#51 - Simon Bøge & Mikkel Bach-Andersen: The Existing Customer Goldmine - Six Levers for Profitable Growth

Speaker A: Welcome to the Growth Agenda, a, uh, sales and marketing podcast presented by Quadrat Consulting. In this podcast, we explore how commercial leaders can provide new answers to the old. Where will growth come from? We hope you enjoy today's episode.

Speaker B: Today I'm joined by my new colleague, Simon Beu. So welcome, Simon.

Speaker C: Thank you.

Speaker B: Uh, we've written a, uh, paper on how to get the most out of your existing customers. Um, very interesting topic and very timely, I think, for a lot of companies. But maybe just a quick, uh, introduction to yourself, Simon, before we jump into that topic. Um, welcome to Grant.

Speaker D: Thanks. Happy to be here.

Speaker A: Yeah.

Speaker C: So, uh, as Mikael's indicating, I started fairly recently and uh, we jumped on this project together over the past month here. Um, so my background is in Consulting. Um, 22 years in working with businesses on commercial development, uh, strategy, uh, turnarounds in multiple industries. But a lot obviously for companies that this would be relevant for. Uh, so, you know, I, I, uh, I agree with you. I think it's, it's timely for many businesses.

Speaker B: Yes. Because, um, I think a lot of, um, air time and focus and attention and resources goes to winning new locals

Speaker E: in a lot of organizations.

Speaker B: Also a lot of praise. Right. For, for good reasons. But, um, in this sort of economic environment, uh, and with lot of the things going on in the world, I think a general, very high level observation on my side at least, and that also triggered the uh, paper that we did, is that a lot of B2B companies, especially sort of in the complex domain where a few customers make up a big part of revenue and maybe typically also a bigger part of profits in those companies, um, there's a bit of a lack of discipline and um, deliberateness about how, uh, they treat their existing customers in order to get the most value out of them. So that's of course a, uh, general observation. But to your point, Simon, why do you think this is a special topic that needs more attention that it typically gets in B2B organizations?

Speaker C: Yeah. So I think my perspective on that is in the market we're in now, you have two major sort of major dynamics, at least in my mind that I think about. One, One is sort of global political unrest, uh, which challenges supply chains, puts pressure on raw material prices, um, creates a general uncertainty about future commercial opportunities for companies.

Speaker D: Right.

Speaker C: And so that's the one thing companies have to deal with right now. And then on top of that you put like the AI, uh, wave that, you know, brings in my mind right now probably more confusion than benefit to some extent.

Speaker D: Right.

Speaker C: Uh, especially in Commercial organizations, I mean you have tons of opportunity but at the same time you've been for B2B companies sometimes working in the same way

Speaker D: for the past 50 years. Right.

Speaker C: So where do you go from now? And so if you take those things, uh, and you have a market where you know, you're fighting for each deal,

Speaker B: um, investment, uh, ability and interest is a bit down maybe.

Speaker C: Exactly.

Speaker B: Risk, risk appetite a bit down. So people are cautious.

Speaker C: You know, um, some may experience increasing sales because people are increasing inventories due to the uncertainty. But I think for most companies, uh, you, you know, they either can't price, uh, the raw material price increases fast enough into the, into the market so they hit on margin or they're seeing demand plummet. And so for those types of businesses, I think the deliberateness of your commercial uh, strategy M is extremely important and in that sense.

Speaker B: But those things going on, what's right in front of you, where do we have immediate access and a lot of data that's actually on the existing customers. Yeah, but interestingly enough. Right, so you talk about, focus on capturing demand generating pipeline through new logos, but then you have the existing customers, um, as what we call the gold mine. What is the unrealized potential and some of the issues that you see when we talk existing customers where you have

Speaker E: an existing sort of business relationship.

Speaker C: Yeah, so I think, I mean I think for the existing customers the lack of understanding of who has which potential, uh, who's getting what prices, um, what service level is appropriate for each uh, type of customers really some of the, you know, the things that we're seeing in the market right now in companies where it becomes sort of, ah, to some extent sometimes a one size fits all approach to the customers. And I, and I think that leaves money on the table, um, uh, to a far extent, um, either by giving away margin or by not grabbing the potential of the customer.

