Rakesh Shah, founder of RVR management which focuses on providing Interim solutions for engineering/manufacturing sectors, explains how he managed to turnaround a manufacturing business that was experiencing a decline in its sales revenue.

Brief

The client was an engineering based company, who supplied instrumentation to a number of B2B based market sectors. The biggest issue for the client was that they were losing market share, and sales revenue was declining – down ten per cent from the previous year and approximately 15% the year before. Therefore, as a result a number of sales & marketing managers had come and gone.

The main brief was to recover the sales revenue for the business and to install some form of sales management process into the business. I was recruited for an initial period of three months, this then ended up being extended to 8 months

Execution

The initial few weeks were spent examining the sales/marketing process. There was no clear strategy or measurement as to how the product would be marketed to the client target segment and no marketing communication plan was in place in order to generate new business.

Closer examination of the past sales history had showed up a very worrying trend. For the past five years approx 85% of business was coming from existing accounts and in this business, once equipment is purchased it is likely to last approximately 15-20 years.

Priority 1 – Develop a detailed strategic growth plan for the business; which segment should the client be targeting, what types of accounts, how should the message be delivered, etc. Plus, a clear direction for the business, in terms of where are they now, where do they want to be and how are they going to get there.

Priority 2 – Develop a detailed marketing plan; how should the product be marketed and what new features should be developed into the product that differentiates the clients and adds value to the end customer.

Priority 3 – Focus on sales process, team building and improving product knowledge. Also introduced visual management board based on six sigma principles, which track /measured all the key data. The team where then given ownership to check/review the data and where appropriate carry out root cause counter measure in order to continuously improve/further develop the process.

Priority 4 – Coach/train the team on benefits of six sigma process (e.g. carried out current state /future state map, Kiazen, QDIP boards, 5s etc…)

Priority 5 – Coach/train the team on benefits of focusing on solution selling and taking more of a consultative approach to key accounts.

Priority 6 – Develop a key account management strategy, with key focus on building relationships at all key levels within the business (i.e. key decision makers, and influencers etc.)

Legacy

The sales/marketing transformation programme generated improvements in the company’s performance. The business achieved 21% growth versus the previous year and 26% growth versus the year before. Therefore, in the second half (32% growth v Q3 PY and 45% growth v Q4 PY) of the year the team recovered the decline from the first half of the year and exceeded the target for H2. Furthermore, the number of new leads/accounts introduced into the business increased by 30% and first quarter forecasts and pipelines are in line to achieve the top level stretch sales goal of 25% growth.

Client feedback:

“Rakesh was recruited as Head of Sales to review our sales structure/process within the UK. He introduced a number of initiatives/strategies which lead to developing/implementing a focused approach to sales process/pipeline management. The results delivered were beyond expectations driving strong growth in our equipment sales in the UK in the second half of the year.”
M.Copper – FD

The client was an engineering based company, who supplied engineering solutions into B2B industrial sectors. Sales revenue from the international market was declining, and the company had an ambitious growth plan, however no clear vision/idea as to where this growth was going to be achieved from.

Rakesh Shah (RVR Management) was recruited to develop a detailed plan, and to identify how the company could achieve its growth objectives. This then needed to be approved by the Board of Directors.

1) TASK

A strategic sales/marketing plan was developed, which was presented to and approved by the Board. This focused on a number of initiatives, which were identified when developing the plan.

The process used:

• Key market drivers
• Key changes taking place in the market
• Which segment/countries are driving the growth
• Competitive analysis
• Market attractiveness model – this clearly identified where the client should focus his resources in order to achieve growth
• Resource allocation
• Areas of functional areas to improve
• VOC – voice of the customer survey
• etc.

Based on a detailed plan analysis, it was identified that the company needed to focus on the following:

2) INITIATIVES

• Digital marketing and communication
• Vertical market segment growth
• Geographical market expansion – by each region top 7 countries identified
• Channel development
• Key account strategy – by each segment – Top 20 accounts identified
• NPD – New product development

3) EXECUTION

Marketing – Re branding exercise undertaken – This was developed in form of a workshop – involving all the internal staff of the company. An external company was then given a brief to develop new logo/branding.

VOC – (voice of the customer) was carried out. This identified how the external customers viewed the business and areas of improvement/ product gap analysis.

Digital Marketing Communication – A detailed communication plan was developed/implemented (web site, SEO, social media, newsletter, blog, technical article, journal, news banner, trade association etc.)

New brochure based on total engineering capabilities, as well as ensuring it was vertical segment focused

CRM – building of a data base – using external agencies as well setting up of an internal telemarketing team was undertaken – to drive lead generation.

Channel development process introduced – This was to ensure the company identified the right types of agent/distributors for the target countries/segment.

