Journal of
Corporate
Renewal
Nov/Dec
2013
Similarly, a company can retain its
best manufacturing equipment and
decommission older machines,
while optimizing the layout of the
plant floor. Finally, a reduction in
volume provides an opportunity to
reevaluate the business’ network
of warehouses and distribution
centers. Ambitious operators should
jump at the opportunities for
operational improvements that a
reduction in volume can uncover.
Sales. The customer rationalization
effort requires a commensurate
rationalization of the sales force.
Management should not assume,
however, that the sales people
who oversee the accounts that are
rationalized should be cut first. Rather,
the entire sales force should be
assessed, and only the best performers
should be retained. After all, the
new motto is “fewer but stronger.”
Sales people, especially top performers,
tend to be the first to jump ship
when turbulence strikes a company.
Therefore, retention bonuses for the
best sales representatives and managers
should be put in place. Members
of the sales force who survive the
rationalization process have a great
responsibility. They must counter the
fear, uncertainty, and doubt (FUD) that
will likely be spread by competitors
to cast aspersions on the company’s
sustainability to remaining customers,
who are more important than ever in
the wake of rationalization efforts,.
The sales force also must play the role
of distributor partner representative,
encouraging rationalized customers
to switch their business to one of
the company’s distribution partners
to satisfy any residual needs for the
company’s products. Despite facing
higher prices, a rationalized customer
might develop a great relationship with
one of the company’s distributors,
resulting in retained business and a
strengthened relationship due to volume
referral. The sales force must view a
rationalization effort as an opportunity
to retain “fewer but stronger” customers.
Marketing/Communications.
A company’s marketing and
communications resources must
be hard at work during a customer
rationalization effort. A “fewer but
stronger” message must be crafted that
relays to the market, “We’re exiting some
relationships that we’ve found to be
unsustainable, but this effort will free
resources to better serve our customers
and channels that are most aligned with
the strategic direction of our enterprise.”
This message must be ingrained
in all outside-facing company
representatives, including the CEO,
CFO, head of human resources, legal
counsel, vice president of sales/
marketing, sales reps, etc. The message
should be delivered via websites,
blogs, social media, press releases,
and in person, especially to remaining
customers, who are key to the
ongoing economics of the business.
Additionally, to counteract internal
consternation, town hall meetings
should be held to address employee
concerns in interactive forums.
Finally, the sales force should receive
guidance on referring rationalized
customer to specific competitors.
This is a unique opportunity to direct
unprofitable business to a company’s
most threatening competitors, which
continued on page 8
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