NB. In segment 1 (large Banks and BS) 6 distributors accounted for 37% of ROCE (return on capital employed) and required 30% of distribution costs. Whereas in segment 2 (smaller Banks and BS) 40 distributors accounted for 32% of ROCE and required 39% of distribution costs. The challenge was to balance the business support in relation to the value created.
Our recommendation was to re-organise the Sales & Marketing services, support and structure in proportion to the value derived from each customer group (the existing processes and structure bore little relation to customer value, but rather to historical precendent).
The key points were:-
Segment distribution to match the market segment
Tier the service offering to match the contribution to profits
Segment the service offering to match the importance of the relationship
We set up a series of customer change teams to:-
Develop service levels and accompanying operational processes by customer group
Design a supporting structure for the operational processes. Specify the capability needs for each team. Manage the recruitment of managers and staff into the newly designed teams.
Develop and deliver the internal communications to the business
Develop and deliver the external communications to customers and stakeholders
The key customer change programme has the following benefits:
Sales and marketing processes re-aligned to match the value derived from each customer grouping
Organisation re-designed round the key customers
Headcount reduced from 1350 to 870
Regional offices reduced from 40 to 19
Overall budget reduced by 25%
Move from a sales focused culture to a profit focused culture