Sal Abbate, Chief Sales & Marketing Officer at Andersen Corporation
Keynote Topic: Leading the Journey to a Value-Centric Culture
Gary Tubridy: I am here with Sal Abbate, Chief Sales and Marketing Officer of Andersen Windows and we are here to talk about your topic of leading the journey to value centric sales. That is a topic near and dear to my heart. First, let me welcome you here, Sal. Great to have you.
Sal Abbate: Thank you, Gary, it is great to be here.
GT: Thanks. Tell me about this journey. Let’s start at the beginning. Why start the journey?
SA: I have been with Andersen for two years now and I will tell you probably within my first six months I could see the signs of trouble. One was just watching our sales people do their sales pitches and just overlooking some presentations to some bigger accounts. It was very product-focused. It was very traditional. Let me tell you why our mousetrap is better than our competitors mousetrap. That was the first sign.
The real telltale sign was the market started to improve so we—I am in the building products industry obviously, which most people know has been on a precipitous seven-year decline. One of the longest—it is a cyclical market but one of the worst and steepest declines in the history of the industry. As the market started to emerge last year, about mid-2012, we were not riding along with it. We had to react pretty quickly to the fact that we are just not going to rise with the tide as the market improves. The actual market had really shifted and we were not prepared to take advantage of it.
GT: You are on this journey, what milestones have you set out there to know where you are in the journey?
SA: That is a good question. I would say we are very early on and so we are through the preparation phase, the design phase. We have done some spotted implementation so we have taken advantage of opportunities where we have very little penetration, either in particular segments or in particular geographies. It is going quite well. I will tell you though, this is going to be a multi-year journey.
What really inspires me about it or excites me about it is the fact that we really have the sales team now at the tip of the spear. We have laid out a three-year roadmap of how we are going to add segments to the market and to the business. How we are going to add geographies. How we need various types of sales people to really grow or business and we really do have a good portion of the organization behind us. I would tell you that we are on the first 50-percent of the work.
GT: There we go. It is a bit of a marathon as opposed to a sprint and you are at about mile 13.
SA: That is right. We have not hit the wall yet.
GT: Based on where you are, do you have any observations about what some of the biggest challenges have been to-date or perhaps will be in the future?
SA: I would say during the design phase, one of our biggest ah-ha moments was it was not just a comp plan issue. The first solution was switch the comp plan to be more variable based and put more at risk to our sales force and that will solve the problem. As we have started to talk to the Alexander group and really got introduced to the full suite of the sales management process we realized the comp plan is really the caboose. While we can change the comp plan what it would mean really would be two things. We would have our sales people quit and really it would not be the solution and that they did not have the right tools. In some cases they did not have the right DNA to make the change.
I would tell you that the—that was one big realization for us was that the comp plan was not the only problem. It was a symptom but not the only problem.
GT: You talked about a three-year process. It would be nice to know that at the end of that three years you are done but of course there are some other things you are going to be looking for. How do you know you are done?
SA: Yes, I do not think we will ever be done. I will tell you in my mind it is a three-year process around what we can see in front of us but as the market changes, as our competitive set reacts, I think we have to just continually and iteratively apply the tools that we have now to make course corrections along the way. We have actually communicated that quite well to our sales team and to our senior leaders around the fact that this has to be the new way in which we approach our sales deployment. We cannot think that we are going to make these changes in 2013 and then we can revisit them in three and four years and everything is going to be okay. I think we have to continually fine tune and look for ways to improve.
We are going to be adding functionality and what I would consider to be sales enablement organization so we are bringing on our first formal enablement group, which would be the sales operations team. Then we also plan on adding inside sales so we have—one of our realizations, another milestone or realization for us was we did have sales support throughout the organization and I put support in quotes because sometimes our sales people did not feel supported. We had sales support. We had plenty of resources. They just were not aligned to the right things for both our sales team and our customers.
We are going to continue to work on bringing those groups together more formally, putting them under the customer umbrella, which is my organization. I have all things customer-related; sales, marketing, customer service, backend field support, logistics and transportation. All of these sales enablement organizations will now reside in sales and in the sales function so that we can direct and stay connected with the organization.
GT: Any quick tips you would make on how to get that sort of alignment you are seeking across all of these disparate organizations?
