How to create a performance-driven culture
Thirty years ago, customers’ primary demands were related to product quality. Once international competition met and ultimately surpassed the existing quality standards, it became critical to build quality assurance into most elements of the manufacturing process in order to remain competitive. With that accomplished, while still necessary as the price of entry, quality could no longer be considered a significant competitive advantage. Twenty years ago, with higher quality standards in place, service became a competitive advantage and the driving force in winning market share. Consequently, demands for service forced suppliers to look at customer satisfaction as the primary criterion for success.
Now, the focus has shifted again. Due to the nature of the competitive environment where a quality product with similar features and benefits and a commitment to service are mandatory to even enter the sales arena, the critical focus has become the absolute need for added value. World Class sales forces, through a proactive analysis of what the customer needs, leave nothing to chance when ensuring customer satisfaction. They recognize that an effective sales effort goes beyond merely selling products or services; it demands that priority be given to increasing the customer’s productivity, which can only be measured through the customer’s increased revenues or reduced costs. To provide the customer with these value-added services, the seller’s entire organization must embrace a customer-driven culture that wholeheartedly supports the sales force.
Shift focus from selling “products/services” to selling “increased customer productivity” through improved revenue streams or reduced costs.
Through various approaches, sales forces are investigating and analyzing their customers’ needs and challenges. Suppliers are then reorganizing their internal processes, identifying critical skills required, creating new standards, and committing to the need for continuous improvement. With customers that account for a smaller percent of the business, the agreement to meet the customer’s need may be as simple as taking the form of a guarantee. However, the larger and more complex the customer, the more critical it becomes to formalize a mutual agreement that details the customer’s expectations and the supplier’s commitment to provide product, service, and added value. This agreement may even be formalized to the extent that it includes periodic and mutual reviews and adjustments.
Transactional Quality Management focused on the critical needs of the customer.
A performance-driven culture focuses on continuous improvement, not just meeting the expectations of today. The control process requires ongoing measurements as a sale progresses, not after the fact, and at each step of the way there should exist a checkpoint to ensure the process is working and that the focus continues to be on satisfying customers’ needs.
Shared risk/shared savings partnerships focused on selective preferred customer relationships.
In a dramatically new business model, some suppliers are moving toward shared risk/shared savings partnerships with their key, or critical, customers. In a broad definition, the supplier and the customer sign an agreement stating a cost saving goal. The supplier agrees to waive the transactional charge for goods and services, but will be paid a percentage (usually 50%) of the savings accrued. Should costs increase, the supplier will participate by assuming responsibility for part of the increase. Obviously, the supplier is very motivated to improve the procurement process for its customers.
Strong leadership to refocus salespeople from the traditional sales and service role to customer business consultants.
In a continuous effort to improve their customers’ business results, World Class sales organizations are repositioning their salespeople as business consultants. The removal of these representatives from day-to-day transactional issues is facilitated by the availability of systems and personnel to support customers’ administrative needs. The sales force is then equipped with a wide array of tools that provide the information needed to consult with the customer.
Take responsibility for educating customers in any areas that can improve performance results.
More sophisticated and discriminating corporate customers are looking for suppliers who can bring technical and applications expertise to the table. They seek a salesperson/consultant who can analyze a problem, conceptualize a solution, and assist in implementation. More than simply taking on challenges for the customer, World Class sales forces acknowledge the value in serving as an educational resource to their customers.