What is Sales Transformation?

Host – Armaan Khendry:

This is Business and Beyond, by Grant Thornton Bharat

On this podcast, we deconstruct the complexities of Modern Day Business, and walk through tangible solutions for business transformation.

And to do this, we speak to leading experts and consultants.

And on today’s episode, we're going to be diving deep into sales transformation.

How to know when it’s time to revamp your internal sales processes, and how exactly to do so by improving 3 key areas: People, Processes and Technology.

Joining us for this conversation is Vicky Bahl, who’s a partner and sales transformation leader here at Grant Thornton Bharat.

And we started the conversation by defining Sales Transformation.

Vicky Bahl: So, sales transformation is accumulation of all the initiatives that potentially would drive a sustainable revenue growth in the longer term, creating shareholder value for a particular company that sells products or services.

Armaan Khendry: Could you just expand a little bit about the components within sales transformation? What are the areas that when folks are approaching this sort of transformation within their organizations that they need to keep in mind at a high level

Vicky: So, according to the methodology that we use for our clients, in India. sales transformation typically starts with understanding how mature is the sales organization today, for the overall, sales function, if I talk about the processes, if I talk about the technology that they use, if I talk about the people skills that they have. So, it always starts by understanding on a scale of, let's say, one to 10 to make things easy, where do you stand on each of these parameters, and that's how we understand the maturity. And, very few organizations are the ones who will be, you know, doing really well on all of these. And according to me, t's like a machine. If you are failing on one of these, then, the others will obviously become less efficient.

just to give you an example, if you have a great person who is a great salesman, he is going out in the market and still using an order book to write down an order and then clicking a picture and sending a WhatsApp of that order to his HQ. And then you know, they are putting that order in an Excel sheet. I have seen that happening in clients, maybe seven, eight years back, you know. So, that's a very inefficient way to use this great guy who could have actually covered more retail touch points in a particular given day. that's how we look at people. And that's how we look at the technology that those people are using. Then, combining people and technology, we need to understand; how we are setting the targets, how we are reviewing the targets, how often do we review? Do we review them virtually, does everyone need to fly in? These small nuances are also actually very important.  you know, we live in a virtual world today, but sales in a typical distribution business actually happens on the ground.

So, people are used to you know, flying in for a monthly sales meeting in the headquarter. They sit together, and, and they understand what went right and what went wrong. we are making it more agile for our clients these days. So, we are setting up new kinds of reviews, which are more technology driven, and actually can be done daily. Because if a red flag was raised on first of January, I can't wait till 30th of January to actually sit in a in-person meeting in the head quarter to understand that red flag, so basically, , people, technology, review mechanism, then comes the sales channels, you know, how does the product reach from the factory gate to the consumers , hand or if it's a service, it reaches the consumers’ mind. How does that whole process flow? And that's where the external reviews come in, channel is not always owned by the organization, although we work with organizations that have a complete control on the channel also.

However, if I talk about a typical organization, they have multiple channels and we have to review their dealers, retailers, distributors, carrying and forwarding agents, ecommerce websites, and direct-to-customer websites of their own and understand how are they performing on each of them. And where is it that the goods are getting stuck. So, when I say where are the goods getting stuck, if you visualize sales as you know, from the factory gate, you're putting your products in a pipe and the pipe actually opens up in a customer's home where the product actually is used.

It might be stuck at the warehouse in the factory, then it might be stuck if you don't have the right logistics partners. Then, there's a lot of inventory stuck at the distributor. And then there is inventory at the retailer. How do we make this flow absolutely smooth, with minimum working capital deployment, obviously, leading to highest ROI for the distribution partners? That's how we look at channel. So, that's also a very key thing. And then of course, sales cannot be complete without marketing. So, we have to look at how important is marketing for that particular product, you know. Some products like fertilizers, when I work with companies, in good times, the demand is actually more than supply. So, so, you really don't need to market them. But if you become complacent in those times, when the time comes to market, then, people won't have a brand recall.

So, how relevant is your marketing to the end consumer? How good are the channels for those marketing? Are you sponsoring an IPL team? Do you really need to do that? I have a client for example, which has major, customers as people who stay in villages, are farmers, So, the best way to market their products is to actually not sponsor an IPL team, but to sponsor an Indian Kabaddi league team, because that's what those customers actually watch. And they could relate to it better and that's going well with the product And, we look at some softer nuances on how to do BTL marketing, how to do ATL marketing? And what is your marketing strategy overall? And how aligned is it with the entire organization. So, these are the top buckets where we do the diagnostic, we understand the maturity. And then wherever we feel that specific interventions give the highest upside for the client in the short, medium and long term, we take those points up for implementation. And that's how we run a typical sales transformation engagement.