Speaker B: Yeah, I think that's one of the bigger ones. So I, you know we also in this respect also work with sort of price realization programs and so on where it can very quickly become quite defensive in the sense that, yeah, we're looking at capturing more of the value that we're generating, but we don't want to push customers away. But there's also something about being sort of aware of the actual value you're delivering and taking your fair share of that value.

Speaker D: Right, exactly.

Speaker B: And if you just leave it to the front line, uh, or don't have a clear map of where is the potential, what's your sort of leverage against that potential? And all these things, you're kind of left with gut feel, subjectivity, um, um, of the individual rep. Right. For example.

Speaker C: Yeah.

Speaker B: That's where it kind of lanes. Right. In how they treat their customers or the, the, the, the small account universe that they are, uh, that they are, uh, that they are uh, in charge of. Right.

Speaker C: Yeah. And, and, and I think, I mean in, and I think it all, it's all connected and, and in defense of sort of sales organizations, because I've been on the floor myself, I've seen this. And, and when the market tightens, uh, and we start talking about cost cutting, so you may even have less resources to do sales and marketing. The go to becomes of course an interest in closing deals and that puts pressure on price oftentimes. And so I think this is also largely, um, a management, something management needs to be aware of is do you give your commercial organization the comfort to conduct their commercial choices in the right way?

Speaker B: Yeah. And I think what's interesting when you dive into some of the analytics when we've done these audits of existing customers and what are we charging whom or how do we service different types of customers? I think two patterns and I see it's surprisingly sort, uh, of repeatable. One thing is, if you're, if you're a certain type of B2B companies, keep

Speaker E: in mind that it's not all B2B

Speaker B: companies that operate like this, but for a certain type of B2B company, a pretty small share of your client sort of, um, contribute with the sort of alliance share of your profit pool. So a few clients bring in actually, uh, outsized, uh, sort of profit. So that's one observation. Another observation is on the pricing piece, you look at what are you actually charging for the exactly the same product. Uh, and a very basic thing is to uh, look at that and there is surprisingly high variance. So you cannot even, you know, it's not about sort of trying to get around. It's different things they're getting. It's exactly the same line item, but the price is all over the place. Yeah.

Speaker D: Ah, the price or the service level

Speaker C: they're getting or shipments or other benefits that you're sort of giving away to close the deal right now.

Speaker B: Um, and maybe that's one of the things is it's not about. It might be right. Who knows. But it's the deliberateness and a little bit of a strategic approach to how to handle all the gifts you have, how to price for leverage or price for value. Um, um, in a world where you have quite A lot of customers. And if you just keep giving things away, uh, you're leaving a lot of value on the table.

Speaker E: Yeah.

Speaker C: And I think, I mean, it's a core problem of many of the firms that we're either working with or chatting

Speaker D: with these days is the lack of

Speaker C: insight in your customer base, um, as sort of a foundational thing. I met with a firm this morning who, in their commercial organization doesn't have a view on the value of their pipeline. Um, so the value of customer transactions in their pipeline. And so, you know, it's. It's. If you don't know either, you know, the value is one thing, but the potential of your customers, uh, then you're bound to make wrong decisions.

Speaker B: Yeah.

Speaker C: Um, and so I, um, mean, it's. It's the equivalent, it's the analogy of saying, you know, I have a. Of an airline. You know, you have a business customer. You, uh, have transactional data on them for the past 20 years. You know, they fly every freaking week.

Speaker B: Right.

Speaker C: Um, and so you put them in business class and give them a meal and treat them nice. And then you have a young professional who comes into the airline who might have bought an economy ticket and sits in economy. You don't have any transactional history on this person, and you don't know the potential. I mean, he may fly every week for the next 20 years, uh, uh, but you're asking him to pay euros for a coffee, and you sit him in economy class. And so that customer's lifetime value is going to be extremely high. But you don't know that.

Speaker D: Yeah, exactly.

Speaker C: Right.

