Hewlett Packard CSO Selling to Enterprise Customers

Submitted by ( Group 5) :
Ravi Shankar(148) Nihar Ranjan Barik(111) Naresh Swarnkar (107) Muskan Soni(105) Raveesh Gupta (145) Rahul Warathe (137) Ramya Taninki (144) Mayur Nar(94) Mukesh Kumar2 (102) Sagar S Gaikwad (161)

HP : Business Sectors

HPHP -CSO : An overview

Division that Manufactured computers peripherals as well as application software Focus on superior Technology ensured that HP positioned itself price/performance market leader in 1980s and 90s.

A well trained sales force covered major accounts and small Business alike .

3 Categories of Customers at CSO

Large or Enterprise Customers
Budget : 0.5 to 200 million dollars

Small to medium size business customers

Budget : up to Quarter million dollars

Individual Customers
Retail customers with smaller budgets

HP sales Rep Served them directly

Combination of Sales Reps and channel Partners

Indirect through channel partners only

The 20/80 Rule :

Top 5 % of customers contributed more than 40% of business y But took more than 65% of productive time of CSOs sales force. y Management focus : 1) Aim to manage top 40-50 customers relations properly . 2) Minimize customer management costs 3) Prevent enterprise customers from switching vendors for lower prices
y

Division of sales force

RED
Financial services

GREEN
Channel partners that sold to small customers

BLUE
Telesales

Federal govt. and discrete manufacturing sector

Telecommunication media and utilities

Earlier served directly By HP

Geographically organised accounts

Resentment : a) Sales people losing power in their original fiefdoms b) Small customers earlier got service of HP people, now relegated to channel partners

Order takers to consultants

a) Sales force to be more Proactive
o Sales force to act as consultants rather than mere order takers waiting for RFP o This required Salesperson training , Diaz drafted action plan for the same

b) Sales and Productivity Analysis

o Resulted in sales person being relieved of unproductive tasks o These measures resulted in increase of direct customer contact time from 30% to 50%

Planning for the Next BIG PUSH PUSH

y

Sales cost per order also called field selling costs were as high as 30 cents to every dollar earned in 1990 s needed to be brought down to 10% Leap Consulting Inc , a sales performance research and consulting firm hired to conduct a sales process audit

Types of Projects
80% (Mostly Infrastructure)
Repurchase
Right Features Right Price Right Delivery Good customer relationship

20% (Mostly Opportunistic)

Innovation
Customers with no defined need Sponsored by a business unit manager A different Sales approach

Replacement
Customers willing to substitute HP for other vendors

Expansion
Customers who are ready to involve HP for their new requirements

Findings of the Audit process

Large Customers: Sales Process Audit
Higher work pressures and Stress levels of Sales reps Managements initiatives :
 Hiring technical consultants for Value-Add solutions and salessupport  Reengineering of the Order-Entry system  Review of compensation policies

Sales Team had gained Customers trust and confidence Total Sales opportunity not being tapped optimally

Repurchase, Replacement and Expansion projects

 No proper screening and evaluation Sales opportunities  Repurchase: High conversion rate  Replacement & Expansion: Low conversion rate  Enormous time-drains in unproductive activities

Innovation projects:
 Significant time-investment, high risk of failure and low conversion rate  Less time spent in early stages of cycle  No proper prioritization of sales opportunities

Knowledge Transfer across Sales Reps not being utilized properly

Industry: Sales Process Audit

 Shift

from Product Focus to Customer Orientation. Improved Customer satisfaction  Improved brand image for Hardware Quality  Lacked commitment towards creating opportunities  Serving existing customers led to huge time-drains developing quotes, managing prices etc.  Over-commitment & under-delivery has led to failure of many Expansion projects  Increased customer expectations( those who received special attention)

Existing structuring of Sales opportunities Account Approach

Downstream Repurchase Opportunities
Enter through this segment as a product vendor Selling existing HP products to customers

Mid-Stream Replacement & Expansion Opportunities

Migrate up to IT infrastructure and Enterprise-Wide solutions Industry specific knowledge expertise

Upstream Innovation opportunities

Significant timeinvestment Chances of failure are high Looking out for specific problems of customers and addressing them

Suggested Structuring of Sales Opportunities

Portfolio Approach
1) Enter an account an multiple levels 2) Customized Sales approach for different sales opportunities Mid-Stream 3) Matching sales resources to sales opportunities. Upstream Downstream Enterprise Customer (A portfolio for HP-CSO) Repurchase opportunities
Continuously improve Operational efficiency High Price-Discount pressure

Replacement Opportunities
Select opportunities properly Prioritize opportunities based on potential

Expansion Opportunities Innovation Opportunities

Ability to sell concepts Instill confidence of Delivery

Recommendations to Diaz
Just a brief Recap of the current sales approach first Sales force worked essentially for the company as a whole; sales' responsibilities, budget, and activities were at the service of pushing the entire portfolio of HP products y Theoretical it gave sales force ability to cross- and up-sell, In actuality, the company's huge product lineup was beyond the ken of any single mortal. y Separate product divisions had little or no control over the process or sales budget. There was no one to blame when things went wrong.
y

Recommendations
Realign its computer sales and marketing activities around three customer segments -- Retail consumers,
Commercial resellers and Enterprise accounts


Consumer Sales and Marketing Organization Retail customers focus Commercial Channel Sales Force -Value-added and high-volume reseller channels that will serve small, medium- and large-business Enterprise Sales Force to focused on HP's largest end-user customers
The Enterprise Sales Force also will create "pull" for PC desktops, servers and associated networking products, relying on Channel Partners and HP's professional services and support organizations to provide integrated solutions to enterprise customers.

Recommendation
The New Reporting Structure
The sales forces will report to their primary business groups as well as to a new, single Computer Sales and Marketing Organization to assuage worries of Decentralization . y The new sales alignment will continually emphasize close relationships with its customers. y HP will use its new sales-organization alignment to increase its intimacy with customers, expand its knowledge and to leverage all available HP sales and support resources with channel expertise.
y

Recommendations : Analysis
Advantages of Organising sales force by Product/Activity
y y

Disadvantages of Organizing sales force by Product/Activity Duplication of functions (e.g. different sales force for each division) y Negative effects of competition y Lack of central control over each separate division

Clear focus on market segment helps meet customers needs

Positive competition between divisions y Better control as each division can act as separate profit centre
y

Learnings
y

In an B2B market scenario, the Supplier needs to constantly re-align its Sales Process to meet the dynamically changing customer demands and requirements. The above re-alignment of Sales Process should take into consideration the Sales people in terms
x Proper Training to upgrade skills x Knowledge transfer across Sales reps x Performance-based incentives and compensation plans

Thank You