Armaan Khendry: thank you, that was super helpful. I think, a question that will pop up in listeners minds, especially as sales leaders within different industries that you were speaking about. When everything is going business as usual. And sales are continuing to either grow at a slow rate or, or keeping at pace, it can be difficult at times for leaders to understand that, hey, it's time to actually make this transformation. Vicki, could you just expand a little bit about how leaders in these organizations can know when it's the appropriate time to actually take up this transformation and what are some of the triggers they should be looking for within their organizations to realize that it's time to make this approach?

Vicky: so, when sales are falling, of course, the first thing that comes to mind is, something is wrong. I don't think people should wait for that to happen, but they should have more leading indicators towards that, that this might happen. So, I think falling sales, stagnant sales, you know, sales from traditional products in the portfolio falling dramatically and the new products in the portfolio not picking up pace in the market and being at lower market share. So, specifically for companies in clothing, footwear and fashion-oriented products, this is very important because you cannot sell the same white shirt forever, right? you have to keep innovating. So, how much is the product portfolio mix shifting, how much is the contribution from new products, old products.

So, overall sales, low or stagnant, relevance of products, relevance of product portfolio, customer inputs from the market, I think if people are not capturing them on a regular basis, feedback, how's it coming? Are people actually calling to tell you that there is something wrong?  do you have loyalty in the market? How much repeat customer base do you have? If, if that's low or negligible or falling, that’s another indicator that you should look at this. And most importantly, I would also put across the, these are very obvious indicators. If someone is monitoring these KPIs, it will all show up as red. And they will say, Okay fine, it's obvious that we need a sales intervention. However, competition, once it starts taking away your market share in, in your core competency areas, let's say you are a North India focused player in a particular product segment, and you are always dominated with let's say 25% market share. And now you see three south and west Indian competitors who is really, really taking up a lot of share, suddenly, you know from zero percent, they together contribute to let’s say 20%, you can see how this trend will go and you need to map those trends. And you know, safeguard yourself from a potential loss of market share also.

So, I think monitoring competition is also becoming extremely important to understand where am I headed, and how am I not being relevant enough for my customer. All these factors put together should become enough of triggers for companies to look at sales transformation, as an ongoing , process. I, I have started believing lately that one should never have a sales transformation done once in five years, or once in 10 years, because you should not wait for the engine to completely stop working and then do an engine overhaul. You need to oil the engine on a regular basis. That's how your car will have a long, long life and a long value, right delivered to your shareholders.

Armaan Khendry: Let's dive into your last point there where you spoke about a root cause analysis. So, let's say a sales leader we've just discussed has figured out that there is the need for the sales transformation based on the triggers and end components we just spoke about. The first thing they would then do is, is go further into a root cause analysis, why are these issues happening? In your experience working with several different customers at doing this analysis, how do you suggest teams go about approaching this because there must be mountains of data and several different people they have to go through to make sure that they can get this done efficiently and effectively?

Vicky: So how we typically approach it is the following. we put all the thrust on beating everyone in the ecosystem. What clients typically fail to do is that they fail to correlate the feedback of their supply chain team, of their customer management team, of their sales team, account managers, dealers, distributor, retailer, and most importantly, the end customer. we have to join those dots. if we speak to one of these, people in isolation of others, we will only get maybe one or two insights. And we'll then target those and do an improvement exercise on those. But the other factors remain ignored. And those factors if they're identified six months down the line or three months down the line, and then we work on those. And similarly, the whole process keeps happening, right.

So, the feedback of all these people in this chain from the factory gate to the end customer needs to be taken at one point of time together in a very cohesive manner. And then we marry it with their data. And we will be able to, if not 100%, but 80% , be able to pinpoint the problem, and then start taking steps towards solving it.

Armaan Khendry: So, expanding off of what you're just saying, Vicky, I think there could be the point that internally when reviewing your own problems, there would be some biases that are difficult to overlook since you're so involved in the day-to-day operations of your business. How do you feel businesses should go about ensuring that these biases don't occur? And do you feel that’s where the help and need for an external agency really does help out?

Vicky: Absolutely. And I think, that's why some of , our clients now have a specific budget for consultants to come in and tell them where the problem areas actually are because when you are engaged in a system that has been working in a particular manner, for let's say, a couple of decades, and all the sales leaders have grown up the ranks from being a sales officer in some , small town in the country, and then the area sales manager. Then, they became the state head and then they became regional head, and then they became national sales head. And it's, it’s typically a 20-year journey, right. So once they have understood how the system actually works, it becomes very close to their heart to reshuffle and recheck any part of the system. They always try to believe that we need to make this system better. They are unable to think outside the system. And there is pandemic happening, you know, there is a war happening. There are supply chain issues.

