Are you prepared to grow?

14.05.2018

The Battlefield concept helps you to increase your sales with your most attractive opportunities

As head of sales for several stock listed companies in different process industries, I have noticed a lack of market knowledge detailed enough to make good growth plans in many sales organisations. 

Companies generally know their global market share as they have global production data from some sort of industry associations but they are rarely able to split this into different geographical sales areas and customer segments.

Is customer segmentation relevant?

I believe it is. A product or service will create different value for different customers. The value created affects the price the customers are willing to pay. 

A transport company that buys a light weight trailer made of high strength steel will be able to increase their revenues as they will be able to carry more goods at the same cost. 

The same steel can be used for a bridge structure. In this case it contributes to a one-off cost saving. This is also valuable but the benefits for the transport company are far greater. 

Logically the transport company should be ready to pay more for the same steel than the bridge builder. 

A good customer segmentation will support value based pricing and has a good potential to improve the profits for a company that has a value creation offering. 

How well does your company know the market

We will now take a look at four companies with different knowledge level about their market share. Open your latest strategy document, check what kind of market data you presented there and compare yourself to the different cases below.

The internally focused company

The internally focused company has a good view of their global market share but they are not able to split it over their geographical sales areas or their customer segments. They know of course their own sales in every market but they have not estimated the total market in the different sales areas or over the different segments.

They will present their market position as global market share but are then limited to a split of their own sales over the different sales areas and segments. This gives no indication about their market share per sales area or per segment. This is not sufficient for making good growth plans and give good direction to the sales representatives.

The geographically focused company

This company has an understanding of how the total market is split up in their geographical sales areas and they are able to determine their market share in each and everyone of them. This is important to dedicate the sales and marketing resources to the right markets but it gives no direction when it comes to customer segment focus.  

The segment focused company

Some customer oriented companies have been able to split their market in different customer segments which is particularly useful if they are focusing on value creation. Understanding your customer’s business and how his market develops will enable you develop the right products and services and tailor your marketing campaigns to your different customer segments. It is difficult to determine the market size per segment as all companies will have different definitions of their segments. 

 

The Battlefield company

The Battlefield company understands their market share in all customer segments in each sales area which helps them to find opportunities that they did not know existed before. The Battlefield case study describes a case where a company has been able to offset a decline in one segment by increasing the focus on another segment where there were big opportunities for growth identified with the Battlefield map.

This requires a structured model to collect the data in a homogenous way across all the sales areas. By adding the potential growth of all markets and the relative profitability of the sales in each segment and sales area they are able to prioritise their growth actions to the most attractive segments in each market. The growth can either come from increased market share or from building the market. Increased market share usually requires more sales and marketing resources while building the market will need more technical support and training in value creation sales of the sales representatives.

Which of these companies are you?

Please share your experiences with us.

And more importantly, which company do you want to become?

In the companies where I have made Battlefield studies over the last 15 years we have been able to identify completely new growth opportunities and direct our resources in a better way to the markets that have the best potential for profitable growth.

At 3S we have developed a process for helping companies to improve their understanding of their market based on the Battlefield tool and make concrete action plans for growth. We are working with the RACE process to ensure a good implementation of the plans by coaching the sales managers to drive and develop their sales representatives in line with the company’s strategy. The RACE process focuses on all the necessary components for ensuring good sales management – Results, Actions, Competence and Capability and Engagement.

If you are interested to learn more about the Battlefield concept please contact lasse.johansson@3s.se.

You can also order a more extensive whitepaper on the Battlefield concept here, http://3s.se/en/battlefield-whitepaper-order-page/.

Lasse Johansson

Lasse Johansson is working as a Senior Sales Consultant and has a background as General Manager and Commercial Director in big, multi-national stock listed companies in the process industry. He has extensive experience from working with a wide range of customer segments such as Automotive, Mining, Construction equipment, Pulp and paper, Oil and gas, Liquid packaging and Consumer goods packaging.