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Why embracing Commercial Excellence is not optional

3rd August, 2021

Commercial Excellence web Cover

As a concept, commercial excellence has been around for a few years now.

It describes aligning a whole organisation in the same direction, with a focus on the end customer (where “customer” is the retailer or wholesaler who sells your products, not the shopper who buys them or the consumer who uses them) to make sure that they get the right products, at the right time, at the right price for shoppers to buy them, and consumers to enjoy them.

As a concept, what I’ve described above seems relatively easy to understand doesn’t it? You’d think every business would be doing it. And many are.

I’ve worked in and with businesses who really want to embrace commercial excellence, but simply struggle to make it a reality. But it’s a struggle that appears to be worth it.

According to McKinsey,

"businesses with superior commercial capabilities consistently deliver revenue growth about 1.9 points higher than peers in the same sector"

..so it’s a concept that bears further examination.

So why isn’t every organisation embracing commercial excellence? Well, the short answer is “it’s complicated”.

Even before the pandemic, fixed ways of doing business were less and less effective

For years different functions have had their own processes, targets, and ways of working, and things become engrained. Everyone is doing their best, and everyone believes they are working towards the same goal, but things have been happening the way they are happening for years, with the result that although everyone started from the same point, where they are now, and what they are working towards can be very different, and in many cases contradictory.

But it’s increasingly clear that not adopting commercial excellence is no longer an option. Even before the pandemic, fixed ways of doing business were less and less effective, as markets, customers, shoppers, and consumers changed what they wanted, when they wanted things, and how they wanted things to be delivered.

Businesses that are more focused, more fluid, and more collaborative are those that will emerge successful

Organisations set up to keep doing what they’d always done were finding themselves left behind. As the pandemic hopefully recedes, there will be legacies in the form of permanent changes that will need to be adapted to. Businesses that are more focused, more fluid, and more collaborative are those that will emerge successful.

It’s important to state that no two businesses are the same, and so one size most definitely won’t fit all, but we’ve worked with many businesses to help them implement commercial excellence, and wanted to share some of the challenges we usually face, and then how we’ve addressed them.

It’s commercial excellence, not sales excellence

Sales excellence is important but is almost the end of the commercial excellence process, and not the process itself.

Sales provide the voice of the customer and the shopper back into a business, as well as being the function charged with selling products into customers that meet their and their shopper’s needs, but they play just one part of commercial excellence.

Instead, everyone has to be involved in commercial excellence; sales, marketing, supply chain, finance, and IT, just to name a few. It’s only by involving all the functions that a business can truly get to commercial excellence, with every function clear on the role they play in delivering for the customer.

But isn’t the customer the job of sales?

Building the need across the whole organisation is often the biggest challenge to implementing commercial excellence. The first part of this is helping each function understand the importance of focusing on the customer, and then helping them to understand their role in that focus.

Only by demonstrating the benefits to them and their function of a focus on the customer, can people start to understand what it means for them, and why they should adopt it.

Aren’t we already excellent?

The definition of commercial excellence will be different for every organisation, so the next step is to define exactly what it looks like. This involves looking inward; what is currently being done well in a market or function that can be re-applied? Then we look outward. Who is doing well in the category, in the sector, and what are they doing to win? And what can we learn from other sectors?

Once we have this understanding, we work with the business to create a simple framework of commercial excellence that it right for that business, not just a generic definition that might not work for them. Often this framework may be 6-8 steps, but there is no hard and fast rule – it’s whatever works for that business.

How do we measure up?

Once we know what we are aspiring to, the next step is to understand performance against that definition. This can take many forms; interviews, surveys, assessments, but all with one aim, and that’s to get an idea of how a business is currently performing against the commercial excellence benchmarking.

We also try to make sure we capture as much verbal feedback as possible, as we find that this is where the richness lies, and really helps to bring context to scores.

What’s the plan?

Assessment complete, we are then able to work with the business to develop the commercial excellence plan. Which areas of commercial excellence should we focus on, in what order, and in which markets? What do we have already that can be reapplied, what do we need to develop to address the needs highlighted in the assessment?

This can be a huge task but is vital. Getting a global and then market level view of what needs to be done, using what tools to build capability and ways of working, and how it comes to life in each function ensures that the rubber hits the road, and that an organisation starts on the journey to commercial excellence.

Commercial excellence is a passion point for us, and we have experience of helping organisations to adopt and embed it across a variety of sectors.

A major difference to our approach is a focus on the people involved, understanding what is important to them, and why they do things the way do, so that we can understand how to change their behaviour, because ultimately it’s the people that make an organisation commercially excellent, not tools or processes, and so it’s people that should be our focus.

Want to talk commercial excellence? Please get in touch to find out more about the right approach for your organisation – we’d love to talk.

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