Sales Related Synergies
Customer and Sales synergies, in essence are the 'front-end' synergies. Most of the other synergies are back-end synergies like shared services. Sales related synergies are:
Sharing sales outlets
In a typical formation, the sales outlets are owned by an SBU and the other SBUs which are selling through those sales outlets will be sharing expenses related to a sales outlet. The sales outlet is a great example of synergy, as it is necessitated by the business model. Having common sales outlets may not be always an ideal solution. Companies go for separate outlets for different brands, and also for non-related products (For example apparel companies have different outlets for different brands, and also separate outlets for kids vs. ladies apparel)
Sharing sales Employees
Sharing sales employees make perfect sense as it gets you more mileage out of a sales headcount. This model typically has a 'sales employee channel owner', who provides sales and distribution services to different SBUs. The challenge is same, if you are sharing a 3rd party distributor. One needs to ensure that training, compensation and sales process across all the products the sales person is selling, are well-coordinated across the SBUs. This shared sales employee model will be having a matrix structure, whereby you will have a sales manager being responsible both to the owner of sales employee channel as well as the head of SBUs.
Similar to the sales outlets, one need not have shared employees for all scenarios. In case of non-related products, non-related target customers and in the scenario of dissimilar sales skills, one can have segregated sales teams.
Sharing 3rd party distributors
This is the same as the sales employees. Once you have contracted a 3rd party distributor, it makes sense to maximize the relationship by using it for wider range of products.
Sharing channel to non-physical contact with the customer
This includes sharing of telemarketing, Web E-commerce.
Sales Promotion and Advertising Synergies
Sales promotion material (which is not linked to a specific product or campaign) can be created to promote the overall business or mulTIPle related products belonging to different SBUs. The sales promotion includes outdoor advertising, banners, Point-of-sale brochures, merchandize (like stickers), road-shows, corporate events etc...
TIP- As you do promotion, you would like to define on the objective of the sales promotion. The objectives could be segregated across:
- Corporate and brand promotion
- Specific Product or Sales campaign promotion
- General sales promotion
One can use the 'general sales promotion' for promoting mulTIPle products across the SBUs.
TIP- Marketing is a good function to take charge of shared sales promotion activities.
Sales Campaign Synergies
An organization can design sales campaigns which are packaging and selling cross-SBU products. For example- in festive (say Christmas or Chinese New Year) season, an organization can launch campaign providing:
- Discount packages including combination of diverse products
- Discounts on overall purchase of any product
- Broad-based new product launches (whereby SBUs have to co-ordinate on the timing of their launch)
TIP- When SBUs are sharing sales channel (sales employees and 3rd party distributors), they will be needing to work to-gather to decide on the sales compensation. Sales compensation has to be designed to ensure that there is an overall gain to the enterprise. If you want to sell more of a certain products for a given period of time, you will design your sales compensation accordingly, even if the other SBUs may not like it. It will not be called cannibalization of one at the cost of another, but a priority-driven adjustment. |
