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Client: A $15 million manufacturer of OEM control panel components. |
Challenges: The company had hit a 3-year plateau in sales and had hired a new Director of Marketing to get things moving again. The new DM wanted to reorganize the advertising campaigns, sales force and commission structure. However, the company's prospect tracking system was not coordinated with financial systems that tracked sales. Eroding profits meant that the new DM needed solid information for making his decisions – fast!
Solution: Management Analytics Group reviewed the data on both the financial system and the prospect tracking systems. We then helped the company's IT department link the two together so they were synchronized. Next Management Analytics Group did a simple RFM segmentation analysis to classify customers according to their actual purchasing behavior. We also did a simple analysis of revenue potential for the proposed sales regions.
Result #1: Management Analytics Group discovered that half of the company's customers had no sales! Upon investigating, we found that samples sent to a prospective customer were tracked as a zero-dollar sales to an active customer. This seriously distorted sales reports and the company's understanding of the size and locations of their customer base. MAG's discovery let the company revised their sales quotas and territory boundaries to be more realistic. This reduced turnover among the sales staff and made financial projections much more useful.
Result #2: Management Analytics Group discovered that the sales team's ratings of who was a potentially valuable customer was not correlated to the actual sales to the customer. This discovery allowed the company to adjust sales commissions and incentives to focus efforts upon those customers who were actually profitable to the company. Sales and profits began to take off immediately.
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