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The newly appointed Sales Director of a copier manufacturing company was surprised at the resistance of the sales personnel to improve sales productivity. They argued that committing to a sales target and achieving it called for nothing short of magic. The Sales Director wanted to prove that substantially higher results could be achieved by adopting a more scientific approach to their work.
Data points
He started off by asking them to undertake a census of ‘Machines in Field (MIF)' walking floor by floor, building by building and street by street. The inventory of MIF of all makes, including their own, was classified into a table using the two coordinates of X-axis: Residual life of machines measured by total number of copies they may have churned out to date and Y-axis: Vintage of machines (in years) based on their date of installation.
The MIF was further classified into six zones depending on vintage.
Green: Most customers prefer to change their machines if they have done the initial rated design life of 100,000 copies.
Yellow: If they are 2 years old and have done 1,25, 000 copies, they may not be very reliable or produce poor copy quality.
Blue: Nearly 64 per cent of the sample belonged to this category which was considered the most likely to look for a conversion. Not only would the machines have been depreciated fully, they would in addition be technically obsolete, demanding maintenance and produce poor copy quality.
Amber: Another 12 per cent was in its most advanced stage of extinction. Aesthetically and technologically they were out of date.
Black: These are machines that have neared the end of their service life and deserved to be pensioned off.
White: Sheer junk that needed to be auctioned off as scrap.
How the data connect
The sales team were trained to focus on converting the machines targeted in each zone with four uniquely tailor-made options.
Trade in: Replace the old with a newer model
Technical upgradation: Convert a plain paper copier into a colour copier or a multi function 5-in-1 unit
Refurbishment: Clean up, cannibalise and reconfigure it with the latest software or
Offer to buy out the obsolete or malfunctioning equipment as a dead asset and elect to run their copy centre like an in-house facility but managed by the copier company with its own staff. With a MIF of a million machines, it was possible to assess the probability of winning each zone, improving the accuracy of sales forecast.
Question for the Directors
For many that still believed selling to be an art, the statistical model and its predictable strike rates were too embarrassing to ignore!
>http://number-sense.blogspot.com
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