Godrej Interio Healthcare
Godrej Interio, a business unit of Godrej & Boyce Mfg. Co. Ltd., is India’s largest furniture manufacturing company. Along with office and home furniture that it is well known for, the company has a new healthcare furniture line which aims of transform healthcare spaces and promote a safe healing environment.
The challenge for the Godrej Interio was that its market share in this segment (healthcare furniture) was low (around 5%) and nor growing at the desired pace. On a deeper analysis of the industry, it was evident that healthcare furniture is considered a specialized equipment that earned revenue for a medical facility (value is perceived only if it functions well for a long period at a low cost). Therefore, healthcare furniture needs a different Go-To-Market offer approach from that of standard furniture. Moreover, the buying process consists of multiple interactions with different stakeholders in a medical facility. This requires significant bandwidth and persistent efforts from the salespersons. Also, as the medical fraternity is highly connected, references and testimonials form a key decision-making criterion.
As in the case of most B-B environments, salespeople at Godrej Interio were in constant conflict between using the available bandwidth to service current orders and getting new orders. So, in this environment business development or developing new accounts was forced to the backseat.However, the company was able to resolve these conflicts with the help of Vector. Expert sales capacity was released by creating a central customer support team to take care of all non-sales activities. A more comprehensive offer was created that focussed on lifetime cost of ownership of healthcare furniture as the key value proposition. Then the released sales capacity was used to approach stakeholders at a much earlier stage in the sales cycle and systematically develop new accounts.
Within a year of implementation, the following results were achieved:
We actually reduced the sales team’s bandwidth from having to service the existing accounts and shifted the team’s focus and energy onto generating new requirements.
Godrej Interio is part of the Godrej and Boyce manufacturing company which is a large conglomerate. Interio is one of the biggest divisions of the company; it is a leader in the category of furniture for both homes and offices. A couple of years ago, we introduced healthcare furniture; this is for the medical fraternity and the healthcare segment.
So one challenge was that we were not into this segment earlier. And as a result of that, the buying method of this segment, which is based on references, was something which we were finding as an obstacle. The second challenge was that the competition was well entrenched in some of the large customers. So, it was initially difficult to get our value propositions communicated. And the third challenge was that our sales teams were not as clear as to the requirements of this segment, as they were to our other segments – institutions and homes. So, these challenges reflected in terms of the sales not really growing at the desired rate – it was growing by about 7-8% over a small base and our market share also continued to be low -in the range of about 5%.
What we realised is that in this segment, the customer treats furniture as a very critical equipment. Furniture in any case is critical, but what happens specifically in case of healthcare is that the beds are where the patients get treated. So, in case there is any issue with the bed, there is a loss of opportunity to treat the patient and also a loss of revenue. This is something which makes the criticality of the equipment in this setup very high. The other thing which we found different in this particular segment was that the sales team is required to conduct multiple meetings. The main reason for this is that there are various stakeholders.
The sales team were unable to dedicate their time and attention for business development. This was because a lot of their time was getting spent in servicing the orders of the existing customers. The other challenge being faced was that the salespeople were responsible for both revenue and business development. So their focus was more on short term sales, rather than developing accounts for the future. The outcome of all this was that the sales team was late in entering the sales process. And hence it was then becoming more of a discussion of commercial negotiations, rather than helping shape the requirements of the customers. So as a result of this, the enquiry conversion was low. And the percentage of enquiries coming with good realisations was also low.
The crux of the problem, as we actually could clearly identify when we decided to launch this particular project, was that we need to make the bandwidth of the salespeople free for them to do business development work with clients. So, what we did was that we actually reduced their bandwidth from having to service the existing accounts and shifted the team’s focus and energy onto generating new requirements.
We found an interesting solution to this problem. We allocated the responsibility of servicing existing clients to a small pool of centralized resources. This created a win-win. Existing clients were happy that their requirements were being catered to in a more focused and an agile manner. At the same time, new clients could be given attention to. And that is how the business began to grow.
Yeah. So in fact, we have clearly stage gated the entire process of business development. And each stage is getting tracked – what are the leads? What is the conversion? How is the servicing happening? All these stages are getting tracked.
Yes initially, there was some resistance because at the end of the day sales by definition, I have also been in sales, we don’t like to be governed. So from that perspective, the feeling was that this is kind of a much more active monitoring. But the sales team soon started seeing the benefits, that how this monitoring was actually to support them to approach the customers in a more structured manner and get business. And in fact, it can keep giving them more and more business. Then they started feeling happy about it, and the adoption ramped up.
So, as a result of this particular project and the exercise, there was a sharp jump in terms of the new accounts from where the business was coming. There was also an improvement in the replacement business and repeat orders, which were coming from the existing customers because they were happy with the kind of service levels which were being delivered. And overall, we saw a significant improvement in the business. So, the business started jumping at a much faster pace. And naturally it started translating into higher market share.
View the top management of Godrej Interio, a business unit of Godrej & Boyce Mfg. Co. Ltd., speak about how they increased sales by 35% and doubled their market share in the healthcare business.
The biggest challenge here was that, for healthcare furniture, the business development process required multiple interactions with different stakeholders in a medical facility. Since, as in the case of most B-B environments, salespeople were in constant conflict between using their available bandwidth to service current orders and getting new orders, developing new accounts was mostly forced to take a backseat. However, the company was able to resolve this conflict and released capacity from the existing team itself for business development.
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