Profit Heroes: Breakthrough Strategies for Winning Customers and Building Profits

Profit Heroes: Breakthrough Strategies for Winning Customers and Building Profits

by Bob Rickert

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Product Details

ISBN-13: 9781491846629
Publisher: AuthorHouse
Publication date: 12/30/2013
Pages: 248
Product dimensions: 6.00(w) x 9.00(h) x 0.52(d)

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PROFIT HEROES

Breakthrough Strategies for Winning Customers and Building Profits


By Bob Rickert

AuthorHouse LLC

Copyright © 2014 Bob Rickert
All rights reserved.
ISBN: 978-1-4918-4662-9



CHAPTER 1

Autopsy of a Lost Sale—The Loser's View

"Most of our assumptions have outlived their usefulness"

Marshall McLuhan


The Backdrop

This is a fictional representation of two companies involved in a large opportunity and how the winning and losing salespeople dealt with the challenges of competing for the business. National Products is the customer. They manufacture sinks, tubs, washing systems and many other products for residential and commercial construction and industrial applications. They sell direct, through distribution, and a large part of their business is done through do-it-yourself "big box" retailers.

National Products embarked on a quality improvement audit of their manufacturing facilities to address product quality problems, defects, and refinishing problems resulting from outdated spray gun equipment as well as other system related factors. This is the inside story of how two strong competitors, Quality Brands and High Beam Industries, vied for a large project to upgrade the manufacturing process at National Products.


At Quality Brands

The following is an exchange between Lamar Johnson Executive Vice President of Sales and Jim Thomas CEO, Quality Brands:

Lamar: I am sorry to report that we were informed today by National Products that they have awarded their large quality improvement project to High Beam Industries. We are really disappointed and frankly shocked. All of our key contacts, a number of whom we have worked closely with for the past five years, all seemed to be caught off guard by this decision.

Jim: That is very disappointing. We were all counting on this revenue, I believe it was worth over $5 million dollars—is that correct? I understand that we were very aggressive in pricing this deal and that we put a lot of resources on it to ensure we were positioned for success. Why did we lose?

Lamar: We are trying to get more information. The account manager Vince Billings and I are going to meet with the CFO and the Head of Manufacturing on Friday to discuss their decision and to see if we can persuade them to reconsider.

Jim: What's your hunch?

Lamar: Well first, the scope seemed to change late in the game and we were unable to fully respond in time. They gave us specific parameters for their new spray gun systems upgrade, but then changed it at the last minute. So, I think I can use that as leverage. I know this is a big disappointment for us but I can assure you that we put everything we had into this and felt very strongly that our proposal was spot-on and stronger than High Beam's.

Jim: I would like to understand the reasons why we lost. We need to make sure we evaluate how we are approaching customers and deals of this size. I want to make certain we have considered all of the factors that will drive our future success. Please provide me these kinds of details after your debrief. I want your sales leadership team to do an autopsy on this deal so we don't encounter this again in the future. I hope you are able to turn this around, let us know what we can do from the executive level.


The Loser Vince Billings' View On Losing the Business

This was a crushing defeat. I believed, and still do to this day, that we were the better choice, that we have better performing products. I know that we had long provided better service in the form of problem solving and quality improvement. For example, earlier this year when their paint mixtures were off and quality suffered, we brought in a technical specialist who helped them calibrate their systems which resolved the problem quickly. I know that alone saved them a lot of money. But not only that, with the relationships I have developed over the past five years, frankly I was just shocked. I didn't see this one coming.


My Relationships

I have been managing this account for five years. When I started it was a less than a half a million dollar a year revenue account with very low margins. In fact, that is why they gave it to me. I have a track record of taking underperforming accounts and turning them around. I have made sales quota each of the last seven years, three times as top seller once as runner-up. Always in the top 10 out of 200 salespeople.

When I took over this account, my Vice President of Sales Pat Farris acknowledged that things hadn't gone well in the past. He felt there was the potential to generate at least $3 million in annual revenue based on National Products' global growth, our lack of penetration into the account, and three new products in our portfolio to strengthen our position and give us a competitive advantage.

Early on when I took over this account, I discovered that our relationships were only at the procurement level. My predecessor had not done much to elevate in the organization. In his defense, six years ago we had some major quality issues that had to impact the relationship with National. Nonetheless, when I got there I didn't have much to work with. Overall, as the largest player in the industry, we only had about 10% of their spray gun systems business, while the rest went to three other companies.

The first thing I did was to understand our history. I wanted to see if there were any buried skeletons that I needed to know about. Then I dug into how they were organized, where their facilities were, and what type of manufacturing they were doing at each location so I could diagnose where we could add value with our products. Our product engineering and support services are absolutely world class in our industry as evidenced by our Quality Product Awards and recognition from the key manufacturing associations that track and measure quality management outcomes.

