14 SFM Sales Manager & Sales Rep Training

Sales Funnel Management
August 3-4, 2006

Sales Rep Training
MAKING PROGRESS POSSIBLE

SFM Training Agenda

08:30 08:35 Morning Coffee
08:35 08:45 Introductions
08:45 11:00 Sales Funnel Management
-Overview
-Key Concepts
-Funnel requirements and procedures
-Weekly Review with Sales Mgr
11:15 12:15 Application: Adding an opportunity
12:15 13:00 Lunch
13:00 14:00 Application: Add top 3 opportunities
14:00 15:00 Application: Changing a stage, Change information in
top 3 opportunities
15:00 17:00 Enter ALL opportunities from “Black Book” into
Application
Page 2
2005
$20,192,518,050
205,134 -- Units
1,641,072 -- Approx. # of Opportunities
27,815 -- Approx # of Optys/Dealer
28 -- Approx # Optys/Week/Salesman
Page 3
Any idea?
2010---$50 Billion
2020---$100 Billion
Page 4
Dealer Characteristics Encountered
 34% Participation rate
 70% Close rate
 50% of salespersons time spent on non-selling activities
 80% of customers on salespersons call list not in market
 No complete view of their sales Funnel
 Marketing tend to concentrate on advertising/promotion only

– No Accountability
– Limited Segmentation
– Limited metrics to manage campaigns
Page 7
Critical SFM Message

 What is an opportunity ? – A
revenue producing event
associated with an account
 All Opportunities enter the top of

funnel and exit the bottom of funnel Identification
Qualification
 All Opportunities are contained
within the funnel
Development
 All Opportunities are managed to Proposal

stage and exit criteria
Closed
Page 8
We all have a different view of the sales funnel
SALES BUSINESS FORECAST

QUOTAS PLAN
Identification
Identification Identification
Qualification
Development
Qualification Qualification
Proposal Identification
Clo
sed Qualification
Development Development
$ Development
Proposal
Clo
Proposal Proposal
Identification
sed
Qualification Close Close
$
Development d d
Proposal
Clo
sed
District Office View

Sales Representatives View Sales, Marketing and Product Manager (Machines, Service, Parts, Finance,
View Orders, Inventory)
(Machines, Service, Parts, Finance,
Orders, Inventory)
Page 9
What is Sales Funnel Management?

Definition:
 Sales Funnel Management is the
quantitative correlation and management
of Participation and Close Rate to meet
Business Plan
Key Elements:
Identification
 Weekly 20 minute opportunity review
between sales manager and sales Qualification
representative
Development
 Weekly 20 minute Dashboard review
between sales executive, sales manager, Proposal
marketing manager and product
manager Closed
 Weekly 20 minute Dashboard review
between Dealer and District
$
 All opportunities recorded and managed
through sales stages via stage exit
criteria
Page 10
Sales Funnel Management Overview

Business and
Functions Campaign Opportunity Pipeline
Planning Management Management
Funnel Ratio January February March April May June July August September October November December
Opps needed from Mrkg 20% 3 1 12 14 20 21 34 20 26 25 26 25 34 28
Opportunities needed from Mrkg to meet BP 0 0 0 0 0 0 0 2 25 25 34 28 TOTALS
Stage 1 - Identification 11 11
Stage 2 - Qualification 5 5
Oppty from Mrkg

Stage 3 - Development 10 10
Stage 4 - Proposal 1 1 2
Total open opportunities in funnel 0 0 0 0 0 0 0 27 1 0 0 0 28
Stage 5 - Closed Won 2 2 4 14 22 9 53
Stage 6 - Closed Lost 1 3 1 2 5 3 3 18
2006 BPM NOTE - Cells with Yellow background
Stage 7 - Closed No decision 8 53 22 6 11 1 6 2 109
NOTE - Cells with blue background 0 0 0 0 -18 0 -26 53 -73 -75 -107 -87
<<Enter Dealer require data entry are calculations Opps needed from Sales 80% 2 1 26 29 42 45 73 44 57 54 55 54 73 60
Opportunities needed from Sales to meet BP 0 0 0 0 18 0 26 -55 48 50 73 60 TOTALS
Name>> Industry Units, Business Plan PINs Stage 1 - Identification 5 5
2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 Stage 2 - Qualification 38 2 40
Oppty from Sales

