PERF RMANCE 04 - The Performance Portal - Ernst & Young

Competing for market share in
rural India
Deployment of appropriate funding
methods and effective monitoring of
the funds deployed led to a significant
improvement in the dealers’ profitability
and enhanced their ability to service the
market more effectively.
3. Sales force effectiveness
Another critical aspect was the
effectiveness of the sales force (including
both the client’s and the dealers’ sales
forces in the local markets). Based on
the analysis, we found contact by a sales
person during the sales cycle was one of
the most critical components impacting
successful sales performance (see
Figure 9).
Analysis of customer buying behavior
revealed that customer conversion
dramatically drops when the salesman
has not met the customer during the sales
process. For example, conversion ratio
was 36% when a company salesman met
the customer, irrespective of whether the
customer visited the dealership or not.
Conversion ratios went up to 48% when the
customer visited the dealership and was
visited by the salesman. However, when
the salesman did not contact the customer
during the sales process, the conversion
was only 5%, irrespective of the customer
having visited the dealership.
As a consequence, running initiatives to
increase the number of sales personnel
(of both company and dealer) in the
market and also increasing the frequency
of visits made to a customer during
the sales process dramatically improved
sales performance.
Overall impact
By focusing on the key elements of the
client’s distribution equity and introducing
some very specific changes, the effect
was a significant overall improvement
within a very short period of time (see
Figure 10). While only part-way through
implementation, the client witnessed a 50%
increase in its market share and is currently
looking at rolling out a similar program
across its entire network within India.
Figure 10. Sales and market share
performance
8%
180
90
11.21%
226
83 100
12.35%
253
Figure 9. Analysis of customer buying behavior
December January February
Customer conversion driver
Customer conversion ratios
Implementation launch — mid December 2010
FY 09
FY 10
Salesman contact
Dealership visit
36%
Summary
Salesman contact
Salesman contact
Dealership visit
Dealership visit
48%
5%
While organizations spend significant
amounts of time and effort in developing
their brand equity, in rural India, given
the nature of the market, it is critical
for organizations to focus equally, if not
more so, on their distribution equity. We
believe this will yield greater returns to
organizations planning to succeed in rural
markets in India.
67