Synopsis: Waste Management Market — Growth Strategy
A leading manufacturer of equipment to the waste treatment market was in need of a channel strategy that would grow its business. The client’s goal was to become the number one or number two supplier in each region and to increase the profitability of their business.
QDI had two research tasks in this market. The first was to understand the client’s present market share, both regionally and by type of account and then why the client had the share they did. Using QDI’s market effectiveness model the reasons for lost share could be:
- Addressed Market – the client was miss portions of the products that the market purchase
- Market Presence – the client did not have presence to customers who could buy its products
- Close Rate – when presented, the client lost either because of price or some other dimensions of its value proposition were lacking.
Through in-depth interviews with the municipalities and haulers who made up the market, QDI consultants were able to determine that our client had a product line that covered most of the market’s needs and a reasonable close rate when it saw the business. Their direct sales team, sales support and logistics groups were very good at supporting customers from early in the bid process through purchase and shipment. Likewise, its sales reps were very good in getting presence to and managing the sales process with large accounts.
The problem was that our client had very weak market presence to the medium and small customers. Thus, it did not see these customers’ bid requests until late in the sales process, if they saw them at all. The result was a low close rate on the business they saw and limited overall presence.
In conversations with municipalities, the research discovered that medium and small municipalities purchased this product category through distributors. Thus, the second research task was to understand who these distributors were and whether or not they could effectively market our client’s products. QDI consultants commenced with research to identify the types of distributors who sell our client’s type of product. From the municipality interviews the consultants had collected some company names, so research into these companies was the starting point.
This research identified truck body distributors as the type of distributor who would sell our client’s type of product. QDI was able to obtain a list of truck body distributors and randomly sample in this list to determine our client’s presence as well as their effort to sell our client’s type of product. Our consultants discovered that theses distributors already had competitive lines that they were basically satisfied with. Our client would have to bring something else to the table to get these distributors to switch to them.
The discussions with the distributors helped our consultants understand how they managed their businesses. It turned out that because of very low margins, our clients’ product category was actually treated more like a rep line than a stocked line, thus our client could potentially design a program that provide the distributors with a rep agreement for its core products as well as stocking incentives for related product categories that our client could offer that would expand the distributor’s business.
With this understanding of how customers purchased and how channels sold these product lines we were able to work with our client to design a sales process and organization that was able to see and influence these customers early in their purchase process, thereby increasing their market presence and increasing their close rate on these target growth accounts.