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Increase sales through analysis

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Operations Excellence by Sepp Gmeiner
Sepp Gmeiner is a partner with Lignum Consulting. For feedback, questions and/or suggestions please email s.gmeiner@lignum-consulting.com

The recession is over. Economic growth is going to come. But the media is still feeding us worries about the Euro-zone on a daily basis. We would all like to believe in the upswing, but it has not arrived at our doorstep yet.
When I talk to different companies, they say that the economic situation is better than it was one and two years ago, but it is still not ‘good.’ More factories are reasonably busy now. They are manufacturing five days per week, but some with fewer staff.
One thing is clear to me; in order to improve the bottom line we can no longer wait to make changes.
In a recent network meeting, we did a brief survey of the companies present on what they thought would help their business the most. ‘More sales,’ was the most common answer. I am quite confident that this sample of the dozen or so companies of the Bluewater Wood Alliance would be consistent with a survey of the entire industry.
Now, how do you get more sales? I like to simplify. I recently heard the best simplification on increasing sales. Selling the same thing to more customers – or – selling different things to the same customers!
The fact is that there are many companies in the market who offer similar products, so why should customers buy from you? When you look in the market and see product made in China or Vietnam, you know their competitive edge is the low labour cost. But when you look closer, you will also find product made in Denmark, Germany and Austria. These countries are known as high labour cost countries. What are they doing differently?
They do their homework. A good portion of their input cost differential is offset by much higher labour productivity. Better machines, better use of the resources and highly-trained staff. The key difference is that they produce consistent quality, have innovative design and product development, and apply the right marketing strategy to develop a brand and brand recognition.

Compare this with your company.
What are you missing that is preventing you from making that sale?
More than 90% of the woodworking companies in Canada have fewer than 100 employees. Taking away the 1-2 person companies, the average is between 10-15 employees. These smaller companies often do not have the budget to conduct sophisticated surveys. However, this survey does not have to be extensive or expensive: Ask your last 10 customers what they liked and what they did not like about their purchasing experience?
If possible, ask a few customers who bought somewhere else, why you did not win the job?
Find out why customers who bought other product did not even know about you?
If you list the answers and discuss them with your team, you might be surprised to find that you already know most of the reasons listed. Most reasons are obvious. An open discussion within the company might get you to the same results.
This article is intended to be about operational issues, so I don’t want to give a lot of sales and marketing advice. But once you have feedback from the customer survey and internal meetings, address the areas that require change and start implementing improvements. Many issues are connected to operational issues. Such as quality problems, incorrect specifications, lead-time for initial delivery, lead-time for correction (customer service), price/cost too high.

Where do we start?
We all live and work in an environment of limited resources. Even if we know what is wrong and what has to be improved, we may not have the time, the capital, or the talent to implement all improvements immediately. The successful companies know how to develop a strategy and prioritize activities.
Before you start an improvement quest, you need to understand what needs improvement. This points us back to the customers and why they buy from you, and more importantly, why they do not buy from you.
Only by understanding where you are not measuring up to the market requirements and understanding where you are not leading, allows you to set your goals and objectives.
“If you do not know the goal, you will not find the way,” is an old saying. If you cannot set your objectives, how can you pick your strategy and your action plans? Where do you want to be next year (short term), in 2-3 years (medium term), and what do you want to achieve in 4-10 years (long term). A lot of people think this is easy. Most people have an idea where they want to be and what they have to do to improve. It sounds and looks easy, until you try to put it on paper. Once you try to document and communicate it, the challenges become clear. I urge every company to try it.
Establishing your objectives and communicating them to your key staff is one of the most important elements to attaining these objectives. How can anyone help you pull the cart if you are not telling them where you want to go?

Sepp Gmeiner is partner with Lignum Consulting. For feedback, questions and/or suggestions he can be contacted at s.gmeiner@ lignum-consulting.com.

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