Small manufacturing company commercial building sector:

Sales performance review and marketing strategy development.

The Situation:

This opportunity was referred to TMT via the company’s external accounting partner, to see if ‘something could be done’ to reverse declining sales and revenue position. When international owners purchased the business two years earlier, revenue was approximately two and a half million dollars, the following two years saw revenues fall to just over half a million. The general manager had left the business, his role was assumed by the production manager. It was perceived that a marketing communications plan could generate sales needed to improve performance.

The Goal:

Conduct a high-level business audit with recommendations for a short-term remedial strategy and action plan to generate sales volume and re-gain market presence. It quickly became apparent however, that the business had multiple issues that hampered its ability to function.

The Action:

A business audit identified bottleneck and gaps in the following areas: low staff morale and performance across most functions; a general lack of systems and processes to manage sales, customer and production; from sales leads through to production, planning was cumbersome and ineffective; low sales saw plant and equipment well below capacity and a lack of investment in plant in an increasingly competitive market. A lack of marketing was the least of their issues.

Discussed here is a snapshot of the sales performance and processes.
Businesses working with the resource consent process can endure lengthy periods from sales enquiry to conversion, as was the case for this company. The team’s ability to manage leads was hampered by the lack of any structured sales and lead management process, to the extent that over one million dollars’ worth of back orders sat on-hold in a cardboard box, manyup to six months old. No one was taking responsibility for orders once they were entered to the WIP system. The value of reported potential business didn’t stack up; the order book indicating over one million dollars of business in the pipeline versus declined revenue. Nicky initiated a call-up day, spending a morning with the sales team calling customers to validate whether leads were still current and retained, or should be deleted from the system. The final pipeline figure was less than two thirds of the original pipelne estimate.

Sadly, this exercise highlighted that one of the sales team had been falsifying information on his orders for some time; logging higher value business than actual and creating orders with no contact or job reference.

The most experienced and diligent sales person and a good operator, was spending too much time chasing random business in order to generate sales. His role was redefined to look after key accounts; well known building company brands whose business was consistent but who had been woefully neglected.

The team had defaulted to selling on price and discounting to win orders, the business however, provided a superior quality product, finish and fittings resulting in product, brand and bottom line erosion.

This business had failed to take notice of changes and new competitors in the market. With no clear leadership or direction the entire business was drifting severely and required radical change. With finances stretched, change had to be prioritised and carefully planned. As marketing cannot work in isolation, Nicky’s recommendations included a broader organisational and infrastructure plan; staff assessment and simple restructure with training where necessary; a review of the sales process, lead and customer management and sales performance; review and revision of the IT communication channels from sales to production, to distribution and accounting. The marketing element focused on positioning; lifting the brand and quality proposition, a channel and distribution strategy addressing needs across the client base, from key accounts and large scale projects to one-man bands.

Thinking Outside The Box

An opportunity was identified and explored for this business to participate in an overseas trade expo. With a specialised, quality products the business was ideally suited to this international market plus, preliminary calculations indicated that financially this was a viable initiative. In addition, no competing New Zealand business was attending and the investment to attend was relatively low. The overseas business owners didn’t support the proposition to present its product and explore this market, stating that ‘if you can’t make it in your own country you can’t make it overseas’. An Australian business offering similar but inferior products signed a contract worth over two million dollars for the following 12 months.

Insight:

The business owners who resided overseas and were hands-off in the business did not recognise that New Zealand may simply be too small, opportunities too limited with too many small businesses fighting for the same customers for some companies to thrive here. It takes leadership, courage, investment and commitment to step over the boundary and explore new horizons.

B2B manufacturing building services