Speaker B: Um, yeah. And it's an interesting thing. I think another thing, um, one of the symptoms of lack of discipline and deliberateness is, um, something I've seen at least, is that you just, you know, if you look at your sort of the distribution of customers, you kind of just cut it in, in, uh, slices, and then you just, uh, distribute them among your salesforce. And then, um, each of them has 80 or 100 customers. Some of them might be extremely big, some of them being extremely small. Some of them have high potential, some of them have low potential. So, um, what you actually do not control, though, is how do the reps actually spend their time across this distribution of customers. Right. And one of the, I think most sort of, um, sort of a very sort of clean move you can do is to look at different, um, engagement models, for example, so assigning ownership of these accounts or moving ownership of these accounts. And there's a lot of different ways to do it. But having the clarity and the right diagnosis to make a deliberate choice about how to handle who to own accounts and whatnot can also be a uh, big unlock, uh, as opposed to just sort of leaving it on the individual rep to figure out how to spend the time with this very, um, sort of, uh, yeah, uh, diverse distribution of customers.

Speaker E: Right, Yeah.

Speaker C: I mean you also miss the specialization of a sales rep in that respect. And I think, you know, maybe one final symptom is, and I think you're alluding to it, Mikael, is lack of transparency on sort of the, what we would call the full cost, you know, profitability of a customer. Um, because oftentimes we only look at uh, sort of the landed cost of a transaction which does not include services and uh, freight and you know, other things that we actually, that actually cost us a lot of money, samples and all those kind of things. And so I think to be as deliberate as what we are saying is you need to have a certain level of transparency on your customer base to really do that.

Speaker B: And maybe that's the uh, that's the bridge. Uh, Simon, because we, in the paper we outline sort of six levers. Okay, I get it. I'm a type of company where the lifetime value of my clients is high. I have a lot of repeat buying or I'm a subscription business where it makes sense to be a little bit strategic and deliberate about existing customers. I'm that type of business. I'm seeing some of these symptoms that you're alluding to. So where, where do I go from here? Um, and I think one of the things we said, at least a very sort of obvious immediate lever, is to get a view of the baseline. So really, really strong fact based view about what's going on. How are we pricing the different types of customers? Uh, how does the customer distribution look in terms of contribution margin? Factoring in the sort of total cost picture, what's the potential or the economic upside of different clients? Again, to your point, if we don't have that, we tend to just uh, gravitate towards big clients. But a big client is not necessarily a high potential client. So our first thing is to get that full end to end view on what's actually going on here. And I think that alone triggers a lot of introspection and interesting uh, discussions. But again, it's also quite rare that companies actually have this full view, at least in my experience.

Speaker C: Yeah, absolutely. Um, but I think it's worth the investment. Um, I've had clients where I spent three months doing sort of A full data load on the customer base. I've had customers where I spend two years on it. I think common for both uh, types of clients is that uh, that the commercial initiatives that they start, the way they organize themselves, the prices they're setting, the level of service, the SLAs that they're forming with their customers are uh, much more profitable once uh, you have that overview. So I think as a firm you really need to create some level of that base uh, at some point. Uh, if you really want to make sure to wring out all the value of your existing customer base.

Speaker B: Yeah. Because what you can layer on top of that, the second lever to that point is to lay on top a much more fact based segmentation model. And I think that's one of the cornerstones of managing your managing sort of a value when it comes to handling your existing client. Right. That segmentation model. And you can just kind of laugh at it like a two by two or whatever it is. But it's just an extremely important compass. Right. When it comes to mapping out all the things that we want to give or charge for price, all the things that we throw into the mix. What is your experience with building sort of a segmentation model?

Speaker C: Uh, yeah, I mean I've done segmentation multiple times, uh, probably on the wrong side of 20 times uh, with firms uh, and they do what makes the

Speaker B: good ones good and the bad ones.

Speaker C: But I think what makes the good ones good is that you actually use them.

Speaker B: Yeah.

Speaker D: Right.

Speaker C: Um, and I would rather have a

Speaker D: firm that has four segments in two by two that actually adhere to them

Speaker C: and everybody uses them. Then I would have a very complex.

Speaker A: Yeah.

Speaker B: Ah, your analytical mind would say that's too crude. We cannot.

Speaker D: But Exactly.

Speaker B: But it kind of, it works.

Speaker C: It's much easier to work with. I mean we've also had clients where we work on psychographics and demographics and you do behavioral segmentation and we have all kinds of bells and whistles. And I think in the B2C uh space, I think that does have its right. I think in the B2B space that's way too complicated. And so for me I think actually making sure we use that, um, and that's where this whole account management of field sales, uh, portfolio review is interesting because once you do the segmentation and then you graph out and say who actually has what kind of customers, you do get surprised. I mean you'll have a field rep who has 100 customers who are all sort of in a growth segment. So customers we don't have a lot

Speaker B: of share of wallet with so probably a lot of those would be underserved because.

