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Guiding Plastic Manufacturer
to Achieve Consistent Cash Flow

Mike was hired to help Zohar to better structure the sales team and bring the company to new sales targets. Mike is very knowledgeable in sales management and how to motivate people. He will adjust the message to the audience he is talking to and will not give up until everyone understands. He was a pleasure to work with and always has a positive outlook on things. He is a glass half full type of a person. I would enjoy working with him again

Gilles Mamane

Former Sales Manager, Zohar Plastiques

The Problem

The plastics processing industry is characterized by a large number of small and medium-sized enterprises (SMEs) that are almost all Canadian-owned such as our client. Their principal activity is the processing of synthetic resins into plastic products.

Synthetic resin represents the most significant input to the plastics processing industry. Resin costs typically account for 30 to 50 percent of the final value of a plastic product. Fluctuations in resin prices have a strong impact on the plastics industry. During times of rising resin prices, plastics processors are not always able to pass increases along immediately, creating significant pressure on their gross margins usually averaging around 30 percent in Canada, in contrast to US counterparts at around 50 percent.  To be clear, gross margins is defined as value added minus production salaries divided by shipments, and used as a proxy measure for profitability.

The plastics industry did gain a 3 percent increase compared to the year before when we began this project, but this was well off the healthy 8.5 percent of prior years.  The industry and the client face a number of competitiveness challenges that included: (1) the small size of many of its Canadian companies; (2) the need to match high R&D rates of their U.S. competitors; and (3) a more secure supply of its Canadian natural gas feed-stock.   That said the following year industry shipments were down by seven per cent, representing a year over year decline for the first time since 1991.  Then the financial crisis of ’07-’08 hit the industry hard as well as the rest of Canada.

Our client was struggling with the above macro situation when we began this project.  Briefly on the supply side resin costs were at or above 50 percent, while gross profit was down below 30 percent.  There was not much room for expanding marketing and sales investment, while cash flow was very tight. Meantime they were also struggling with the following micro situation: sales were flat.  They faced similar issues as industry with high turnover across all functions.  While like many counterparts faced minimal R&D funding availability.  Increasing revenues and sales therefore was of paramount priority for our project.

The client initially met me while presenting the value of technology for improving cash flow, at a technology industry event.  They were also impressed with our sales effectiveness work at a mutual manufacturing acquaintance.  I was hired for my prior accomplishment to drive sales when its seems impossible.

The Approach

The first priority was to initiate a marketing and sales audit, in the first week.  Briefly what our audit uncovered follows:

  • There was no company marketing let alone effective corporate website
  • The manufacturer did relatively little exporting, in contrast to their competitive counter-parts
  • Contrary to the rest of the industry much of their business was local
  • Operationally they were working with out-dated equipment and non-existent research and development
  • While their local customer and  prospect targeting mix was all over the map.
  • A review of sales history highlighted the revenue gain by each sales person was sourced to just 20 percent of their average 150 accounts list
  • Meantime the sales culture was essentially every sales person for themselves.

The next step was to meet with the sales team individually and as a group.  During the last group meeting of the second week, the biggest obstacle to achieving revenue growth was verbalized: What do I know about the plastic industry?  The answer was none whatsoever.  The rest of the answer was that I can still outsell any of them with no such know-how.  I submitted that I can prove it if they were open to it.  I then proceeded to pivot on this question and the challenge made to the sales team, to establish a new marketing and sales strategy with the collaboration and commitment from the team.  Note any sales team is worth its weight in gold is competitive and this team was hungry to do better and ready to take on my challenge.  During the third and following weeks:

