When a sales strategy loses customers

A multimillion-dollar industrial company was losing market share in its core business. One of the main problems was that the field sales team had become too reliant on serving the distribution channel. As a result, the team was too preoccupied with selling specific products and not focused enough on end-customers’ needs. Not only were end-customer relationships deteriorating but also pricing was becoming inconsistent among segments, and the company’s margins were steadily eroding. The company was also offering a confusing mix of products, and the sheer number of SKUs therefore added complexity and cost.

Management realized it had to overhaul the company’s go-to-market approach by rethinking everything, including sales approach, organization and compensation structures, product mix, and product and service assurance offering. The executive team also wanted to find a way of more clearly linking revenue growth to specific product and customer segmentation initiatives. Realizing the need for help, the management turned to AlixPartners.

Overhauling the go-to-market approach drives stronger growth

We began by assembling a team to define market segments for two of the company’s divisions, which had different customer bases. Drawing on our industry expertise, we interviewed key individuals in the divisions and analyzed end-customer data. We researched the most important influences on end customers’ buying behaviors and choices and how those customers’ needs related to the divisions’ most important offerings.

Using our research findings, we recommended new and less-complex product mixes as well as other offerings tailored to specific customer segments. Then we modified the company’s sales approaches such as focusing on selling multiproduct solutions rather than individual products. In addition, our team redesigned the company’s approach to targeting customers and organizing sales by geographic territories. Our goal was to double the number of customer touch points while achieving cost-saving efficiencies within sales processes. To reinforce the new approach, we modified the company’s sales compensation structure, with the goal of driving stronger overall revenue growth and rapid market penetration for new products.

When it really matters

The go-to-market overhaul began delivering results quickly. Both divisions exceeded their revenue-improvement targets for the coming five years earlier than expected: in just two quarters after rolling out the new approach. Meanwhile, the redesigned sales-coverage maps and other changes enabled the company to capture significant savings. Impressed by those outcomes, management asked AlixPartners to lead the launch of the company’s newly reconfigured product portfolio, which is currently under way.