The good news is that I built this account to a $2.5 million a year. That's by basically winning every opportunity that they have put out for proposal. In addition to the guns and systems we installed, I sold National a monitoring system that helped them manage their production paint quality. With the relationships I have built and by leveraging our engineering resources, I have been able to show them tremendous operational efficiencies which I know has saved them millions.


The National Products Company Initiative

One of the National people I work closely with on a day-in and day-out basis is Chet Gretzky, Director of Manufacturing Operations. He sits two levels down from the Executive Vice President of Manufacturing Rich Bacus and is the go-to guy within the manufacturing side of the business because of his long tenure and performance over the years. He is one of those people who has the ear of senior management and survives, in fact flourishes, every time there is executive turnover.

Chet called me up in early June with a heads up that there had been an operations meeting about production quality and outcomes. The meeting included a review of an internal audit to identify process improvement areas that could support the company's business goals.

He said of the 42 plants they operate worldwide, at least 20 needed updating in their paint application processes, including replacing their spray guns systems and pumps plus filling their need for better information for improved operational decision support. Evidently they want at least 20 spray gun systems, with pumps, design engineering, installation services, monitoring equipment and more. Chet said they were expecting to invest about $200,000 to $250,000 per assembly line or between $4 million and $5 million dollars in total to bring them up-to-date with the latest technology and to ensure they hit their throughput benchmarks. This made sense. Older spray guns can clog, and operational wear and tear means more downtime for repairs and maintenance. Parts are getting harder to find and they are expensive. Older equipment is less energy-efficient — a big factor with the rising cost of energy. But most of all, they can get better quality outcomes at a lower cost with new guns that can handle higher pressures over a sustained periods.

Chet said that he would have more details within the week and would provide as much information as he could. At that point he didn't know whether they would put this out for RFP or identify a short list of companies that they believe would be capable of delivering a project of this size, but he committed to getting an answer to that as soon as he could.


My Internal Discussions

This deal was huge. In fact this would have been the single biggest deal I ever sold. Up to now my biggest was a $2 million agreement that rolled out over three years. This would have been up to $5 million dollars! I called Pat right away to let him know that this project might have serious legs. I had been hearing rumblings from the plant managers and production managers about paint application quality causing real problems like line shut downs for maintenance and repairs because the spray guns were faulting and clogging. They often had to send product down for repaint and touch-up before they could ship. But I never knew it was as big a problem as they discovered in their audit. All I knew was, I will take it. Hey, after all the other deals I chase at other companies that don't happen, I deserve a deal like this.

Pat suggested that we get a team meeting together to include Lily Chang, who heads up Product Development, our manufacturing team to make sure we could get the products manufactured in time, and our installation services team so they could put a large installation plan into their workflow. And, of course we needed someone from finance for the internal and sales pricing data that will become part of our proposal. All hands on deck, we need this one.

Beforehand Pat asked me to prepare an initial strategy for this opportunity including a review of their financials, how they are organized, who we know, where we have influence, our installed product and the customer's level of satisfaction. He also wanted to know any history that would help or hurt our chances.


My One-on-One with Pat Farris

Here's what I reported back to Pat. While profitable, National Products had seen revenue flatten out, gross margins were down and operating profit was below expectations. I suspect that coming in below expectations is one of the reasons they were looking for areas of improvement.

I explained that I had worked hard to build relationships as high up in the organization as possible and especially at the production and manufacturing levels. Nothing gets purchased if the production team isn't asking for it or supporting it. This is how I have been able to avoid doing everything through procurement. While I still get beat up on price at times, I am able to get help from their production team, plant managers and others in requesting our products and supporting me with key production metrics that justify our higher prices. It has worked well.

Pat asked me who would be making this decision. From what I understood it would be the EVP of Manufacturing Rich Bacus, the VP of

Manufacturing Lester Powers, the Manufacturing Finance Director Aisha Henderson, production leaders with a couple of key plant managers contributing, and one or two others who are closest to the production facilities and their quality issues. He asked me about the executives and the role they might play in this. He felt we needed to cover our bases to ensure we get to them along the way.

He suggested that I pull down all of the key executive's LinkedIn profiles, hit their website for executive bio's, executive presentations and press releases as well as Google them for anything that might pop up (Forbes, Wall Street Journal) — anything that could provide us insight and leverage. He especially wanted me to look into the LinkedIn connections so we could see their backgrounds, if they spent time at other Quality Brands customers, and find out if they are connected to anyone who could assist us. I told him I know the CFO and that he has been in a number of meetings I was a part of. He knows us well and the service we provide and has been very supportive. I began my research.


My Next Steps

Knowing that this project grew out of the Production Quality Internal Audit, Pat suggested that we request a copy of the audit so we could familiarize ourselves with the findings. It would be important to have that for the internal team meeting to get everyone's perspective on the best way to approach this opportunity and to win the business.

