Profitable Growth Strategy: Client Examples
This privately-held $65 million dollar designer and manufacturer of handbags, luggage and accessories wanted to revive its slowing sales growth. Its founders and the executive team needed help with strategic planning. The lack of alignment among the shareholder group in terms of risk and reward trade-offs, combined with too many alternatives being considered had resulted in a lack of action.
Keystone worked with shareholders and the management team to develop medium and long term goals. Working closely with the ownership team, Keystone developed a five year growth plan, together with the tactical plans required to achieve the growth objectives:
Identified significant growth opportunities by market, product, and channel segment.
Developed new territory plans to take advantage of geographic expansion opportunities, as well as re-size the existing sales force to achieve target penetration.
Evaluated sales force capabilities and developed sales force management and training tools.
Designed new sales force compensation program aligned with the Company’s strategic plan.
Expanded use of merchandising and improved mix of stores.
Implemented Sales & Operations Planning (S&OP) process.
Developed and implement New Product Development (NPD) process.
Developed revised executive and management incentive compensation plan.
Top Line Growth: The Company hit its five year targeted sales goals by the end of the third year and continues to experience rapid, profitable growth.
Profitability: Throughout this fast paced growth period, the Company has been able to maintain its historically high gross margin and operating income levels.
Sustainability: The Company has successfully transformed some of its critical business processes (and management philosophy) to support its high growth, including its New Product Introduction and Sales & Operations Planning capabilities.
"The last several months with Keystone have given our entire organization a sense of direction that no other consulting group has been able to provide us.”
- Client COO
Key Account Management
This $350 million manufacturer and distributor of PVC pipe and electrical fittings sells its products through two distinct channels including electrical, telecom and utility distributors as well as to the home improvement "big box" retailers. Most of its sales efforts are conducted through a combination of in-house regional sales managers and third party sales representatives.
Keystone conducted a diagnostic of the business and concluded that management had done a good job of managing the business in what was a high volume, cut throat market environment.
Although Keystone was able to identify several operational improvement opportunities, none offered as much potential as the opportunity for this market leader to better leverage and penetrate its installed base of customers.
The highly concentrated customer base was underserved and all accounts were treated the same regardless of their past, current and potential value to the company.
Keystone recommended that a Key Account Management (KAM) strategy be developed and implemented.
Working with the business unit leadership team, Keystone helped define the KAM function, including its parameters and staffing requirements, and recommended an appropriate organizational structure.
Keystone hit the road with Sales Management and obtained buy-in from four critical "Pilot Key Accounts" to test the KAM strategy. Keystone coordinated the development of account specific contact plans, established key performance indicators and assisted the company in defining share growth plans for each Key Account.
The customer service function and pricing team were reorganized into dedicated, centralized teams to better serve the needs of the company's Key Accounts.
The business now services its Key Accounts through a dedicated KAM team, while at the same time leveraging its broad field presence consisting of regional managers and field representatives.
The first quarter of activity resulted in sales growth of 24% for Key Accounts; double that of the rest of the customer base, which grew at a 12% rate during the same period.
During this period of strong sales growth, and despite continuing pressure on pipe pricing, margins grew 4.2% as a result of improved product mix sold into these Key Accounts.
Feedback from Key Accounts was excellent, with scorecard results improving for the company on both financial and service related metrics being tracked by the Key Accounts.
"[Keystone] accelerated our change process to a pace that could not have been achieved without Keystone given our day-to-day functional responsibilities. The experience developed into a professional and personal friendship that I trust will continue to be mutually beneficial for years to come."
- National Sales Director