Transforming sales into gatekeeping.

As demand heats up and opportunities abound, it's important to remember that keeping out accounts and jobs that do not fit the company is every bit as important as nurturing compatible accounts and winning compatible business. And it is up to the marketing and sales staff to take on that responsibility and act as the metalcasting operation's gatekeeper.

First and foremost, gatekeeping means, simply, that the sales staff should not call on non-compatible accounts and should not quote non-compatible jobs (unless they represent a small fraction of a large package of compatible work which must be quoted as a complete unit). This directive, in turn, requires a fastidious prospecting effort, a careful new account screening process and a highly selective quoting process (the latter holds true for RFQs submitted by both new and existing accounts).

Second, gatekeeping requires that metalcasting sales staffs work hard to continuously improve the compatibility of accounts already in their customer bases. This implies an emphasis on value-based relationship selling and active account maintenance, a solid account rating system, active efforts to improve the compatibility of borderline accounts and separation from customer accounts that are not, and likely never will be, sufficiently compatible. Note that the definition of "sufficiently compatible" will change over time--the standard will increasingly rise and the definition will increasingly narrow. This is the ideal scenario.

While the notions of "firing" customers and passing up opportunities to quote may strike some as heretical, the truth is that fine tuning the fit between customer base and capabilities--through the lens of compatibility--can have profound, albeit sometimes difficult to see, benefits. In fact, acting in concert with the principle of compatibility will set off a highly positive chain of events, which runs something like this:

* gatekeeping decisions are properly made, increasing numbers of RFQs are "no quoted," prospects and leads are more often bypassed, non-compatible accounts are fired, etc.

* revenues may fall in the immediate term, but profits often will increase as the metalcasting facility takes control of its destiny, its product mix (range of castings being produced) and its customer base.

* the number of quotes processed often decreases dramatically as more and better attention is paid to the compatible ones that remain and quote hit rates rise significantly.

* the product mix is narrowed as the fit between plant capabilities and customer requirements is tightened.

* efficiencies and productivity increase through greater consistency of product and process.

* quality costs decline dramatically as problem jobs are eliminated and variations in product and process diminish.

* the effect is an overall decline in time and cost. Past dues disappear, and available capacity expands. The firm becomes more competitive and able to take on more compatible work without any investment in plant or equipment.

* the business avoids falling into the mature industry cash trap. Overall company return on investment and shareholder value increases.

* better casting facility performance, greater cash availability, increased capacity, a smaller cost structure and enhanced pricing flexibility lead to a more powerful and successful sales effort and a healthier bottom line.

* success breeds more success. New compatible accounts and business are attracted, and the cycle repeats itself.

Even with the industry's shift from growth to maturity and the impact of foreign competition, there are still billions of dollars worth of metal castings sourced from and purchased in North America every year. Given this vast market, it is more than financially possible for metalcasting facilities to be highly selective in the way they sell and do business. Incorporating gatekeeping exposes flaws in the firm's business strategy so they can be corrected and allows top management to accept full control of and responsibility for the firm's success or failure. In other words, the metalcasting facility will be able to wrest control of its business--and its success--away from a capricious market and hand it back to its own management organization.

As implied above, the results can include a much improved market position (albeit in a narrower market segment), greater insulation from competition (i.e., better differentiation), a healthier bottom line, and a snowballing success effect for the sales effort and the enterprise as a whole. This cascading effect is set off by the combination of harmony, compatibility and a mature selling effort, and defines the term "marketing"--a strategy so successful that selling per se is no longer required.

I have seen this cycle happen and this ideal state of affairs reached in each and every turnaround client. It's a powerful lesson that all CEOs should heed.

Dan Marcus, TDC Consulting Inc., Amherst, Wisconsin