WF Electrical - The Huthwaite approach in action
About WF Electrical
WF Electrical supplies the most extensive range of electrical products and fittings to the trade and industry in the UK. They operate through ninety-six branches against some of the stiffest competition in any industry sector. The competition ensures that pressure on price and margin is constant. So, for a company that values and takes pride in the breadth of their product range and superior quality of customer service, life at the sharp end can be tough.
Having addressed efficiency issues to achieve best productivity without compromising quality of service, WF Electrical undertook a project to measure the effects of training and coaching their salespeople to adopt a more consultative, customer focussed approach to their selling. They selected Huthwaite and SPIN® to help them with this task.
2 Project goals
The objectives were ambitious, requiring amongst other things demonstrable and sustainable improvement in sales revenue and margins. The project requirements were rigorous and included benchmarking and change measurement of both skill levels and bottom line results. In summary, the project requirements set by WF were:
- increase in sales revenue
- improved profit margins on sales
- further strengthening of customer relationships
- integration with business’ direction
- demonstrable, high quality selling skills
- sustainable and ongoing development
- transfer of ‘know-how’ from Huthwaite to WF Electrical
- benchmarking and measurement of progress and results.
Happily these requirements were met by the Huthwaite Approach. This is a four-stage project methodology, designed to ensure sustained behaviour change and deliver on Huthwaite’s claim that it can ‘Change behaviour, Change results’. The all the stages have the capability for measurement built in and they are:
- Content Diagnosis: Identifying the behaviours that lead to success and benchmarking salespeople against them
- Process diagnosis: Assessing blocks to progress and developing an appropriate implementation plan
- Intervention: Delivering the training that enables salespeople and sales managers to learn and apply the new behaviours
- Integration: Reinforcement of the behaviours by means of coaching, and evaluation of project results. [MSOffice2]
3 Logistics and scope of project
To enable the cause and effect relationship to be established between training, behaviour change, and bottom line results, control groups were established. A project group of twenty-four salespeople were randomly drawn from the eight regions (three people from each region). After benchmarking sales performance, this group were trained in SPIN® selling skills, and their performance compared with control groups made up of the remaining people in the salesforce (90+). Eight Regional Sales Managers helped to customise the training course materials, they were then trained to combine the jobs of providing good quality field coaching to salespeople in the project group as they left their training programme, and recording both behavioural and market data whilst on joint customer visits.
Measures were taken over three periods.
- Months 1 to 3. Pre-project benchmarking of sales performance figures over a period of 3 months (August – October 2000). Two measures were used – sales revenue and gross profit on sales.
- Months 4 to 8. In-project tracking over a period of five months (November 2000 – March 2001). Off-the-job training of the project group took place in November, and field coaching continued through to the end of March. Inaddition to ongoing recording of sales performance figures, behavioural data gathered at the point of contact with customers was also collected by the WF coaches.
- Months 9 to 11. Post-project measurement of sales performance figures over three months (April – June 2001). During the post-project period, all training and coaching activity ceased. This period was both to measure the sustainability of any changes achieved during the project phase and to counter contamination from the Hawthorne* effect.
Linking sales behaviour to financial results
Three questions needed to be addressed in order to establish the link.
- In behavioural skill terms, what does a successful sales meeting for WF Electrical look like?
- Has the use of these ‘success’ behaviours increased?
- If so, has this change led to increased sales and better margins?
As in many companies engaged in business-to-business sales, many sales visits do not conclude with signed orders or definite ‘no sales’. To enable determination of the outcome of any particular sales meeting, the management team established a set of objective criteria against which salespeople and managers in the field could decide whether a sales visit was successful or not. These outcome measures, combined with the behavioural data collected, enabled the profiling of skills associated with successful (and unsuccessful) selling in WF Electrical.
Statistical analysis of the data showed not only which skills correlated most strongly with successful selling, but also whether the salespeople in the project group were using these skills significantly more as the project progressed.
4 The results
What does a successful, WF sales meeting look like?
A total of 233 sales meetings were observed and the resulting data analysed. Behavioural data collected during meetings with a successful outcome was compared with that collected during unsuccessful meetings. Four behaviours showed sufficiently strong statistical correlation with success to establish a cause and effect relationship. Three of these were seller behaviours, two describing types of questions, and one describing a type of statement. The fourth behaviour was a particular type of customer need statement.
Has the use of these successful behaviours changed?