This will have a systemic impact on even the sales processes of, an XYZ company that's headquartered in New Delhi, India. You cannot ignore. for example, a client cannot ignore the smartphone penetration that has happened in the lowest strata of the society in India, because their kids had to attend online school classes. And that strata if that's the customer who used to buy a product from a retailer, and now he had to buy that smartphone, he's been pushed more and more apps where he is browsing those products, and he's trying to understand that, you know, these products are cheap to buy, even if I buy from here, and it's cash on delivery, so there's no risk. So, the bias of thinking that, you know, this is the only way my product is always sold, because the kind of customers we deal with are of that particular strata of society, and they will always go to a retailer, needs to have a third person's view to break the bias, and we have to go there, have a specific intervention and tell them, you know, here is our talk with 200 of your customers. And these customers are not very savvy with online surveys.

So, we actually go, have focus group discussions, who are your specific customers and then you need to change your gears and you need to think of new channels, new marketing channels, new sales channels, and new ways of delivering your products to this customer set. So, I think openness towards ideas and openness towards a changing world order is very, very important to successfully have a sales engagement, and we always do a pilot. We should never have a sales transformation exercise that does not have a two-month pilot in between, where we always say that, you know, we will do it, then we will course correct. And there has to be a course correction. We cannot be 100% right basis data research analysis. And, those pilots actually drive that confidence in clients, and then is when we take up the full-blown implementation.

Armaan Khendry: I think that that really helps understand the importance of an outside perspective. I just want to ask you about the important role that technology plays in enhancing team’s abilities to scale. If you could just speak about the role of technology in sales and how leaders should look at implementing technology within their sales architecture.

Vicky: So, technology is way of working these days. Our clients understand it and some have taken baby steps and some have taken leaps in, in technology. there are a different end of spectrum and more the service orientation of a client, the more technology is being used in the sales process. And the more is the orientation towards a traditional product, which is sold through a mom-and-pop store, the more is just the baby steps towards technology. But, if I go back to the Pipe example that I took, if you visualize the whole sales process of the Pipe from the factory gate to the customer's house. , technology actually makes sure that the Pipe is oiled as much as possible. Just to give you an example. a dealer management system.

I have clients who just struggle with the dealer's ordering products, always wanting those products, which are not available with them solved through technology intervention of sales and operations planning, right? If I have a great sales and operations planning and if I have great forecasting, They over a period of time have such an intelligent algorithm-based forecasting and demand planning , solution in house that the dealers can very well go to their dealer management system. They have a visual representation of all the inventory, and they can just put in an order. There is no person who needs to visit them. And, most of the times, 90% of the things that they require for a particular season, in their particular area to supply to their retailers is available on time in full. That's how we define OTIF, which is On-Time In-Full.

So, that's a technology intervention to minimize lost sales because if a dealer wanted 10 products, and he ordered those 10, and you actually had only seven of those, so three are lost sales. And if I minimize it to one, then, ultimately, an operational improvement initiative is resulting in increased sales. The second example is, how is your sales team actually monitored on the ground, are there routes in which they have to travel every day. Are they optimized basis Google Maps, are they optimized basis traffic conditions, are they optimized basis which retailer is open and which is not? There are a lot of times where, at an aggregate level, if you have 100 salespeople on the road, who are traveling retailer to retailer, and everyone finds, let's say one out of 10 shops they had to visit is actually shut down for a particular reason. 100 people x one shop each multiplied by at least you know 60 minutes of travel time, broadly. Just imagine the amount of time you can actually save through technology. And that can be used in cracking another deal with another retailer. And this guy who's close today can be optimized as a part of some other route.

So, that's called Beat planning, which can be automated. The order taking can be automated. So, there are a lot of field force, sales software that are available, which automates all of these things. So, all of those interventions in the sales team can help people be more efficient, be more confident and achieve their targets most importantly. People are promised great incentives but these guys are not achieving their incentives, because they're not able to go to those number of retailers, avoid traffic, share best practices, and deliver what the retailer is actually wanting them to deliver, because they're not doing a sales and operations planning, right.

And then the more difficult, you know, uphill battle will start to optimize, optimize, optimize to take it to 100% optimized system, which is obviously, 18-to-36-month exercise for any decent-sized client.

Armaan Khendry: Vicky, that's a great place for us to wrap up. Thank you so much for taking the time to come on the podcast.

Vicky: Thank you.

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