Survey results: Sales development opportunities

What are the biggest challenges of manufacturers and service providers supplying the retail industry? What are the capabilities they need to develop to tap the full potential? These were the two main questions of a recent survey of Cosaris and the German grocery magazine LPinternational.

Manufacturers and service providers based in the DACH market (Germany, Austria, and Switzerland) were asked about their current challenges and issues when working with their customers. The other focus was to analyse the degree of professionalism in four key sales competence areas: strategy, organisation, information management and sales/marketing activities. The key findings were published in last week’s issue of LPinternational and participating businesses receive a personal report of their individual situation.

 

Current challenges

Business challengesCompanies named three main challenges when working with their customers: pricing and promotions, supply chain efficiency and introducing new products. In contrast to that we asked about the three main areas they were planning to focus on to develop their business. 77% of all companies told us the most important topic will be to expand into new markets. This was followed by improving customer relationships (62%) and organisational development (54%).

 

Strengths, weaknesses and development potential

The main focus of this survey was to identify strengths and weaknesses as well as opportunities of development. To better compare different organisations and determine degrees of professionalism in different areas we calculated an average value between 0 and 100 percent. Higher values show higher professionalism in a certain capability area with values of 75% or more showing strengths. The methodology was based on a light version of our Sales Capability Check.

Sales Capabilities

The chart shows below average values and capability levels for the four areas. As none reaches 75% there is distinct room for improvement in all four. Obviously the main weaknesses are related to information management. However we need to look in more detail to understand the underlying issues.

Strategy

Sales StrategyThe biggest weakness when assessing the strategies of participating companies is a lack of awareness for their sales potential with different customers, markets and sales channels. But without clearly identifying the best growth opportunities or the profitability of customers it is almost impossible to build an effective sales strategy or efficiently allocate resources to certain sales and marketing activities. Companies therefore need to question how realistic commercial objectives and sales targets really are and if they already focus on the most profitable customers, markets and channels.

 

Management and Organisation

The survey further shows the three main opportunities of development for organisations: The way they collaborate with customers, the effective management and controlling of sales teams as well as the design and condition of interfaces both internally (between and within departments) and externally (with customers).

Management and OrganisationCloser strategic collaboration with customers could open many different opportunities. Businesses could win important insights into the strategies and challenges of their customers and on shopper behaviour and motivation. On the one hand this would help to design innovative new products and services. On the other hand it would allow creating more efficient joint processes and increasing forecasting accuracy and on-shelf-availability. If businesses could thereby succeed to create mutual benefits, the focus of the relationship would move away from being only transactional and based on prices.

The challenges of sales controlling and management are twofold: First, the analysis of strategies already showed that commercial potentials with different customers and markets are widely unknown. Hence organisations are wasting resources due to the wrong focus. Second, sales targets and remuneration models often lack the right priorities. Making best use of customer potentials, increasing market and category shares as well as customer development and loyalty should be included to give sales people the right direction.

Interfaces between sales, other departments and customers need to be structured more efficiently. Internally, conflicting objectives of different departments, unproductive meetings as well as bureaucratic and administrative barriers are major stumbling blocks for sales teams. Externally, joint processes and KPIs need to be redesigned and further improved. In addition organisations need to make sure that all relevant employees fully understand strategies, challenges and business processes of their customers.

 

Information

Information ManagementThe survey shows that the challenges are manifold when the management of information is concerned. This contributes to some of the issues mentioned above (in particular the assessment of growth potentials or the management of sales teams). Companies need to work on each of the surveyed information areas. Crucial would be more shopper insights for consumer goods manufacturers to help create new, innovative products and build effective promotions. To better estimate their sales potential additional retailer-, market- and channel-insights would be important. In addition organisations need to improve (IT) systems to provide tailored information and insights for management and employees.

 

Sales and Marketing activities

Sales ActivitiesAs we can see, eBusiness in all its forms is the biggest weakness of most organisations taking part in the survey. Although a web shop might not work for every business, it could help many to attract and acquire different customer segments and enter new markets. Certainly most would benefit from using the opportunities offered by social networks. Facebook, Twitter and Co can be a great way to communicate with consumers. In B2B the likes of LinkedIn and Xing help to find the right contacts and keep customers or prospects engaged.

The survey also shows that sales and marketing activities need to be better defined and managed to be more effective. At present many activities are not contributing to overall business success and are therefore wasting valuable resources. Again the reason often lies in the already mentioned weaknesses of the strategy, organisational issues as well as lack of information and insights.

The capability of sales people seems to be a strength of many organisations. How much more successful could they be if shown how to focus on the right opportunities and most profitable customers and markets.

 

Summary

Two main themes run like a common thread through the survey: First, lacking awareness of opportunities and areas of highest sales potential (this equally applies to customers, markets and different channels). Second, the need for relevant information and insights as well as the way they are made available within organisations. This combination has a negative impact on many other areas. In particular it becomes difficult to manage, coordinate and control sales, marketing and other departments and their activities.

 

Based on the survey findings the following actions can be recommended:

  • Analysis of the sales potential and profitability of customers, markets and channels
  • Redesign and development of sales strategies based on the findings of this analysis
  • Restructuring of organisations and information systems to support collaboration, management and controlling
  • Adaptation of sales- and marketing activities to better reflect individual strategies for different customer segments, markets and channels

Done right this can lead to a considerable increase of profit in the short term and free up resources for future expansion.

 

Methodology

For this survey we used a light version of our Sales Capability Check. To learn more about the survey or our assessment tool please contact René Schneider at rene.schneider@cosaris.com or +44 7908 525480. We are looking forward to hearing from you and discussing your challenges.