Speaker D: Exactly.

Speaker C: And then you figure out this guy or or girl may um, not even be the right profile to hunt those types of. And that's another thing.

Speaker D: Right.

Speaker C: You need to put your best man or woman forward on the type of customers you have. So I think making sure you have the segmentation but also really using it

Speaker D: I think uh, is the secret here.

Speaker B: And then I think my experience also making it a dynamic tool that lives in how you run your commercial organization. Dynamic in the sense that you're constantly recalibrating or reclassifying accounts against the framework one to making sure it's actually lands in the organization whether it's the CRM system or your commercial management model using to steering or how you allocate resources incentives, all the stuff that flows from a proper segmentation model.

Speaker C: Yeah and I think doing segmentation and I mean this is something that anybody who's worked in commercial operations will probably remember having done at some point. But um, you know I want to make ah a case for the simplicity of things again uh, you know I've had clients where especially in sort of more technical types of businesses where you spent a lot of time and you build almost like algorithms to define which segment a customer belongs in.

Speaker D: Right.

Speaker C: And then everybody finally agrees that this is the right segmentation. But then once you get to the point where you need to use it. Yeah, uh, that's the difficult part.

Speaker E: Right.

Speaker B: Very much agree.

Speaker C: So. So I mean rather you know, so

Speaker B: check your smarty pants when you're doing a segmentation.

Speaker E: Yeah, I think, I think a little bit you know something I'm very excited

Speaker B: about Simon in the back of a segmentation model which I really think is the foundation for everything we'll talk talk about from now. So yes you can call it it's just a two by two but it's doing it in a proper way and lending an organization extremely important. But that aside that's on the engagement piece. So matching different engagement models to the segmentation model I think that's a very natural marriage and a very very powerful change lever at least for him. We worked with a software company where we did the re ran the whole diagnostic of the customer base found out that the long tail of customers I think close to 70% of all accounts only made up around 30% of value

Speaker E: and had very low potential.

Speaker B: We had a potential scoring us also but they were all sort of mixed in with the bigger accounts. So the account Managers managing both types of accounts. And a very deliberate move from that for that company was to actually take away the ownership of those 70% of all accounts. Scary, scary. Right. And then um, move them to a more um, sort of uh, support led

Speaker E: and marketing led uh ownership model. Right. Because what happens when you just throw those into the mix in the old way is they take up a lot of time actually. They have very low, low potential. They might be poor fit customers actually. Right. So, so, uh, so that is a uh, sort of a bold move but a very simple sort of move but can make a massive difference because what it also does is of course it liberates a lot of time for your, your key reps to work. The big juicy high potential that comes from.

Speaker D: Yeah, exactly. I think for me I've had clients in, in different situations and I think depending on the situation of the client, you want to do different things once you have this transparency on your customer base. So one client would be massive market potential, tons of customers. We haven't yet grown sufficiently, uh, with our share of wallet.

Speaker C: Um, there you're going to want to

Speaker D: do exactly as you describe. I mean take smaller, uh, low profitability customers into a different service model, uh, where it becomes profitable simply to free up time for your account managers or field sales to actually do spend time

Speaker E: and lower cost of service or cost of sales.

Speaker D: Exactly. Uh, and then you have other firms where it's simply mature. Um, and so the way they grow

Speaker C: is by going further and further down

Speaker D: into the market and uh, grabbing smaller and smaller customers. Um, and so here you want to

Speaker C: think about maybe you know, do you

Speaker D: have the right size sales organization, uh, and do you even want to service those smaller types of customers? I mean does it fit with your model and can you build the model to fit?

Speaker A: Right.

Speaker D: So it depends a little bit on the situation.

Speaker E: So there's a lot of interesting discussions here. Do we sort of almost price ourselves out of certain segment? You know, it's kind of like a slow uh, moving divorce. Uh. Right, in a way.

Speaker D: Exactly.

Speaker C: So and, but I agree with you

Speaker D: and that's where this whole AI wave that's flooding in now becomes interesting for us is and for organizations in general is you know, if you have identified uh, a tailor web customers that are, if not low profitability but maybe even unprofitable once you start loading cost in or sort of understanding what kind of services we're providing them, then the tick touch, uh, that I know you like to call it, Mikael, uh, handling model or engagement model for those type of customers becomes quite interesting because AI can do a lot for us.

