future business Estimate changes share of the customer’s total business Translate estimates into numerical forecast Consult with and check out forecasts and mutual expectation

18

SALES TO DISTRIBUTORS Final user market

Final user share

19

CONTRACT OR CAPITAL GOOD SALES Divide the year into four quarters.

Estimate the likely sales value.

Estimate the probability of getting the contract.

Estimate the probability of securing the contract.

Calculate the forecast value per quarter

20

A METHOD FOR FORECASTING CONTRACT SALES

EstimatedValue tk

(000)

ContactProbability

Timing Probability

Q1 Q2 Q3 Q4

Tk 000 value

Q1 Q2 Q3 Q4

Contact A 200 75% 20% 60% 20% -- 30 90 30 --

Contact B 200 20% 50% 50% -- -- 20 20 -- --

Contact C 400 50% -- 10% 50% 40% -- 20 100 80

Forecast per quarterTk 000 50 130 130 80

21

HOW DO CUSTOMER TEAMS WORK?Team members and their responsibilities:

Regional sales if the customer has widespread geographical locations or international operations.

Customer service if there are specific service complications and emergencies with major implications for the customers’ operations.

22

Team members and their responsibilities……

Technical if there are possibilities of special product application.

Training if there is a significant education element to ensure the customer gets the full benefit of your products.

Product experts if there are highly specialized product involved.

23

Team members and their responsibilities……

Internal sales if there is a high incidence of direct customer-supplier communication by telephone and fax.

Distributions if the schedule of deliveries is complicated and exceptional degrees of flexibility and responds are paramount.

24

Team members and their responsibilities……

Advertising if creative merchandizing and promotion are major aspects of the customer relationship.

Production if product availability, inventory or fluctuations in demand are sensitive areas of the customer relationship.

25

Team members and their responsibilities……

Finance if there are significant financial implications in negotiation, such as leasing, capital investment or taxation.

Senior management if high-level company politics are significant relationship factor

26