As I expected, Pat wanted to know who we are up against for this project. He knows our competitors well and there are some we match up well with and others we might have a challenge with, basically price-driven companies that always make our lives difficult.

Finally, Pat asked me what my strategy was for winning this business. I told him that it was early but I believe that we have a strong position in the account now with the people who have the most influence on this decision in terms of the technical requirements and what is needed. And I outlined my initial strategy for him.


My Initial Strategy

There were three elements to my initial strategy for this opportunity. First, I needed to document all of the value we had delivered to National Products over the past five years. That would include all of the ways we solved problems, saved them money and kept their assembly lines running. I also wanted to get some of their performance metrics on throughput, where I know we have had some measurable results. We have delivered so much value and this is our opportunity to remind them and get credit for it at the most important time of the relationship. I believed we would be the higher priced solution and didn't want to get into a price battle, so these metrics would be to defend our price.

Second, we needed to demonstrate the benefits of going with Quality Brands because of the ease of integrating the new systems with the existing spray gun systems. We would be a lower cost and more efficient answer due to things like seamless installation and shorter ramp time for operator training and support. We needed to build a strong story here to make this seem like a very logical and easy decision.

Third, I learned over time that the CEO and CFO had high confidence in the judgment of the production leadership team where we have such great relationships, so I planned to leverage them for two main things: to get as much information as possible for helping us shape the solution to favor us over our competitors, and to manage the buying process all the way to closing. Clearly, I wanted to get to the CFO and CEO if I could. But I also felt the need to dance with those who brought me to the party. I needed to take their lead at this point, and to be careful I didn't upset the apple cart politically. In my heart, I believed this was our deal to lose. Getting to the CEO or CFO would be tricky.


National Products Project Description and RFI — Request for Information

I got an email with a request for information (RFI) from procurement. In my view, it is a way to be open to all potential suppliers yet at the same time it is a way to pare the list down to a manageable number.

An RFI is primarily used to gather information to help make a decision on what steps to take next. RFIs are typically not the final stage and are instead often used in combination with a request for proposal (RFP). I called Chet and he confirmed the scope of the project, it was in fact as big as I had hoped.

He said the scope of The Production Quality Improvement Initiative included the following:

Project Goals

1. Increase product throughput by 5%

2. Reduce defects and/or re-finishing rates by 5%

3. Reduce production downtime due to maintenance and repairs by 10%

4. Improve energy efficiency to meet corporate sustainability goals

5. Improve maintenance monitoring and reporting


Project Specifications

• 20 Plants with 1 assembly line each = 20 lines

• 1 Spray Gun System (spray booths, pumps, hoses, canisters, cleaning sinks, gun racks and other accessories) per line

• Installation services (including engineering designs, changeover services)

• Maintenance Management Software for facility-specific equipment performance monitoring

• Ongoing equipment servicing program for parts and repair services

• All systems to be installed and operational by March 31st to correspond with the beginning of the second quarter production cycle

• The decision will be made no later than October 31st


I asked Chet if I could get a copy of the Production Quality Internal Audit that was done on the production system so that I could get a sense of what they found, where the shortcomings were and learn more about the metrics that they were looking to impact. This will be the baseline I will use to link my value to their needs. The Audit wasn't for public consumption but I was able to get Chet to let me have it so that I could begin formulating my strategy for the proposal.

When I got the audit, I immediately asked my Product Development Manager Lily Chang to help me think through all of the requirements we should anticipate and to start formulating our approach based on their stated goals. I wanted her input before the internal team meeting so I could guide our conversation and make sure all the team members were up to speed.


(Continues...)

Excerpted from PROFIT HEROES by Bob Rickert. Copyright © 2014 Bob Rickert. Excerpted by permission of AuthorHouse LLC.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Contents

Acknowledgments, vii,
Introduction, ix,
A Competition, xiii,
Chapter 1 Autopsy of a Lost Sale—The Loser's View, 1,
Chapter 2 Autopsy of a Sales Win—The Winner's View, 27,
Chapter 3 It's All about Profitability—How Customers are Changing, 61,
Chapter 4 From Commoditization to Profit Impact—a Sales Transformation, 73,
Chapter 5 The Profit-Centered Selling Process, 83,
Chapter 6 Learn— Customer Discovery and Financial Analysis, 93,
Chapter 7 Align— Bringing Thought Leadership and Insight to Customers, 129,
Chapter 8 Engage— Accessing the C-Suite, 145,
Chapter 9 Achieve— Selling Profit Improvement & Proving It!, 165,
Chapter 10 Installing the Profit-Centered Sales Process, 189,
Chapter 11 Why High Beam Industries Won—The Customer's View, 199,
Chapter 12 It's a Mindset—10 Building Blocks to Becoming a Profit Hero, 207,
Resource Center, 215,
Selling to Privately Held Companies, 215,
Websites for Customer Discovery, Analysis and Thought Leadership, 219,
About the Author, 227,

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