There has been evidence in many companies that the state of the economy is improving, however the pressure to feed the sales pipeline will never lessen. Businesses have always placed a premium on the sales effort and on accomplishment in bringing in more revenue. Even when there is “no hiring” going on, most companies would bring on a strong salesperson, as an addition or a replacement. The burden to nurture and grow relationships, as well as to bring on new customers, falls on salespeople. That is their job, right?
When the sales pipeline stalls, what do you do?
There are other important relationship touch-points in your organization. Customer service, purchasing, estimating, and production can all help to generate revenue through a well-designed and implemented Change Management process.
We have seen a single production facility increase revenue through existing customers by slightly over $1 million in one year. This was done with minimal additional cost to operations by capturing revenue for work already being done, which resulted from program or project scope changes. “Minimal additional cost” makes this high-margin additional revenue.
The keys to a successful change management program must begin with a commitment from the top of the organization. Without senior management support and involvement, change management will fail. The first step toward a change management program is a well structured and documented Statement of Work, (SOW), as discussed in a previous post, which documents the baseline specifications and expectations for both supplier and customer.
A change communication and approval process must be implemented very carefully, working closely with clients and sales to assure continuation of good client relationships. Clients need and deserve clear explanation when an established formal or informal process or unwritten “rules” are affected, and to understand that there can be benefits for them. They have the opportunity to make their own internal process improvements which could help make them more efficient, (and enhance your relationship with them), and avoid some additional costs due to changes that could be avoided if addressed up front.
Next, a process for identifying and capturing variances from the SOW as work progresses must be created. Clear responsibility for identification and follow up for every step of this is critical. The process must include a quick assessment and calculation of the impact to project cost, and a decision about whether this is chargeable effort. If a charge is warranted, sales and the client are notified of the impact to price and schedule, and client approval to continue the work is required.
If change management has not been part of the way you do business, it will take persistence, time, and inclusion of your clients to make it a successful part of your standard operating procedure. The benefits are well worth it. A recent client of ours, a multi-site provider of Direct Marketing and Critical Customer Communication Services, achieved over $370,000 of high-margin revenue in the first nine months of change management process implementation; this included the time to develop and establish the process, and train all the associates.
I will be presenting a case study on this initiative at the Document Strategy Forum on September 14 in Chicago. I would also be happy to provide a the presentation after the conference – you can request it through our website at www.R3D2Consulting.com – but I hope to meet some of you in Chicago and answer your questions directly.