Falling into Long-Term Decline Due to Offshoring

Situation

A 30-year-old, privately held business had fallen into long-term decline and lost money for two years. As a manufacturer of tooling for metal fabricators to produce uniquely shaped parts, it was suffering the same industry decline as more than one third of similar U.S. manufacturers had gone out of business in the last10 years. The business owner had made several changes in sales leadership — and appointed himself as sales manager — with no change in long-term sales revenue.

Challenges

• An analysis of customer history over the past five years showed 15% of customers generated 78% of revenue.
• Sales reps had lost confidence in the company and provided little support of company customer service and engineering teams.
• Ongoing sales efforts had diminished to answering the phone or fax.
• No new technology or tooling applications had been introduced by the company for many years.

Solution

Platinum Group was engaged to develop a sales growth plan that would reverse this gradual decline. With the owner’s support, Platinum became a virtual sales team leader after an initial assessment of current and future market situation. Top-selling products were identified, gross margins evaluated, and a priority list of key accounts and highest margin-producing products were given to all sales, customer service and engineering staff, as well as independent sales reps.

Specific strategies to win back confidence and create a team approach included a new tracking system for quotes above a certain size to follow up with phone, email and personal visits. An e-letter targeted to reps and customers provided application photos, installation, set up and changeover information showing the speed and flexibility of specialized tooling. Years of in-depth engineering experience for custom-manufacturing applications were recorded in photos, videos and case studies. These are now part of a customized 30- to 90-minute presentation offered to customers and shown at trade shows. An annual activity calendar with expense budgets for all sales, trade show, key customer visits, industry advertising, and e-letter release dates was developed with input from all sales, customer service and engineering people. A Hispanic market sales plan was developed and implemented by a bilingual sales person via phone, internet contacts and quotes. Each week the sales, customer service and engineering teams meet for a one-hour sales meeting that takes place via teleconference from four U.S. locations.

Results

Even after reducing the total staffing by five people — and the owner relinquishing his sales manager role — sales revenues are up for the early months of 2008. Regularly scheduled sales calls in the market and good quoting follow-through by sales and customer service have developed into a slight revenue growth outlook for a high service, custom-application tooling business in the face of continued global competition.