Investment in Coaching Pays Big Dividends in Cultivating Target Market.
The major source of BLM Technology’s 25 percent revenue growth was its largest customer, a super regional banking organization. With the industry giant accounting for approximately 30 percent of the company’s business, President Ron Meinhardt realized that the situation posed a potential threat to BLM’s stability. He knew that BLM had to create a sustainable growth pattern to help it guard against the company’s resources being consumed by its primary revenue source.
Eliminate the company’s dependence on its largest customer for revenue growth by expanding the customer base.
Define the target market, engage Sales Growth Specialists to help develop selling milestones that proactively position the company as a strategic solution, and outsource an ongoing coaching program.
- Service revenues grow 30% and hardware margins 40% during the first year.
- Close rate improves by 25% due to more effective management of a higher quality pipeline.
- Greater discipline, knowledge, and skills enable salespeople to leverage market upswings and opportunities.
For almost 30 years, BLM Technology has been a single-source provider of information technology products and services (through predecessor companies) to corporate and government entities nationwide. In addition to offering over 140,000 hardware products from more than 900 leading manufacturers, the company provides branch automation software, onsite and depot repair, network design, configuration and upgrade services, IT project staffing, installs and other projects, cabling, and equipment disposition.
As a certified service provider for major manufacturers including IBM, Compaq, HP, Dell, Lexmark, Epson, Okidata, BLM Technologies offers flexible, customized service programs, including service plans of various length and various levels of response (including Priority Service within two hours), non-contract services such as traditional time and materials and blocks of time, and warranty enhancements that upgrade and/or extend standard manufacturers’ warranties. BLM’s toll-free help desk tracks problems, provides application support and diagnostics, and dispatches support both on and off-site.
By 2004, BLM had expanded to 15 states and, in conjunction with partnerships, provided services to its customers in all 50 states and Canada. Two-thirds of the company’s revenues were from professional services, one-third from hardware.
Developing a Focused Growth Strategy
By most measurements, BLM was a successful company that prided itself on providing technical innovation and excellent implementation, service and support that maximized value for a broad customer base. However, after leading the company for 3 1/2 years and despite 25 percent growth, President Ron Meinhardt realized that BLM’s customer base was not big enough. Its largest customer accounted for nearly 30 percent of BLM’s revenues.
Meinhardt viewed this situation coupled with the lack of a defined growth strategy as a harbinger for disaster. “This simply was not a sustainable growth pattern. If we continued to rely on one account to generate double-digit growth year after year, there is no doubt we would fail.”
So the company embarked on a campaign to narrow its focus and clearly define its target market. It chose the financial services industry because of its high service requirements.
“We wanted to play in a market where we could add value. Our infra-structure and sophisticated processes were ideal for the financial services industry, which relies on IT heavily,” Meinhardt explains. “We had solid experience in the financial services market and a strong customer reference base. Also, the market factors, at least in the near future, offered a formidable opportunity, with the consolidation of mid-size, regional banking organizations, the expansion of small, community banks, and changes resulting from the recently enacted Check 21 legislation.”
Assessing to Identify Gaps
With a well-defined target market at the center of a growth plan, Meinhardt sought the assistance of Sales Growth Specialists to help him implement his plan. “Danita’s disciplined approach was just what we needed to help our sales organization stay the course,” he says.
According to Danita Bye, Sales Growth Specialists principal, this change in course, a single focus on the financial services industry, required a concentrated program dedicated to integrating the company’s new growth objectives within the sales organization. “First, we needed to understand ‘the hand we had been dealt,’” Bye explains. “An objective assessment helped us uncover sales management and sales force beliefs that were sabotaging BLM’s sales effort. From there, we determined what knowledge gaps needed closing to help the sales people attain best-practice results and conduct a two-day training session to address them.”
Coaching for Effective Pipeline Management
But it was what followed training – ongoing coaching and reinforcement – that continues to make the difference. The weekly, one-hour tele-coaching session each Tuesday at 3 p.m. has created a disciplined, accountability-based culture with its own language in which sales productivity has improved.
“Our sales people value this opportunity so much that they literally sell it to new hires and skeptics,” says Meinhardt. “And if a sales person can’t build this hour into his or her schedule, that itself speaks to a lack of discipline.”
Each week the coach introduces a concept that reinforces the disciplined sales process. For instance, ‘Go for No’ is a technique that helps the sales person manage their pipeline more efficiently. It actually helps qualify prospects and determine their interest more quickly, eliminating wasted time.
Meinhardt believes that outsourcing the company’s ongoing sales coaching has been much more effective than simply sending sales people off to seminars. “The tools, the messages, the issues that we’re addressing are customized to create and reinforce the sales culture we want for fulfilling our growth strategy.”
Meinhardt is also convinced that BLM’s pipeline has never looked better as a result of its commitment to coaching. “A much more disciplined and focused approach has the sales people spending less time on deals that have a low probability of closing. We’ve got more deals in our target market pipeline that appear to have an exceptionally strong chance of closing, including numerous proposals in which we’re partnering with manufacturers in top-level presentations for deals involving over 1,000 printers.”
Accountability: The Next Step
In tandem with improvements in pipeline management, a cultural evolution characterized by accountability has occurred within the sales organization a natural result of the coaching techniques Bye taps into. “Sales people quickly adopt the language we use in our sessions and commonly refer to these idioms in conversation with their colleagues, a phenomenon that continues to reinforce the concepts,” she says.
Meinhardt is pleased with the results. “Our largest customer continues to generate the same share of our annual revenue, and that’s a win considering the rate at which this customer has grown. In just one year, the greater discipline, knowledge, and skills of our salespeople have expanded our customer base with accounts that are also growing.”
Bye and Meinhardt agree that the next step is continuing to strengthen pipeline predictability by introducing the monthly ‘Go to the Board’ (GTB) meeting. In addition to improving the salespeople’s ability to forecast revenue, GTB meeting goals are:
- Motivate each sales person to achieve the company’s baseline and their own personal brass ring performance
- Maximize each sales person’s opportunities to achieve their personal financial goals
- Tracking metrics – activities, time frames, etc. – that comprise sales productivity.
“Metrics will tell us where to place our coaching efforts for the best ROI,” explains Bye. “And ROI is what it’s all about,” Meinhardt says with a nod.