Online spares – This was identified an area of growth and to generate incremental revenue

Sales – Sales team re-organised based on region, ensuring resources where re allocated based on market growth/opportunities by country/segments. New sales process introduced – e.g. effective call planning, product training, needs analysis questioning, key account management strategy, daily management process introduced (i.e. number of leads/quote/orders closed /pipeline stage) etc.

4) RESULTS/LEGACY

• Introduced new visual management board to drive continuous improvement. Win rate improved by 10%
• New lead generation/building data base – Pipeline value increased by 30%
• New channel development process introduced/implemented, to add 20 new international distributors
• Focus approach by sales/marketing team – showed a 15% improvement on order intake
• Online spares revenue increased by 50%
• New R/D department set up, and process introduced to define customer un-meet needs, 5 new potential ideas identified
• The company now on track to achieve its 3-year growth objectives, based on the current win rate/opportunity identified the company is likely to achieve its growth objectives within next 18 months

Client feedback

“Rakesh was a very professional and committed member of the senior management team, whose contribution to the business was much valued and results there to be seen”
Group CEO – C. Droogan

The Client

A SME company based in Northamptonshire

The Challenge

A couple of long standing, regular clients ceased trading which left the owner in need of finding new business. The MD felt his team were very reactive and no proactive activities were taking place. He was also not 100% clear in his mind in terms of the direction the business should be taking; as a result, the company had not seen growth in sales revenue, profit or customer retention.

The Solution

Increase sales revenue and profitability of the business with a view to clearly identifying the target market, and then focusing specifically on growth strategies, plan and process, where by the company is taking a proactive approach.

Task

1. Train, coach and facilitate the team in developing a detailed strategic market expansion plan
2. Train, coach and facilitate the team in developing a detailed marketing plan (including specific tactics to generate leads from the target market)
3. Sales training – Provided in depth training to the team, covering number of technique and tools, e.g.- call planning, needs analysis, linking needs to feature of the product that will benefits the clients, handling objections etc…

Client Benefits/Feedback

“Rakesh helped us in number of key areas of our business. This included developing a strategic plan that provided us with a clear sales and marketing plan and strategy. This then enabled us to develop a business plan based on key market segments. Rakesh also undertook training/coaching of the sales team and put in place tools to assist with future sales development and customer retention. Rakesh also helped us to develop the concept of “value selling and total cost of ownership model” this has now enabled the team to articulate the key benefits of using some of our solutions. We are now starting to see signs of improvements in our business performance and sales conversion rate and we have continuously used the Rakesh approach/methods in order to develop our business further. I would have no hesitation in recommending Rakesh and will look to use his service again in the future.”
T. Mariani – Managing Director

Business Case analysis has become mandatory for important decision making and planning in government, business, and non-profit organisations everywhere. As a result, most case-building responsibilities now belong to those who are not “finance” people.

Everyone talks about the business case but surprisingly few people really know what that means.

That was true in the early 1900s, when business case analysis was born along with a new, developing discipline called finance. In those days, most people thought that business case analysis was “finance.” They thought the job of building and using case results should be left to financial specialists.

Lack of business case understanding is pervasive in 2016, as well, but there’s a difference: more than 90% of the professionals called on to produce or use case results today are people who do not practice finance for a living*. They generally have little or no financial background. They are product managers, project managers, agency directors, sales people, engineers, training consultants, and many other things that are not “Finance.” Now, it is they who are asked to build the case. We see many of these people in our `our business case seminars. ` They ask : What happened?

Fortunately, the difference between a strong case and a weak case has very little of to do with finance and everything to do with understanding a few simple elements of case design. To help understand why, consider briefly a “Top Five” list of common business case mistakes. For more on these issues, please see Business Case Essentials or the Business Case Guide. See details below.

Business Case Mistake 1: Thinking it’s “finance” and it’s a job for financial specialists

For those who build the case for decision support or planning, the challenge is not financial mathematics. The case may use a few simple financial metrics to communicate results, but the central challenge is deciding which costs and which benefits belong in the case in the first place. That is not finance. It s a matter of identifying all the important consequences of a proposed action, systematically and thoroughly.

Equipped with a few simple tools like the cost model and the “benefits rationale,” for instance, the task of ensuring that everything relevant comes into the case is straightforward and clear (it may be tedious at times, but it is straightforward and clear). See, for example, Business Case Essentials.

Business Case Mistake 2: Projecting income instead of cash flow

People may think that the primary result of the business case is a pro forma income statement. For the business case, however, the fundamental metric is cash flow, not income. Why?