BCP-CCE 1,000 1,500 1,500 1,500 150 150 150 150 15% 10% 10% Stage 3 - Development 24 4 2 30
BCP-Core 1,100 1,500 1,500 1,500 150 150 150 150 14% 10% 10% Stage 4 - Proposal 40 1 41
CMI-Core 1,200 1,500 1,500 1,500 150 150 150 150 13% 10% 10% Total open opportunities in funnel 0 0 0 0 0 0 0 107 7 2 0 0 116
CMI-Large 1,300 1,500 1,500 1,500 150 150 150 150 12% 10% 10% Stage 5 - Closed Won 24 20 34 42 30 26 17 1 1 195
CMI-Specialty 1,400 1,500 1,500 1,500 150 150 150 150 11% 10% 10% Stage 6 - Closed Lost 12 12 6 6 10 46
Total 6,000 7,500 7,500 7,500 750 750 750 750 10% 8% 8% Stage 7 - Closed No decision 3 8 19 27 34 14 8 113
January February March April May June July August September October November December TOTALS
2006 Plan
Industry Plan 90 100 145 155 250 150 195 185 190 185 250 205 2100
% on % have
% Business Plan 18 20 29 31 50 30 39 37 38 37 50 41 420
SPAR/ CSA / % RPO
Financing YTD Business Plan 18 38 67 98 148 178 217 254 292 329 379 420
Focus MARC YTD Closed Won 24 46 82 128 172 220 246 247 247 248 248 248
BCP-CCE 150 150 150 150 SPAR = Special Pricing Assistance Request YTD Closed Won Variance 6 8 15 30 24 42 29 -7 -45 -81 -131 -172
BCP-Core 150 150 150 150 CSA = Customer Service Agreement
Identification Closed Won 24 22 36 46 44 48 26 1 0 1 0 0
per month
Actual
CMI-Core 150 150 150 150 MARC= Maintenance And Repair Contract
Closed Won Variance 6 2 7 15 -6 18 -13 -36 -38 -36 -50 -41 -172
CMI-Large 150 150 150 150 RPO=Rent to Purchase Option
Actual Industry 106 89 160 176 202 168 110 0 0 0 0 0 1011
CMI-Specialty 150 150 150 150 PINs (Target PINs) 20% 22.6% 24.7% 22.5% 26.1% 21.8% 28.6% 23.6% 0.0% 0.0% 0.0% 0.0% 0.0%
YTD PINS 22.6% 23.6% 23.1% 24.1% 23.5% 24.4% 24.3% 0.0% 0.0% 0.0% 0.0% 0.0%
BCP-CCE BCP-Core CMI-Core
Funnel Management Assumptions Source of Business Source of Business Source of Metrics January February March April May June July August September October November December
Field Sales (sales reps)

Close Rate
50%
Participation
50%
Sales
91%
Plan Units
341
Close Rate
50%
Participation
50%
Sales
91%
Plan Units
341
Close Rate
50%
Participation
50%
Sales
91% Qualification Close Rate - current month
Close Rate - YTD
96%
96%
88%
92%
73%
83%
77%
81%
80%
80%
84%
81%
67%
79%
0%
79%
0%
79%
0%
79%
0%
79%
0%
79%
Inside Sales (Counter, telephone, email) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1% Participation Rate - current month 24% 28% 31% 34% 27% 34% 35% 0% 0% 0% 0% 0%
Caterpillar (website, corporate, district) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1% Participation Rate - YTD Target ______ 24% 26% 28% 30% 29% 30% 31% 0% 0% 0% 0% 0%
Direct Mail 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Call Center 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Travel Events (invitation) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Local Events (invitation)
e-mail, website
50%
50%
50%
50%
1%
1%
4
4
50%
50%
50%
50%
1%
1%
4
4
50%
50%
50%
50%
1%
1%
Development
Local Events (open) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Trade Shows (open) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Tools Opportunities by Stage