Speaker E: Yeah, totally trigger based, fully automated. There's no human intervention, uh, models. And to that point I think it's pretty interesting to look at sort of the profit profile of different clients. I think we, we also did some uh, some uh, diagnostic piece where I think uh, it was more than 60% or 70% of all clients are basically unprofitable. Right. So you get quite surprised when you to your point load in all the cost and it's a very big sort of task. But it's something that's rarely done and once you do it it can be quite uh, enlightening maybe flowing from that. Simon is also the whole pricing piece because one thing is cost to serve, what do our reps spend their time on? Another thing which I was kind of surprised going into pricing and looking at some of these diagnostics is how big a variance there is. For example, on the same product we've talked about before, how do you use pricing in the context of customer and value management, uh, as a discipline and what's.

Speaker D: Yeah, so I think this is one of the big ticket items for me. Uh, at least if you're time constrained as a firm, I think pricing is for sure one of the levers you're going to want to use to get benefit from your existing customer portfolio and future business obviously as well. But I, I think you know the way to drive out uh, I mean there are multiple advantages of doing these prices diagnosis as you say. I mean one, once you have the fully loaded cost, you're starting to, to understand the, what we would call revenue leakage part of things which is where do we give things away for free basically that we shouldn't do, uh, which effectively lands our realized price at either a negative level or two low, low levels. And so that's, that's the one thing, the other one, which I think is also interesting in these times where you want to give your sales organization more comfort and confidence is understanding how once uh, you see customers that we should have the same leverage with, um, so pricing leverage. They're the same type of firm, they buy the same amount from us, they have the same M level of switching

Speaker E: costs, concentration of suppliers.

Speaker D: Those other things is what are the outliers. Because what happens over time with pricing is that you get pressed for driving revenue like you do these years. Uh, you give a discount and then

Speaker E: it goes the other way. Yeah. Yes. So it chips away. Chips away.

Speaker D: Uh, it kind of chips away and drift from what should be uh, uh, the price. And so once you start identifying these outliers, you can tell, you have the discussion with your sales organization and the seller with the customer in saying look,

Speaker E: here's a false repricing.

Speaker D: Basically everybody else at this level is, is doing business with us at this price and that's the price. And so, so, and that's one of the other things about pricing that, that you know, um, that both help the organization but also obviously drive some revenue and.

Speaker E: Good point. Um, another thing that I think is also overvalued, undervalued. That's a little bit more on the sort of when you start to work with bigger account. Simon.

Speaker B: Right.

Speaker E: Where uh, I don't know how many times I've seen companies trying to, aiming to implement proper account management models where we have a structured, deliberate approach to keeping and developing accounts. Often it kind of someone does some

Speaker B: sort of deck and this is our

Speaker E: methodology and then nobody follows it.

Speaker B: But I've also seen when you actually

Speaker E: succeed, which is, I think there was

Speaker B: a study at some point with like

Speaker E: 20 or 30% of companies that want to do it, actually succeed with it. But when they do it uh, really hardwiring a very, very uh, sort of firm account management model, especially for these sort of high value, high potential clients. How um, also how impactful it can

Speaker B: be to be deliberate about how you

Speaker E: develop clients, how you invest when you bring in your CEO, how you do forward planning together with the clients, all the privileges that comes with being an important account. Uh, so codifying really that cadence both externally but also uh, you might say internally. So how do you manage your portfolio of accounts? How do you manage the conversations, how do you do deal strategizing and the relationship between sales managers and the uh, normal rep, so to say. Right. So I think um, getting deliberate about this operating cadence in a sales organization, Mac to the engagement model, segmentation model, all these things, uh, extremely powerful as well. Um, yeah. Back to building discipline and habit.

Speaker C: Right?

Speaker D: Yeah, no, no, I fully agree. I think some of the best CCOs and, and sort of sales managers I've ah, come across in my career is, are people who uh, like sort of the ongoing cadence and crunch time and the Friday meetings and the monthly calls and sort of they are constant in their behavior. So they don't. One year we do it this way, the next year we do it another way. But people who insist this is the way we do and these are the questions that we ask ourselves and they continue year after year doing the same thing. Because I mean, I think we're all creatures of habit. And so if we're in an organization we only once we've seen things many, many times it becomes second nature and we stop thinking about it. And that's when we really begin to perform. But if you change pattern all the

Speaker C: time, I do agree with you,

Speaker D: it becomes less efficient.

