Develop strategic thinkers

Volume 14 Letter 5

In today’s landscape where customers are becoming more sophisticated and brands have proliferated, the battlefield in many markets has now moved to the point of distribution. To win in this ecosystem requires a high level of business and market intelligence at the regional and territorial level. This unprecedented environment calls for a new way of thinking and working. To anticipate future needs and seize business opportunities, regional managers will need a comprehensive knowledge of their markets and develop a more strategic mindset. Forward thinking organizations are empowering their field by authorizing frontline managers to make decisions that directly affect the customer experience. Here’s how it worked at kitchen and bathroom fixture maker, Grohe 2.

For a company that had a clear competitive advantage in innovative design, dependability, ease of installation and some degree of snob appeal the fact that sales were in a steady free fall was somewhat baffling. The products were good – superior in fact – something was amiss at the customer interface. To turn this trend around Grohe execs set three priorities:

  • Get accurate insights into the customer experience so frontline marketing and sales people could intervene to boost sales
  • Develop measures to determine if the new approaches were working
  • Develop a feedback system that would promote learning at the regional level

Grohe performed a quick survey and sales reps were given the authority to dig further. They learned that there were potentially three places of disconnect – the distributors, the contractors who install the fixtures and the homeowners. Localized programs were developed to address each group’s needs.

To address the contractors, sales reps created workshop sessions held in distributor’s showrooms to teach contractors how easy the products were to install and how Grohe fixtures could ultimately save time and headaches. For the homeowners, the marketing teams created new showroom displays to highlight the decorative features and “snob appeal” of owning Grohe fixtures. Finally, for high volume distributors, extra sales support was offered to train up their staff on the benefits of owning Grohe fixtures – focusing mainly their dependability.

As customer data becomes more prolific it is imperative to develop managers who can both interpret it and integrate it with a holistic understanding of the customer’s needs so they can develop localized strategies to address those needs. Grohe saw sales jump 20% by the end of the first year. What can we learn from Grohe:

  • Having superior products is not good enough if the value is not communicated
  • Value has different meaning to different customer groups: Contractors – valued ease of installation; Homeowners – it was style and snob appeal; Distributors- dependability which meant happy and repeat customers
  • Develop strategic thinkers in the field who can spot market trends and seize market opportunities: sales people pinpointed where the value message was missing and developed regional programs to address the shortfalls

To paraphrase the Colonel of the military academy; ‘Investments in technology only makes sense if our managers are free to make decisions that senior leaders would have made in the past’. Make it part of your strategy to train your people. Teach them how to develop and execute regional strategies that feed into the core corporate goals and watch your business grow.

1. Why “Leadership” Isn’t Just for Leaders Anymore, Strategy and Business online magazine author Sally Helgesen

2. Closing the customer feedback loop R Markey, F Reichheld, A Dullweber HBR Dec 2009

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