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Transformational Sales Philip Kotler (cid:2) Marian Dingena (cid:2) Waldemar Pfoertsch Transformational Sales Making a Difference with Strategic Customers PhilipKotler WaldemarPfoertsch KelloggSchoolofManagement BusinessSchoolPforzheim NorthwesternUniversity PforzheimUniversity Evanston;IL,USA Pforzheim,Germany MarianDingena MPCN,ActionLearning&BusinessCoaching/ RotterdamSchoolofManagement TheHague,TheNetherlands ISBN978-3-319-20605-9 ISBN978-3-319-20606-6(eBook) DOI10.1007/978-3-319-20606-6 SpringerChamHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2015948263 SpringerInternationalPublishingSwitzerland ©SpringerInternationalPublishingSwitzerland2016 Thisworkissubjecttocopyright. Allrightsarereserved,whetherthewholeorpartofthematerialisconcerned,specifically therightsoftranslation,reprinting,reuseofillustrations,recitation,broadcasting,reproductiononmicrofilmorinanyother way,andstorageindatabanks.Duplicationofthispublicationorpartsthereofispermittedonlyundertheprovisionsofthe GermanCopyrightLawofSeptember9,1965,initscurrentversion,andpermissionforusemustalwaysbeobtainedfrom Springer.ViolationsareliabletoprosecutionundertheGermanCopyrightLaw. Theuseofgeneraldescriptivenames,registerednames,trademarks,etc.inthispublicationdoesnotimply,evenintheabsence ofaspecificstatement,thatsuchnamesareexemptfromtherelevantprotectivelawsandregulationsandthereforefreefor generaluse. Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthisbookarebelievedtobetrue andaccurateatthedateofpublication.Neitherthepublishernortheauthorsortheeditorsgiveawarranty,expressorimplied, withrespecttothematerialcontainedhereinorforanyerrorsoromissionsthatmayhavebeenmade. Printedonacid-freepaper SpringerInternationalPublishingAGSwitzerlandispartofSpringerScience+BusinessMedia (www.springer.com) Lifeislikeridingabicycle. Tokeepyourbalanceyoumustkeepmoving. AlbertEinstein ToEvaandPeter forelicitinglearningofthemostprofoundkind: givinginsightintotheessenceofunconditionallove. MarianDingena Iwouldliketothankallofyouwhohelpedmetokeepmovinginthelastyears inparticularlyMarianandSusanne. WaldemarPfoertsch ToNancy,witheverlastinglove. PhilipKotler Foreword AtVodafoneGlobalEnterprise,Iexperiencethatweareenteringanew,transformative era in human and business relations. In particular with our enterprise customers we are driving change and making a difference within the market. Sincemanagementandemployeeswanttodevelopandkeepupwith demand,weneedtounderstandtheunspokencustomerneedsandtransform ourselvesandourofferings. ThisnewbookofKotler,DingenaandPfoertsch,presentstheprovencon- ceptsforthistransformationaljourney. Theypresentaperspectiveandaroad map,whichguidesyouandyourcompanyorinstitutionintoaneraofbetter human and business relations. In the Global Enterprise Division of Voda- fone,weareworkinginlinewiththeseprinciplesandexperiencedastonishing resultsover the lastyears. As shown in one of the many case study boxes of this book, Vodafonehas developed a particular relationship to our strategic customer Amazon, in a jointgo-to-marketstrategy. Since Amazon wants to increase their customers’ options with an ‘always on experience’, Vodafone happily took the challenge to make that happen. Amazon also wants ‘to be the earth’s most customer- centric’ and gave us the opportunity to transform ourselves with them to deliverthe mostoutstandingperformancetotheircustomers. Toworkwiththese kindofforefrontcustomer companiescanbeanexcit- ing undertaking, and it may at the same time be a lengthy learning process. The vision and best practices shared in the following chapters may provide insight to undertake this journey in a smoother way. It starts off in Chap. 2 with separating Strategic Customers from others, and you will find the defi- nitions and various management tools to determine the future value of your customer portfolio. Our experience shows that it is not easy to move from transactional and solution sales to transformational sales. You need to bal- ance risk and opportunities internally and externally. You need to have your financialimplicationsconstantlyonyourscreenandyouneedtoknowwhich perspectiveyouhavewiththesinglecustomerandinyouroverallsituation. It isimportanttorealizethatthetransformationincludesyourentireworkforce fromsalestosolutiondesignandservice,butalsoallsupportingfunctionssuch aslegalandHRneedtobepartofthejourney. Theauthorshaveputtogether x TransformationalSales all available insights and many examples to illustrate the starting process for yourtransformation. InChap.3,theauthorstakeyouonaridetoadvanceyoursalestoastrategic level,moving itawayfromtheactualsellingofexistingproductsandservices toengaginginbusinessconversationswithcustomersandotherpartiesinthe valuenetwork. TheyprovideyouwiththeprinciplesoftheExtendedDecision MakingUnitandgiveinstruments fordevelopingcustomerinsightswiththe Supplier Adaptive Capabilities grid. They encourage you to develop a Joint StrategicFocusanddiscover ValueInnovationOpportunities. ThebookoffersmanyillustrativereallifeexamplessuchasApplelaunching the iCarplatform,ShellNewLens Scenarios,the ‘Embeddedengineers’con- cept as applied by Festo at Marel and Europcar and Daimler who launched the car2go mobility system. Other examples are from Philips, ABInBev and GE. AtVodafoneweknowthatguidingbusinesstransformation(Chap.4)needs to acknowledgethe intrapreneurialrole