Gaining Competitive Advantage by Investing Smartly in Sales Channels

Oct 25, 2012, 11:30 ET from Detecon International GmbH

COLOGNE and ESCHBORN, Germany, October 25, 2012 /PRNewswire/ --

A Detecon study on Sales Performance Management illustrates how mature mobile carriers are in terms of allocating the right market investment budgets to their sales channels.

Value-based Sales Performance Management offers mobile carriers a competitive advantage. For companies in maturing and mature markets, focusing sales channel investments along a sustainable, value-based strategy offers more benefits than concentrating on volume-driven tactics. The improvements can clearly be seen in Key Performance Indicators such as Customer Lifetime Value (CLV) and Return on Market Invest (ROMI) which compares the net revenues a customer will yield over their lifetime to the investment to acquire or retain them respectrively, according to experts from Detecon Consulting who completed the Detecon Sales Performance Management Maturity Study 2011. The study looked globally at 28 wireless carriers.

The results of the study show that companies must prove themselves in an increasingly competitive market, though value- and profit-oriented Sales Performance Management are finding increasing acceptance. However, many companies haven't yet conducted sufficient value-based analyses to gauge their potential - they create strategies primarily on volume- or revenue-based indicators, some of them tainted by incomplete data and generated through only partially automated processes and IT systems.

Sustainable improvement in market position

As proven by Detecon's project experience, the introduction of a value-oriented approach to Sales Performance Management leads to lasting improvements in EBITDA margins of between 6 percent and 9 percent. ROMI and CLV can also increase by as much as 6 percent and 12 percent, respectively. Value-oriented Sales Performance Management offers a promising strategy to tackle growing sales OpEx in increasingly saturated markets. This includes the negative effects of flatrates and sinking Average Revenue Per Unit (ARPU).

The Detecon study shows that only half of the companies in competitive mobile markets have results- or value-oriented Sales Performance Management approaches. "Some wireless carriers in maturing and mature markets miss out on value creation by falling short of applying sales performance management approaches mature enough to handle their respective market and competitive situation", says Daniel Joisten, Consultant at Detecon International and Head of the Value-based Sales Performance Initiative. The remaining providers will have to significantly increase their orientation to profit and value to remain competitive. Value-based Sales Performance Management that increasingly takes indicators such as CLV, ROMI and Value Added into account offers management more control. Sales channels and organizations can be optimized and customized to actual market conditions with the help of a potential value analysis. This analysis can also include core components of company strategy and creating sustainable growth.

The results of Detecon's Sales Performance Management Study 2011/12 are available at:

Detecon International GmbH

Detecon is one of the world's leading consulting companies for ICT management consulting. Our services focus on consulting and implementation solutions which are derived from the use of information and communications technology (ICT). They encompass classic strategy and organization consulting as well as the planning and implementation of complex, technological ICT architectures and applications. Detecon's expertise bundles the knowledge from the successful conclusion of management and ICT consulting projects in more than 160 countries. Detecon is a subsidiary of
T-Systems International, the business customer brand of Deutsche Telekom.

For additional information, go to:

Press Contact
Detecon International GmbH
Gerhard Auer
Sternengasse 14-16
D-50676 Cologne
Phone: +49-221-9161-1013
Fax: +49-221-9161-1017

SOURCE Detecon International GmbH