Applied Energy Products came into being just over two years ago following a management buy-out, but its three market-leading heating, ventilation and water appliance brands Creda, Xpelair and Redring can trace their heritage back to the fifties.
Although the company sells mainly to wholesalers, it operates in a highly complex supply chain, as Ochrombel explains.
“There are a lot of people who can influence the purchase decision – from architects to building sub-contractors- all of whom may have their preferred brands and products. So although our contract might be with the wholesaler, there are probably five or six other people in the chain who we also need to be talking to”.
The need for an effective Customer Relationship Management system was underlined by the Creda heating brand which, says Ochrombel, is very much a specified product.
“You don’t just pop down to the wholesaler and buy something off the shelf.” He explains. “you need to take into account the fabric of the building, the configuration of the rooms, the kind of temperatures you need to maintain and so on.
“For many years we have offered a free design service that takes an architect’s plans and turns them into a detailed specification. This is then passed to developers and contractors, and if all goes to plan we get a sale at the end of it”.
Measuring Return on Investment
“A couple of years ago we realised that we were putting in millions of pounds worth of value in terms of these free specifications but we didn’t know how much of it converted into genuine business.
“We undertook a lengthy study to find out more about conversion rates and why sales leads sometimes turn cold. A conclusion we came to was that we needed some sort of mechanism to track projects through their life cycle.
“We also realised that this had to be done through key contacts and that what we needed was a CRM package that would tell us ‘these are your customers, these are the projects, and there are the relationships you need to be aware of’”.
On the surface, there were a number of packages that seemed to offer potential but Applied Energy’s next task was to find the one that would really deliver…and that’s where Six Sigma kicked in.
Six Sigma in action
Six sigma seeks to replace subjective criteria with decisions based on fact, information and data. Key decision points are broken down into measurable, more tangible facets and, even where subjectivity is unavoidable, Six Sigma allows for a more measurable response by bringing together the right cross section of people and giving them a scale on which to score the suitability of a particular process or application.
Ochrombel, who in Six Sigma jargon is a Master Black Belt, put together an eight-strong team that included members of the sales force and sales admin team, specification managers IT personnel and finance.
Commercial Projects Manager Paul Trainor, also a Six Sigma Black Belt, stresses the importance of involving a broad cross section of stakeholders in the selection process.
“There are many examples throughout industry where IT departments have picked a package that they think is brilliant, but put it out in the field and the sales force won’t use it because it doesn’t work in the way that they need it to work.”
The team set about defining what it was they wanted CRM to achieve and determining what measurable outputs they would expect the system to deliver. Having established their criteria they were able to go out into the market place and to ‘score’ available products against defined priorities.
The company looked at six systems but a ‘first sweep’ quickly ruled out three of these on the grounds of cost, functionality or lack of flexibility.
Remaining players then came in for much closer scrutiny including visits to reference sites and dialogue with those already using the software on offer.
The result was a recommendation to the Applied Energy board to invest in Project-SalesAchiever, a powerful, user-friendly CRM package developed specifically for the construction industry.
Unlike some of the rival systems Applied Energy looked at, Project-SalesAchiever can be tailored to meet the specific needs of individual companies and is backed by an ongoing programme of product development and consultancy support to provide real business solutions focused on improving performance and increasing sales.
Says Trainor: “We have a very good relationship with SalesAchiever, the company that developed Project-SalesAchiever software. We have regular review meetings, talk through new developments and discuss how the system can help us and how we can help SalesAchiever…it’s very much a partnership approach.
“one of the reasons we chose them was that, when they came to make their presentations, it was obvious they had put themselves out to find out what we we’re about. They had taken the time and the trouble to make the demo system look and feel as if it was ours already and that gave us the confidence to think that these people were really in tune with what we do and the way in which we do it.
“This was in stark contrast to some companies who came in and basically said: ‘Well, t his is what we offer…you want anything different it’s gonna cost big bucks!’.
“When SalesAchiever talked about the construction industry, it was clear they knew their subject and that they understood the complex nature of the relationships that exist.”
Monitoring results and measuring success
Six Sigma is an ongoing management tools so, having been used to select the most appropriate CRM package, it is now used on a daily basis to ensure that the system continues to deliver.
Says Ochrombel: “If a particular process is important to you, then you need to know how good you are at doing it and so, to us, the reporting function of Project-SalesAchiever is vital. For example, it lets us know how many projects come in, their value, how many are converted, the time it takes to achieve that conversion… and a whole lot more.
“Long term we believe that perhaps the biggest benefit to us will be on the project management side but, at present, improvement in this area is difficult to quantify because the lead time can be so great.
“However, within a few months of going ‘live’ we had seen a dramatic increase in telesales which virtually trebled thanks t o the intelligent use of the CRM data”.
Response from the sales team has also been very positive. Says Trainor: “Some were a little suspicious to start with but now they can’t live without it.
Information that in the past would have involved someone trawling through paper files, and then processing it on a spread sheet is now at their fingertips and is updated daily”.
The Managing Director of SalesAchiever said: “The decision to introduce CRM is often seen more as a necessary evil than a quantifiable benefit. However, the Six Sigma team at Applied Energy provide hard evidence that a CRM system powerful enough to support the complex sales and marketing processes within the construction industry offers significant and measurable positive results.
“We very much value our relationship with Applied Energy and the way in which we have been able to work together to develop business solution specific to their individual needs.
“Thanks to that partnership, Applied Energy has bespoke CRM package that provides a highly effective tool for understanding multi-layered customer relationships and tracking potential business opportunities.
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, is the symbol for standard deviation – a measure of variance. Six Sigma aims to reduce variation to no more than +/- six standard deviations between the mean and the nearest specification limit. When a process is operating at Six Sigma, no more than 3.4 defects per million opportunities are produced.
