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On a quarterly basis, we also provide summary data in easy to understand histograms and pie chart formats showing the pattern of their ordering. This details, for instance, average order values. Most resellers operate equipment service departments which have a tendency to submit lots of small orders. They could be more efficient and save money by grouping them. They can also see the pattern of orders. Are they always ordering the same limited range of products? Or is there a variety of specifications? The latter tends to mean that their salespeople are tailoring the solutions more precisely to customer need.
RTM: How do you use these findings across Europe?
"We took a very detailed look at which market segments they were selling into and with which products."
CR: We compare and check one country’s breakdown with another. Why are different market segments being addressed in some countries and not in others? Does this reflect the market or the resellers’ comfort zone? Are we addressing all the segments in each country that we can? Often, market segment coverage is related to capability and confidence, and, with some focused training, we can open up the horizons. In 2004 we engaged a specific training program in sales process which has been widely taken up by our resellers and has improved confidence.
RTM: So how has the reseller base changed?
CR: Since 2000 we have reduced our resellers significantly. Now we have around 120 across Europe. As a direct result of the benchmarking process we have slimmed down a little more. Actual cancellations were minimal – less than ten of significance. The vast majority of those who departed just decided that this market was not the future for them. Some smaller resellers merged to form larger organisations, some became sub-dealers. We sold sections of our direct business to some to create larger businesses.
We encouraged mergers, as we need partners who have sufficient critical mass and financial backing to handle our more complex products and to build local solutions. Overall, the whole process was surprisingly friendly. We based it on a lot of communication over 2-3 years.
RTM: So what are the real benefits of benchmarking?
CR: I believe that there is a significantly higher degree of trust as a direct result of the necessity to be open and honest. An interesting outcome is that we all now speak the same business language, both internally with our own teams, and externally with the resellers.
A major benefit is that we have much better market visibility at a European level internally. Four years ago it was very hard for the European management team to have a clear picture of what was really going on in each region. Now we can produce serious, actionable business plans attacking real market segments. This means that we now focus on the right resellers to develop their capability, competence and skills, not only in existing markets, but also for new market opportunities.
RTM: And sales are up?
CR: Yes. It would be nice to attribute this to better benchmarking, but it is, of course, only a part of the overall developments we are implementing. Certainly, it is true that we clearly know who is selling what products to which market segments. We also know where the opportunities are by segment and territory, and that we are working with partners who have the desire, the competence and the financial strength to grow.
It has given us the precise data we need for decision making.
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