Speaker B: And that's a big part of course running a commercial.

Speaker E: But even more important when you're also uh, again trying to direct sort of uh, your uh, barrel towards the right high potential clients and whatnot.

Speaker B: I just want to introduce the sixth lever which is building really on what you said before.

Speaker E: Simon. What's unique about existing clients typically is

Speaker B: you have quite a lot of data

Speaker E: on different, you know, on this day on these clients, whether transactional data, relationship, uh, different types of engagement data. There's a lot of stuff typically coming in from your historic relationship. Um, um and a way to get the most out of that data is to build um, a data driven engine where you run some certain types of place. It might be uh, different types of uh, marketing um, owned or outreach owned place where you use the data, the signals to trigger some sort of interaction that again aims to uh, deliver some sort of outcome. And you know there can be many, many many things but, but everything from churn prevention to upselling to cross selling to building uh, um advocates. There's so many uh, different scenarios under the sun. You have data, you have AI capabilities now allowing you to do a lot of things at scale that, that also feels personalized for example. Right. And then different types of uh, digital technologies that allows you to engage uh, virtually with customers. So data driven place, be it the humans reaching out or it's fully automated also is a big, I think a big opportunity space uh in this uh, universe of getting the most out of your existing clients.

Speaker D: Absolutely.

Speaker E: Um, so that was kind of six levers.

Speaker B: Right. We talked a little bit about the

Speaker E: potential, why it's important right now with pipelines maybe being a bit more difficult and investment and getting new clients a bit difficult or get the most out of your existing clients.

Speaker B: Some of the things going on, type, types of the.

Speaker E: In terms of the symptoms of, of how you are managing uh, that how you're managing your clients, not necessarily in the best possible way, all the way to some of the levers you can pull when it comes to driving this as a transformation. Uh Simon, thinking it okay, I see these symptoms, I see the potential, I like the inspiration brought about in the case of these levers. What do I do now? What's kind of Your advice in terms of where do I get started?

Speaker D: I think my first and most fundamental advice would be that this is not a project that ends tomorrow. I mean it's a journey and you're going to have to perceive it as such. Uh, I mean at the end of the day, despite AI and other things, we're working uh, with people between people here. Um, and so the changes and things that we're talking about here to really drive out value are things that needs to happen to people. Um, and so I think whether you start in one corner, uh, and work your way over or you do the full thing, um, you need to understand that this will continue. And so I think installing in your organization and understanding that change is part of the way we operate, uh, is a super important part of any commercial improvement. And then I think it's a question of also depending on the situation of the firm is understanding what comes first. And I like to say, I mean when we do work with clients, I mean first find some quick wins, find some things where you can gain some, some quick success. Either showcasing that a UM model works or grab some, some value from the market. It can be through pricing. For instance, is, is typically a good short term initiative to start with. That can also fund the, you know, the, the, the journey ahead and then maybe take some of the longer term stuff. Reimagining your commercial operating model which can take longer and it can include digitization and other things. Take that on, on the backside of that.

Speaker E: Yeah, yeah.

Speaker B: And I think that's a, uh, that's

Speaker E: a really good point. I think another thing I've, I've also seen like is to. If you're really, really changing engagement models, you're reassigning account ownership, you're building up a new sort of fully digital way of engaging and, and all the things that comes from these types of, these

Speaker B: types of considerations is also to grow

Speaker E: a bit into it. Right. Um, it can be easy to do the slides, but how do you actually make it stick? Right?

Speaker B: So all the way down from trying

Speaker E: to pilot some of it, build uh, some success stories, get ambassadorship in the organization, build on those experiences to bring on the rest of the business. Uh, so there's um, quite a lot of different uh, change uh, levers you can use to, to make sure that this actually sticks. Because that is of course one of the um. I think one of the risk here is that the discipline and the deliberateness we're trying to build drifts right to a point about how do you operate, how do you Engage.

Speaker B: How do you invest your time?