andmindsetinthe company. Iagree with the statement in the book from Ivo Rook, Director Northern Europe atVodafoneGlobalEnterprise,that‘realvalueiscreatedbeyondsystemsand processes’. This is a requirement to successfully drive change with strategic customers. If you can guide ‘company-altering’or ‘behavior-altering’experi- ences with your employees and customers, the chances are high that you can mutuallyincreasecustomervalue. Guiding business transformation is making customers more competitive and successful in their markets. This means for you that you need to act as a lead collaborator with them in whole global value networks. You need to offer business-altering value propositions, which could be very specific, even tailoredforonecustomer. Thiscouldmeansuccessforyouandthecustomer, i.e.,reciprocalvalue,creatingawin-winsituation. This book describes many examples of business transformation: Dell – streamlining processes by moving Unilever’s IT deployment into Dell’s fac- tory, Europcar moving your way – flawless experience for business travelers, Festo reducing Total Costof Ownership at strategic customers, GE Aviation increasing‘residualvalue’forBoeingBusinessJetcustomers. Other examples are about LSI Logic Corporation, Kodak, TNT and our before mentioned Amazoncasestudy. I could not agree more with the statement in the book (Chap. 5) that the mostpowerfulwaytoincreaseimpactmaybebyinspiringotherstoreleaseun- tappedpotential. Startingwithanewmindset,ashiftinfocusisrequiredfrom ‘whatweneedfromothers’towards‘whattheymaybecapableandwillingto contribute’. We learnwhat we need for creating alignmentaround vivid and factual business opportunities. You and I know that this is not an easy task, Foreword xi butwecanlearnfromtheexamplesgiveninthebookaboutworldrenowned companieslikeSiemens,ElectroluxandTNT.TNTExpressexample–asone oftheworld’slargestexpressdeliverycompanieswithaglobalreach–describes howcustomerinsightdevelopsintosolidbusinessdevelopmentandhowthey createalignmentanddeliverthe promise. In Chap. 6, the book rounds up the efforts of undertaking the transformative journey. We at Vodafone know that Transformational Sales requires disrupting both the customer’s and the supplier’s thinking and assumptions about their business, but we also know that the payback is worth doing it. When you can create a learning partnershipat all touch points in your com- panyandhaveasharedimprovementagendawiththeclient,youarelearning real-time. This puts you ahead of the curve of the competition. It did it for Vodafone1 and can do it for you. This book gives you all the ingredients for thetransformation. JanGeldmacher,CEOVodafoneGlobalEnterprise 1Note oftheVodafone Group: Note thatVodafone isatrademarkoftheVodafone Group.Otherproductandcompanynamesmentionedhereinmaybethetrademarks oftheirrespectiveowners. Preface Intheglobalizedworldmoreandmorecompaniesarechallengedwithongo- ing pressure to generate greater revenues from existing customers. The vital ones expand into new and emerging markets and maintain healthy profit margin. Many leading organizations are at a cross road; they are looking to accelerate the performance of their sales teams and they are empowering the marketing organization. In the meantime customer needs are changing and theemployeesarerecognizedasanimportant,gamechangingassetoftheor- ganization. Not all companies master this array of conflicts and drift from theircustomersandpeople. Withtheconceptoftransformationalsales,firmsandinstitutionshavethe opportunityto master this challenge. Transformationalsalesbringscommer- cialthinkingtoanewturningpoint,incorporatinghumanandorganizational requirementsintoaconceptwhichwillallowhighpotentialsalesandmarket- ing leaders to accelerate growth and achieve break-through success with new organizational setup and process thinking. This holistic approach can help executivestoimprovesalesperformancebyhonestinteractionwithcustomers and employees. Transformational sales can help realigning the strategic re- sources, optimizing sales operations, harnessing sales talents and providing a frameworktomaneuver throughturbulenttimes. This is not about reaching the quarterly numbers; it is about driving the business to new heights. With no doubts, it will be a struggle to be heard in the organization bringing dramatically new value to the customer. But it is worthtoavoidpricewarsandtobreakoutofthefunctionalsilosandbroaden yourimpactandtoincreasevaluetoyourandtoyourcustomer’sbottomline. Transformational sales is changing the thinking of how to do business by sledgingawaythecompartmentsandboundariesbetweenthefunctionalsilos. Bytransformingyourcompanyfrom‘aproductandsericecentriccompany’to an‘adaptivecapabilitycentric company’ itis necessaryto see also the human partofanybusinesstransaction. HenryFordfounderoftheFordMotorCompanyprovidedtheworldwith theassemblylinetechniqueformassproduction. Manycompaniesaroundthe worldfollowedhisprinciplesandprovideampleproductsinmanycategories. Transactionalsellingprocesswasthe basisoftheirsuccess.

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Inspired by a new, transformative era in human and business relations, this book provides a unique perspective on the business transformation that results from the collaboration between suppliers and their strategic customers. It is all about guiding organizational change and business transformat