In 2004, as Director General, I had to reform the sales department of an award manufacturing enterprise. The main reform that needed to be carried out was due to a change in the company's strategy. The main product of the enterprise was custom-made awards, badges, and souvenirs. At the same time, a situation has historically developed when a company’s sales manager, in addition to orders for products of own production, could also take orders for products that the company itself did not produce, but only acted as an intermediary.
My analysis of sales showed that such an “extra income” is very expensive for an enterprise - instead of selling a customer and selling products of our production, the sales manager often went the way of the least resistance and took any orders. As a result, the company, of course, received additional income through mediation, but its own production was not loaded with work, which led to high fixed costs.
According to the new policy (on how to draw up policies in the company I wrote in detail in chapter 10 of the book “THE BUSINESS OWNER DEFINED: A JOB DESCRIPTION FOR THE BUSINESS OWNER” ), which was designed to cope with this situation, we completely abandoned this “extra income” and sold anything to our clients Own products were banned. Looking ahead, I will say that this decision was far-sighted and successful, it contributed to the growth of the enterprise and the strengthening of its position.
As soon as the employees were introduced to this new policy, I received a letter of resignation from one of the successful sales managers. As it turned out later, he quit and opened his own “business”, acting as an intermediary between our corporate clients and manufacturers of souvenir products. He “took” the accumulated customers with him, and we had to make significant efforts to return these customers. By the way, we were not able to return the largest client (one of the most powerful ministries of the country). Personally, I was furious because I personally brought this client and spent “hilling” it for about a year, and then I transferred the work with him to the manager, who took the client.
Of course, nothing happens without a reason. Therefore, I deeply studied this issue and found out 3 typical errors that I described in my article “Why do we lose customers”.
I will share with you an algorithm of actions that will help to get out of this situation.
The first thing I did was to assemble a staff meeting and give a very tough assessment of what happened - “a former employee stole a client from all of us . ” Then, together with the head of the sales department, we made a plan for meetings with the clients of the resigned manager and urgently met with each of them to establish relationships. This action was enough to cope with a dangerous situation and prevent the diversion of customers. True, I had to run around in meetings myself. The truth of all could have been avoided - had there been a book in my life, which I later wrote myself, about the duties of the owner .
It was clear to me that others could follow this dismissal, “novice businessman” may need assistants, it was necessary to prevent this. The next thing I did was write a policy in which I described in great detail that a good customer is the result of the activities of not only the sales manager, and in order to get the client, the advertising and production and accounting departments worked too. If an org chart worked for us, it would be obvious to an employee! In this policy, I have shown that every good client is a very valuable asset that is created by the work of the entire staff of the enterprise and this creation is contributed by both the director and the worker. I also gave a tough assessment of “customer theft” and explained that this inflicts a blow on every employee of the enterprise. And finally - there was formulated the rule that the resigned employee does not have the right to work with clients, whom he received contact with while working in the company. Immediately after the publication of this policy, all employees of the company were acquainted with it and this document was the first that employees study when hiring. The publication of this policy alone does not guarantee implementation, but nevertheless, it forms a point of view and a certain agreement among employees.
The next step is to create rules according to which an employee can quit the company only after having described successful actions at the post, conducted an apprenticeship to his successor, and handed over all official documents to the successor or manager. These rules were recorded in employee contracts and job descriptions. In particular, before the dismissal, the sales manager had to introduce his receiver (or, in the absence, the employee appointed by the manager or the manager himself) to all of his corporate clients. This should be done at a meeting where there is a retiring and accepting business. At this meeting, the employee informs the client about his future dismissal and represents the manager who will continue to work with the client. This rule and compliance with it greatly facilitated the work of the head of the sales department and prevented the loss of customers in the future.
In most companies, there is a strange practice in which a sales manager conducts all relationships with customers at all stages from the sale to the delivery of the order. This leads to a limited manager’s ability to sell, since his attention after receiving an order is focused on the preparatory and production processes. Therefore, the sales curve of an individual manager grows when he is looking for regular customers, then stops growing when the manager has collected a portfolio of orders and then begins to decline due to the inevitable loss of part of customers. Only after the decline becomes significant, the manager begins to look for new customers. Such “support” of the order by the manager leads to the fact that all his attention goes to “concern” about the customer’s orders and he simply does not have enough to look for new orders.
The solution for this situation is the separation of functions, when the manager, having received the order, transfers it to work, and he himself is engaged in the search for new customers. Of course, the manager will be able to “unclench his fingers” and withdraw his attention from the order only if he has confidence that the employees of the production area are able to take care of the client.
Of course, for this, the work must be really well coordinated, the functions must be precisely distributed, and the interaction coordinated. That is, the organizing scheme should work in the company.
When I first introduced such a system of working with clients, my sales managers said that the client wants to work only with one person who solves all problems, that they will be unhappy that only one employee communicates with them on issues of placing an order, technical issues - another, but the third one is handing over finished products. But experience has shown that customers very quickly agree that one person cannot be competent at all stages of interaction and specialization allows you to get a better result. Of course, in order to organize such a high-quality interaction, we had to reorganize the work, create a full-fledged organizational structure , and coordinate all processes in the enterprise. But without these changes, a modern enterprise simply will not be able to process a large number of orders, since working in the old fashion with increasing number of orders will cause organizational chaos, the burden on managers and the enterprise, and sooner or later development in terms of the number of processed orders will stop.
The main reason for the lack of customer loyalty today is the poor quality of services. I found that manufacturing today is an incredible combination of state-of-the-art technology and old-fashioned management methods. This combination leads to the fact that almost all companies have problems with deadlines and quality problems caused by poor production planning.
How to break this vicious circle? - It is necessary to establish organizational processes so that an order of any size is quickly, with minimal operational costs, processed by the company, and sales managers do not focus on the “support” of the order. This will change the situation with disruptions in production time and improve the quality of service, which will increase customer loyalty.
In order to keep customers in such a tough market, it’s not good to be able to sell, produce a product well and have good equipment. Today it is clear to everyone that not all companies will survive. In my opinion, those who will be well organized in addition to the above will survive and have customer loyalty. Create a system business with us at the School of Business Owners.