Before training commenced, fortyone sales visits were observed and analysed to benchmark seller and customer behaviour. Following training, field-coaching visits were made, each seller receiving five such accompaniments spread over eighteen weeks. Throughout this period, the coaching managers observed sales meetings and recorded behavioural data, which enabled the project management team to track any behaviour change over the life of the project.
Does changed behaviour lead to higher sales revenue and better margins?
Due to departures and recruitment there were fluctuations in the number of salespeople over the eleven months of the project. To ensure reliable comparisons, only data relating to those people in post throughout the period from August 2000 to June 2001 was used for performance evaluation purposes. For comparison purposes, the unit of measurement used for each period was: average sales/gross profit per salesperson per month. On both measures taken – sales revenue and gross profit on sales – the project group outperformed the control groups.
Furthermore, the project group were the only ones with progressive improvement over the two periods following the benchmarking.
It is significant that the performance of the project group continued to improve during the post-project period, when all coaching and field support was withdrawn. Importantly, this establishes that the improvement in performance is attributable to the skills learnt rather than the presence of coaches and researchers. It further indicates that the improvement is likely to be sustainable.
The sales skills learned (SPIN®) aim to equip the salesperson with the means to help the customer realise the full, competitive value of the product and service being offered, and hence reduce downward pressure on price. The results show that proportionately, gross profit on sales increased by more than the growth achieved in sales revenue – evidence that the skills were being applied successfully. The graph compares revenue and profit improvement achieved by the project group in the post-project period compared with their own performance preproject
5 Feedback from the people
Hard data, such as that above, provides one measure of success. A second measure concerns the experience and perceptions of the managers, salespeople and customers engaged with, and affected by, the training and coaching.
Sales managers and salespeople report increased levels of confidence and motivation, and a strengthening of the relationship between them. ‘More professional’ was an expression used frequently. The objective for each sales visit is sharper and better defined, and sellers navigate their sales conversations with greater acuity and control. They experienced a change of focus in sales meetings, from price to service.
Anecdotal reaction from customers reinforces the ‘professionalism’ of WF Electrical salespeople. Customer comments indicate that trained WF people impact as ‘problem solvers’ rather than ‘pushy salespeople’; they feel that the focus is more towards them and their business.
The view of senior WF managers
Steve Coker, Head of Salesforce Development at WF Electrical comments: “We have found the SPIN® Selling training programme a major benefit to our business. In addition to the increase in sales and gross profit, we have gained in several other areas. Our Sales team is more focused and confident in front of our customers, and we have a far better structure to the planning of any customer visit. We have also enjoyed a more dynamic approach towards selling and coaching from our Regional Sales Managers, who were trained in both SPIN® Selling, and in Coaching Skills and become coaches/mentors for our Sales team. SPIN® has certainly given WF a unique selling point with our customers and is starting to help us differentiate ourselves in our market place. In WF we pride ourselves on putting our customer first and on being second to none when it comes to quality of customer service and a professional approach. I am pleased to say that Huthwaite International matched us all the way in these areas by the way they managed and delivered the SPIN® programme and also with their very flexible approach to the training.”
Trisha Jones, HR Director of WF Electrical had this to say: “This is the best sales training programme I have come across. It is certainly the most effective development programme we have implemented in WF. The financial performance results speak for themselves. Yet, apart from the obvious rewards of increased sales and gross profit improvement, one of the greatest benefits has been the change in attitude of our Business Development Managers. They are far more confident following the SPIN® training and coaching, and they have a more structured and professional approach to their sales calls. This is confirmed by our customers who tell us that WF BDMs seem to understand their needs better than our competitors’ sales reps.”
Sales skill development need not be an act of faith. Intelligent application of the right skills directly leads to increased revenue, better margins and strengthened relationships with customers. Manager coaching of salespeople is a very productive activity – providing they are coaching the right things. ROI in training and coaching can be measured and, as this study showed, compares well with competing business investment choices.
With thanks to WF Electrical for granting permission for this report of the study to be published, and to the directors, managers and salespeople who took part in the project.
Particular thanks to the team who initiated and managed the project in addition to the myriad other tasks which their jobs demanded: Trisha Jones (HR Director), Steve Harbour (Operations Director), and Steve Coker (Head of Salesforce Development).
The Huthwaite International team: Bernard Midgley, Linda Marsh, Dominic France-Lynch, Frances Cross.
* The Hawthorne effect – an increase in worker productivity produced by the psychological stimulus of being singled out and made to feel important.