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Case Study: Building a Customer-Centric Organization For Competitive Advantage

Situation

A global Consumer Packaged Goods manufacturer marketing products in 10 categories (including frozen, shelf stable food and non-food, natural organic and foodservice categories) across 6 Business Units (BU) determined that it could improve its competitive advantage and customer centricity in the U.S. by integrating its Sales organizations. The company went to market with 9 hybrid (direct and indirect) Sales organizations and distributed products through both warehouse and DSD systems to the grocery, mass, supercenter, convenience, drug, natural/organic, dollar, foodservice and other specialty retail channels. Most retail stores (mass, supercenter, and grocery) would have 3 to 4 Retail Sales Representatives calling on them and 5 to 6 account managers calling on headquarter locations. The vision for the new integrated organization included the ability to satisfy consumer wants on every consumer-buying occasion and to be recognized and rewarded by customers for providing business solutions that add value. More specifically, the organization needed to be:

 

Characteristics Critical Success Factors
More Effective Major account growth and optimum availability to achieve specific BU business objectives,
and aggressive five year CAGR objectives
Faster Speed to shelf productivity relative to new products and categories
More Efficient Reduce and realign relative sales investments for a higher ROI
More Competitive Cultural transformation, accountability, account team development and redefinition of retail execution

 


Solution

Initially DHC worked with a small group of senior corporate executives to establish the high-level vision, mission, specific objectives, metrics, guiding principles, timelines and overall scope and approach to the transformation effort. Subsequently a Sales Transformation Team was created (composed of 6 dedicated senior managers and 6 support managers from the client organization). It reported to a corporate steering committee (composed of the Sales leaders of each of the Sales organizations and Human Resources) and an executive committee composed of the BU general managers and the Corporate Leadership team. DHC augmented the Sales Transformation Team with a team of resources and worked with the client team throughout the three phased Transformation initiative: Phase1: conceptual design; Phase 2: detailed planning; Phase 3: implementation and transition.

The dimensions of the project included the creation of an entirely new, customer focused Sales structure (including cross-functional and cross- BU account teams), a new customer segmentation model to optimize sales investment, a financial model and strategy that tied to the BU mid-term plans, a staffing strategy, job rationalization and update of job descriptions for all positions in the Sales organization, new “ways of working” (integrated processes & “Best Practices”) on an intra-functional and cross-functional basis, the creation of a business systems integration team, accountability, performance measurement and sales incentives alignment and a change management plan for cultural assimilation.

Key components of the new organization design included consolidation and realignment of the Internal Sales Support structure, creation of geographically aligned large and small outlet selling organizations (including model market support and 3rd party services realignment), establishment of 18 dedicated account teams, BU realignment, creation of a cross-brands promotion team and a co-marketing department, creation of a new business development Sales organization, a new consolidated food service Sales organization, realignment of the customer service function and customer P&L’s.

A critical success factor for the new organization was the ability to align BU business objectives with Field Sales priorities, improving the coordination of trade funds, business and support processes, workload balance and communication. To achieve this alignment, a BU Sales Development department was created. In conjunction with BU leadership, these BU Sales Development teams were responsible for establishing route-to-market strategies, developing the strategic sales approach to accomplish BU objectives, developing tactical trade spending and new item launch plans/programs and effective two-way communication between the BU and the Sales organization. In effect, these BU Sales Development Managers were “the face of Sales” within the BU’s. Coordinating the interaction between Sales and the BU’s required the creation of a new collaborative planning process and agreement to a number of key assumptions like:

  • BU’s establish the business parameters for success
  • BU’s and Sales jointly establish the “conditions to win”
  • Sales delivers the in-market tactics to deliver the Operating Plan
  • Sales organizes around customers and categories
  • Sales is responsible for customer profitability

Working with the Sales Transformation Team DHC supported all aspects of the transformation including project management and administration, strategy and organization design, financial analysis and rationale, detailed implementation planning, change management and internal and external communications planning and execution. Change management and training were significant undertakings and critical enablers due to the need to train employees in newly created jobs, newly defined jobs, new “ways of working” and/or cross category education. DHC was also assigned the responsibility for implementing a new sales incentive plan, tracking performance and providing HR with the payroll feeds. In conjunction with DHC’s sister company, MossWarner Communications, DHC was responsible for the development and production of Executive review/approval presentations, management communications sessions, Internal Sales force communications, external stakeholder communications, a National Managers Meeting, a National Sales Meeting and regional roll-out meetings. Additionally, DHC was responsible for writing the 100+ page Sales Transformation Brief which documented the transformation methodology, go-to-market strategy, structural design, five-year financial objectives, and delineated specific functional responsibilities, accountabilities and processes.


Results

The full transformation was successfully executed in 11 months versus the original 16-month timeline, and subsequently the team received the highest honor in the Global Corporate Award Program. Additionally, the project methodology was shared globally and adopted/adapted to other regional initiatives. The new, more customer centric Sales organization better positioned the company for the achievement of aggressive long term BU objectives through business segment investment plans and significantly changed the function’s cost structure. Overall net savings were significant, but more importantly, the initiative resulted in a realignment of sales investments with a focus on ROI, customer resource alignment and performance against BU expectations. Importantly, a 5% sales growth target was achieved in the transition year.


© COPYRIGHT 2017 Dechert-Hampe Co.

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