Speaker E: All the things that goes into the mixer, uh, keeping the discipline in how you manage your customers is I think is the biggest, is really the biggest win. But it's also the pitfall that we simply drift away from whatever we all agreed on and then we go back to doing what we did or something changes and we slip back into the old model.

Speaker D: So to say, I think, uh, to

Speaker C: that point I fully agree.

Speaker D: I uh, think the way to prevent slipping back. Once you want to do a new model and you define new principles and uh, an operating model and things, I mean you have to think about incentives. You cannot get around incentives. I mean I've been in cases where

Speaker C: we've done a new operating model, a

Speaker D: new way of um, working with customers, focus on big customers, increase our share of wallet and business plan was ready and everybody agreed that this was the right thing. But management didn't want to touch incentives. And the issue is then if your salesforce is incentivized to close a budget at the end of the month still, I mean, what's their incentive to follow the playbook and actually focus on the big customers?

Speaker B: Right? Yes.

Speaker D: And so I think incentives is extremely important, uh, as one of the hygiene factors, I think another thing, because a lot of these things that we do, whether it be pricing or it be new account structures or it be a new pipeline management system, whatever it is, uh, that is part of a new target operating model, you know, that will require sales organizations to work a lot more with data and documentation. Um, and so I think having a sense for the, let's call it the ux, uh, of the sales organization. So how can we actually make their life? What is the experience they have here? How can we make their lives easier, uh, and free up their time to focus on what actually drives value rather

Speaker C: than, you know, burdening them with.

Speaker D: You need to fill out 15 different fields in CRM now every time you've had a meeting. I mean that's definitely not going to help. Right. So that's another thing I think is extremely important. So there are some of those details that you kind of need to get in there as well.

Speaker B: What about uh, planning for some of

Speaker E: the political pieces here? Because that's kind of hot potato, right? You talked about intensive models and yeah, the exchange didn't want to touch that for good reasons because that can be a really hot potato.

Speaker D: Right.

Speaker E: In the same vein, taking away revenue or budget or account ownership from certain people, moving into a global team or to even E Commerce and all these Things that also brings a bit of political tension. Uh, how can you sort of plan and mitigate for that? There's, uh, no easy answer here, but it's kind of. It's part of the deal. Right. So ignoring it is probably not the

Speaker D: right way to go about it.

Speaker E: Right.

Speaker D: Yeah. I mean, I think there is a multitude of things that you want to do, and I think you and I have both, uh, tried everything. And I think the best ones I've. The best case is the most successful commercial transformations that I've done. They're fully supported by top management. They have an understanding and transparency of the value we're chasing.

Speaker E: Yeah.

Speaker D: So an understanding of what is the business case of doing the changes that we are talking about here. Um, be it, what is the value of spending more time on big customers, spending more time on growth customers, uh, serving smaller customers in a more lean setup. I mean, what are the values out of that? Being very, very clear on that. Uh, both in management, but also in either regions or in divisions. Uh, understanding what it is, is it actually we're going for here and why? Um, I think, uh, that's another thing. And then the final thing I will say is involvement. I mean, I've never seen a commercial transformation project solely sitting in an ivory tower and head borders work, to be completely honest. Uh, so I think if you don't involve your regions or your divisions and sort of the local sales teams, you're not going to succeed. And also, it's not the right way to go about it because at the end of the day, they're the ones who need to live. Live the model. Right.

Speaker E: So they should have the same design.

Speaker B: Good stuff. Uh, Simon, I think, um, that's kind

Speaker E: of the closing note. So. So kind of.

Speaker B: Yeah.

Speaker E: Again, summing it up, a lot of potential, often a bit of a lack of discipline, of deliberateness, and also visibility in terms of the potential of our existing customer base. A lot of things you can actually do. Um, but it's a transformation. So it takes time, it takes deliberateness, it takes structure and a bit of patience maybe as well on some of them.

Speaker B: So thank you for joining the podcast, Ivan, and great having you in for dance.

Speaker D: Thank you and, uh, loving to be here.

Speaker B: Um, good stuff. See you.

Speaker E: See you.

Speaker A: Thank you so much for listening to this episode. If you have any questions or requests, you can always contact us@infooadradent.dk. if you want to know more about Kvatrad consulting, please be sure to follow us on LinkedIn, subscribe to our newsletter or go to our website. Kvatrant. Uh, DK.