First, many cases look into the consequences of actions that have little or nothing to do with producing income, especially in government or non-profit organizations. Beyond this, however, evaluating costs and benefits in terms of cash flow is a direct measure of each item’s worth. Income (or profit), on the other hand, measures less directly, because income reflects accounting conventions such as allocated costs, depreciation expense, and others. These factors “muddy the waters” when trying to measure consequences that actually follow from one action or another.

You may include a projected income figure besides the expected cash flow if decision makers want to know what the proposal will do for reported income per se. But cash flow, not income, is the clearest first answer to the basic question: Is this a good business decision?

Business Case Mistake 3: Omitting scenarios that help address the main question

We propose actions in order to make something better, trying to achieve cost savings, improved service quality, or increased sales revenues, for instance. A business case for an action aimed at any of these objectives needs at least two scenarios: a “proposal” scenario and a base case or “business as usual” scenario (sometimes the base case is called the “as is” scenario, or “current course and speed). Is the “business as usual” scenario really necessary?

The terms “savings,” “improved,” and “increase” are relative terms. We have to ask: Savings, relative to what? Improvement, relative to what? Increases over what? The “what” is a base case scenario that projects consequences if the proposal is not implemented. The base case scenario is indispensable if you want to know how much things will change.

Business Case Mistake 4: Using financial metrics blindly

The business case is not an exercise in finance (No. 1 above) but it may use a few simple financial metrics to help show the meaning of projected cash flow values. Some popular financial metrics include ROI (return on investment), IRR (internal rate of return), NPV (net present value), TCO (total cost of ownership) and PBP (payback period). I have heard senior managers say, for instance: “We’ll choose the investment with the better ROI,” or “We do not undertake any major spending unless there’s a payback period of 18 months or less.”

Should important business decisions really turn on one or two such measures?

Each financial metric has strong points: it tells you something useful about projected cash flows that might not be apparent from the cash flow figures themselves. However, each financial metric also has weak points: Each can mislead you when used blindly. Different metrics from the same projected cash flow statement, moreover, can point in different directions: one action has a high ROI but low NPV, the other action has a low ROI but high NPV. Which metric do you follow?

Also, each metric can be defined in several different ways. And, there is a lot of bad or just plain erroneous guidance coming from superficially respectable business case tools on the market. One vendor’s tool, for instance, tells you that IRR “…is cash flow received over a period of time vs. capital outlay.” You should know that that IRR has several definitions but that is not one of them. Following that kind of guidance will not enhance your credibility.

You do not need an MBA to build or use the business case. You do need a comfortable, definition-level understanding of a handful of `simple business measures`, and their strengths and weaknesses.

Business Case Mistake 5: Omitting important benefits because they are “soft benefits” or “intangible.”

There is a widespread belief that some benefits (positive contributions to meeting business objectives) of the action under analysis are second-class citizens. Unfortunately, real contributions to important objectives are sometimes labelled “soft,” or “intangible,” and omitted from the case.

“Soft” usually means “unlikely” or “cannot be measured in financial terms.” The term “intangible,” moreover, means there is “nothing to touch,” no evidence that the benefit exists. Many people use it when they really mean “non-financial.” If there is no objective measurable evidence that a benefit exists, then yes, it is intangible and does not belong in the case. However, when the organization has important business objectives having to do with customer satisfaction, branding, image, quality, safety, risk reduction, employee satisfaction, professionalism, or with other outcomes defined first in non financial terms, and when a proposed action contributes towards meeting these objectives, the contribution can be both important and tangible–even if it is non financial. Does your proposed action contribute to one of these objectives? If so, the benefit belongs in the case! (For more on bringing “soft” and “intangible” benefits into the business case, see our `Business Case Essentials`.

Remember that assigning financial value to benefits should be one of the last additions to the business case structure, not the first: if you can show in tangible terms that your proposal contributes to a business objective, the benefit is real.

Take action! Learn and practice proven 6D Business Case Framework !

Now go and be more successful.

About the Author Colin Thompson

Colin is a former successful Managing Director of Transactional/Document Manufacturing Plants, Document Management/Workflow Solutions companies and other organisations, former Group Chairman of the Academy for Chief Executives, Non-Executive Director, Mentor – RFU Leadership Academy, Mentor – Coventry University, Mentor – The Chartered Institute of Personnel and Development, author/writer Business Advice Section for IPEX, Graphic Display World, News USA, Graphic Start, plus many others globally, helping companies raise their `bottom-line` and `increase cash flow`. Plus, helping individuals to be successful in business and life in general. Author of several publications, research reports, guides, presentations, business and educational models on CD-ROM/Software/PDF and over 4000 articles/reports and 35 books published on business and educational subjects worldwide. Plus, International Speaker/Visiting University Professor. View Colin’s short bio