SA: I think, not to be too trite, but I think communication is a key. We have a steering committee that is cross-functional. We have our CEO on it, we have our CFO, we have our Chief Administration Officer, our RD&I, Chief Technologist. They all know what we are going for and what the size of the prize and the vision is. I think that is key to make sure that they understand why we are doing what we are doing. It is not a territorial grab or an organizational hierarchy play. It is really about aligning folks to make the sales team as effective as they can. I think that would be one tip would be make sure that you really engage all of the senior leaders in the organization that at some point in time are going to be tapped into to help the sales team succeed. (51:46:04)
GT: Tell me, what kind of value can you now deliver to your customers that you could not deliver 18 or 24 months ago?
SA: I will give you two examples. One is segment-based. We have been historically heavily concentrated in the single-family new construction business. That was part of our problem because that was the part of the market that was hit the hardest. For example, that market dropped 75-percent from its peak in 2005. All of our sales force was really aligned only at that particular segment. Through the value based selling we actually looked at various segments that could help us be diversified and that one that I would really reference would be our commercial segment.
This would be either a multi-family, institutions or maybe what I call light commercial so a store front, maybe a five-in-one, which means there is a retail shop on the bottom and there are apartments on the top or assisted living. These folks have a different set of—a different value proposition that they look for when they are choosing a supplier. Again, using the right playbooks and the right tools, we were able to craft a story and actually craft a value proposition for this commercial segment to really help drive that business.
What might be important to this group versus a single-family home buyer or home builder is they really want to know about total cost of ownership. While the absolute cost of the window is important to them and one criteria, what was more important to them and what we had ferreted out with discussions that I’m listening and insights from them, was how is it going to perform over five, seven, 10 years. As they are getting—insuring their apartments will the windows withstand the test of time and the punishment a renter puts towards the window than a buyer. That is an example of a place where we really excel, Anderson, as a quality supplier of more luxury windows and we could tell that story over time and how our service team and our sales team could deliver that value better than our competitive set.
GT: That is a new message to a new buyer. Could you do all of that with the same sales organization?
SA: Yes, I would say—not necessarily. What we did was we segmented our sales team. We had both a qualitative and a quantitative way to measure the sales organization. Quantitatively, we looked at their performance to goal. We looked at their size of their pipelines and how much churn they had and then qualitatively, we assessed them on 30 or 40 different attributes that would be more applicable to hunters versus farmers.
Those folks who scored best, both quantitatively and qualitatively around hunting were the folks that we chose to go out and start this business.
It was really what I would call a pilot or an experiment. We did not magically convert 40 or 50 of our sales people at this channel. We took the top six or seven who really had the ability and the penchant to be more architecturally oriented and we developed them. They had the innate DNA, what we had to marry up with that now was a set of sales tools that were repeatable in nature that can help tell the story.
GT: Here you are in your journey to value selling, are there words that you would use that describe what a value centric culture looks and feels like?
SA: One, I would say is connected and that is connected to the customer, connected to the analytics and then connected, as I mentioned earlier, to each other. All groups in the organization have to be connected to what is important and really articulate that.
Another one I would say would be insight driven. Make sure they understand the various constituents that are the targets that we are going after and what is important to each and every one of them. They are very different. Even in a very non-technical environment like windows, we have very different needs by very different customers and even within a segment. We have done some insight work around the remodeling segment and sub-segment to the remodeling segment into five different segments. They have folks who we consider to be—we call them—we have different names for them or monikers.
One would be, show me the money. The show me the money folks are—they are in tune with value but you have to show it—how it flows to the bottom line. Another is help me sell. These are the folks that really value you as a business partner and the size and scale of an Anderson can partner with them to help them sell their products to the customers that they are trying to close. I would say that insight selling is number two.
I think the third thing would be follow the follow or know where the margin is, know where the value is. There are going to be customers that you have to just consciously not sell and I think that is the hardest part for a company making the journey to a value centric culture and that is knowing when to walk away from a customer who is inherently just going to drive the price to the bottom and nobody wins in that game.
GT: Not all customers want value.
SA: That is correct. That is correct and I think while all sales people would want to convince themselves that they can make that switch, you have to know when you have reached the point of a customer that is not going to value the same things you do and know when to walk away.
GT: SA, Anderson Windows, thanks for joining us. It has been a pleasure.
SA: Thanks for having me.