  • Shared with the team part of the audit’s results or industry numbers some of which were outlined in the above problems section.  Discussed how these macro conditions needed to be respected in their market approach
  • Established via dialog the visible lack of marketing, website, or specifically no tangible inbound leads to qualify.  Confirmed the lack of data sharing or referrals between sales team members as well.  Discussed how these micro conditions make them less effective in the marketplace individually and as a group.
  • Reinforced the above discussion by leading them through a marketing exercise or why they thought that their company was better than the competition.  Bottom line they were not.
  • Then I led them through a sales analysis of their respective accounts, and as a group.  Note I had to be respectful of data privacy given they didn’t share their info with one another or the company.  Bottom line they were not targeting their own accounts list effectively despite meeting average million dollar quota.
  • Introduced unique, compelling but narrow marketing and sales strategies given minimal company investment.
  • Ensured open and candid dialog as to the sales strategy going forward as individual and as a team
  • Then outlined bold and decisive action to agree on, for example they were only to retain 20 percent of their respective accounts while they would be given ten qualified leads a week. 
  • Visibly led building our new marketing and sales approach as team.
Proceeded to put the new sales strategy with the team as follows:
Year 1:
  • Provided sales team with up to date information on market changes previously not shared, such as resin pricing trends and deliveries
  • Built a simple and direct email campaign to elevated target market within an approved marketing and sales cadence set by the team
  • Set clear objectives to team members
  • Set up an open source CRM to help manage and track those objectives 
  • Created reports from CRM to help validate account through to opportunity funnel size and actions to be taken
  • Produce strong quarterly forecasting 
  • Ensured that revenue and gross margin targets are met
  • Communicated with clients with agreed marketing  and sales cadence when needed
  • Marketing strategy was a simple and direct email campaign program, one each for customers, targeted prospects and enterprise accounts
  • Provided recognition and feedback via 1 on 1’s and team meetings
  • Worked closely with product managers
  • Monitored resin inventory with all relevant parties 
  • Ensured that all staff has received all relevant sales mentoring, coaching and training
Year Two
  • Repeat year one, and expanded upon sales team account target mix or moved them from small clients though with volume to mid-size and enterprise clients
  • For each, salesperson provided further sales mentoring, coaching and training particularly for enterprise selling and longer sales cycles.
Year Three
  • Repeat year one and two, further expanded upon sales team account target mix or added one to three enterprise distributors in their respective industry focus.
I chose the above approach because each salesperson was a veteran.  Coming in with a stick will go nowhere.  Rather a collaborative approach allowed me to add to my industry research with their seasoned experience in the field.  This led to a much better marketing sales strategy than strictly on my skills, experience, accomplishments and business guile.
Allowing collaboration in developing the marketing and sales strategy for the salespeople demonstrated respect for their skills, experience and accomplishments.  While they saw their respective contribution in the new marketing and sales strategy.  And they eventually experienced referrals and data sharing between team members or the result of their marketing and sales strategy.  Effectively their commitment and passion drove the marketing and sales strategy.
Walking into this project, I had the ownership’s blessing to do whatever it takes for achieving revenue growth.  Even so replacing the existing sales team, overhauling processes and changing technology support was too costly as a proposition given tight cash flow the organization was already facing.
I leverage my expertise in:
  • Market Research
  • Business Analysis and Acumen
  • Strategic Planning, and gaining buy-in from seasoned sales team
  • Servant Leadership, in helping close enterprise deals
  • Sales Professionalism and mentor, coach and train ‘How to’ sell
  • People Engagement, to influence and gain seasoned sales team buy in and commitment
  • Organizational Development and Business Modeling
  • Technology Know-How

The Result

Simply put, we delivered singular project goal:

We re-focus the sales strategy, along with collaboration and commitment from the sales team.  This resulted in expected outcome of revenue  growht or 5% annual growth during a period of year over year industry decline.

Besides achieving revenue growth request, we improved the sales team effectiveness from lead qualification conversion of 10% through to improved margins of each sale.  The manufacturer experienced an above average gross profit of 40 percent during this period.

Due to the improved gross profit margins from year two, the manufacturer  was able to invest in a small but productive research and development laboratory which led to a bio degradable addition to our product offer.

This addition led to the manufacturer first ever seven figure  deal in year three with a regional mid size distributor supplying the brand and company McDonalds.  No question the latter was a feather in our cap for this project.

Behind this case study were my skills, experience, and competencies with:

  • Market research which provided me with the plastic industry know how that respected by the sales team
  • Putting the research into a viable sales strategy that everyone could buy-into also required a lot of my people engagement skills
  • Addressing political aspect that the customer data which was owned by the salesperson and not the company required my people engagement skills as well
  • Setting up each salesperson accountability and getting it required my leadership skills.
  • Helping where needed with ‘how to’ enterprise selling
  • Leading by example, with a sense of urgency and a focus on improving rather than on results or winning led to the success mentioned.
Edited in 2020, I still stay in touch with many of the team members who went on to productive and successful careers.

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