Commercial Performance Optimization: targets and expectations

1. Define your targets

One of the first steps in CPO is defining your commercial targets and expectations. This includes setting specific, measurable goals. For example, you may want to increase sales or margins by a certain percentage, or reduce costs by a specific amount. These targets should be realistic and achievable, but also ambitious enough to push your business forward. 

However, just stating that you want to increase revenue by, say, 5%, isn’t enough. You also need to know how to get there. Will you raise prices by 5%, launch a new product, attract new customers, or focus on up- and cross selling?  Setting relevant KPIs is crucial here. 

How? The key is to take a bottom-up approach. For example, if your goal is to increase overall revenue by 5%, you first need to know the average revenue per customer. This will tell you how many new customers you’ll need to reach your goal, and which actions – e.g., sales or marketing campaigns you can take. 

Of course, when setting KPIs, you also need identify the right customers for you, consider sales velocity, pipeline management, etc. You’ll quickly find that KPIs are communicating vessels, and changes to one will have an impact on others as well. An external expert view can help ensure you don’t overlook anything. 

3. Take action / make data-driven decisions

By identifying the gaps, you’ll know what to measure, and which actions are required to get closer to your goals. For example, to increase repeat purchases from customers, rail service provider NMBS started by identifying specific customer segments – like business travelers. These could then be targeted based on their preferred channels – website, phone, app, etc. – and purchasing behavior. 

Another example? As a B2B company working with independent partners, garden tool manufacturer STIHL Benelux knew little about its end users. To learn more about Belgian customers, the company combined a number of basic data sets, including transactional data, a dealership survey, and… the volume of gardening waste collected in certain areas. Armed with this info, STIHL could identify where new dealerships were needed. 

4. Track your progress

When certain actions have been taken, the next step is to track your progress and make adjustments as needed. One way to do this is through regular reporting, e.g., spotting trends or patterns in monthly sales figures. This enables you to optimize your commercial activities and achieve your targets more efficiently. 

In this way, CPO makes your sales, marketing and customer service departments measurable and steerable, enabling your business to address customer and market challenges swiftly.