Inside Sales (Counter, telephone, email)
Caterpillar (website, corporate, district)
BP-What if
Funnel Ratio
3
3
3
Stage 1
1,024
11
11
0
BCP-CCE
100%
Stage 5
341
4
4
375
Stage 6
341
4
4
BP-What if
Funnel Ratio
3
3
3
Stage 1
1,024
11
11
0
BCP-Core
100%
Stage 5
341
4
4
375
Stage 6
341
4
4
BP-What if
Funnel Ratio
3
3
3
Stage 1
1,024
11
11
0
CMI-Core
100%
Stage 5
341
4
4
Proposal
Quota CGI-ZA
Region
Cat Code
CusNo
Customer
Mkt Cat
Model
(All)
CGI
(All)
(All)
(All)
(All)
BEC Code (All)
Direct Mail 3 11 4 4 3 11 4 4 3 11 4 Salesman (All)
Call Center 3 11 4 4 3 11 4 4 3 11 4 Brand (All)
Travel Events (invitation)

3
3
11
11
4
4
4
4
3
3
11
11
4
4
4
4
3
3
11
11
4
4
Closed Family
Sum of Qty
(All)
Month
BE Group Jun/05 Jul/05 Aug/05 Sep/05 Oct/05 Nov/05 Dec/05 Jan/06 Feb/06 Mar/06 Apr/06 May/06 Jun/06 Jul/06
e-mail, website 3 11 4 4 3 11 4 4 3 11 4
AT 11 8 4 9 3 4 2 12 15 9 7 14 8 6
Local Events (open) 3 11 4 4 3 11 4 4 3 11 4 CRS 1 1 1
Trade Shows (open) 3 11 4 4 3 11 4 4 3 11 4 DRL
FM 2 1 1 1
Total 1,125 1,125 1,125 GP 6 6 5 3 3 3 9 10 4 11 13 8
HT 4
LHEX 3 2 2 1 3 1 4 3 3
LWL 3 1 1 1 1
Annual Contacts to Make Oppty

BCP-CCE
Generation Contact Rate

Rate
Number of
Targets to
Contact
Marketing
Spend
Oppty
Generation
Rate
BCP-Core
Contact Rate
Number of
Targets to
Contact
Marketing
Spend
Oppty
Generation
Rate
CMI-Core
Contact Rate
Number of
Targets to
Contact
$ MG
MHEX
MSWL
OHT
TTT
WD
3
8
10
3
13
6
17
1
7
4
8
10
1
5
4
12
12
3
7
7
3
13
5
5
4
5
4
1
2
1
2
1
4
5
16
7
9
13
15
3
7
6
6
10
3
5
4
5
5
8
12
9
5
3
10
19
1
8
7
6
9
2
9
Field Sales (sales reps) 10% 90% 3,792 $0 10% 90% 3,792 $0 10% 90% 3,792 Grand Total 40 60 44 52 35 25 9 50 77 50 31 64 63 52
Inside Sales (Counter, telephone, email) 20% 50% 38 $100 20% 50% 38 $100 20% 50% 38
Quota GC-ZA
Caterpillar (website, corporate, district) 1% 10% 3,750 $100 1% 10% 3,750 $100 1% 10% 3,750 Region (All)
Direct Mail 5% 80% 94 $100 5% 80% 94 $100 5% 80% 94 Cat Code GC
CusNo (All)
Call Center 5% 20% 375 $100 5% 20% 375 $100 5% 20% 375 Customer (All)
Mkt Cat (All)
Model (All)
BEC Code (All)
Salesman (All)
Brand (All)
Family (All)
Sum of Qty Month

BHL 51 55 56 50 58 61 34 57 63 56 47 50 55 41
CWL 3 2 2 3 3 2 2 3 1 3 2
MHE 4 4 2 3 1 2 5 1 6 1 3 4 1
SSL 13 13 6 5 14 14 5 6 15 9 4 9 11 15
STEX 2 5 6 3 2 1 1 3 5 5 3 1
STT 4 1 3 1 3
SWL 4 3 1 4 7 4 4 3 7 4 5 4
TH 1 1 1 1 1 1 4
WEX 1 1 1
Grand Total 74 81 81 57 84 86 45 77 87 82 67 74 85 68
 Sales Rep
 Sales Manager
 Sales Manager
 Sales Rep  Marketing Manager
Roles  Marketing Manager
 Sales Manager  Product Manager
 Product Manager
 Marketing Manager  Sales VP
 Sales VP
 District Rep
 District Manager
Page 11
SFM process
Representative
Sales
Sales
Opportunity
meeting
data entry
preparation
Sales
Manager
and Sales
Rep meeting
Manager
Sales
New
opportunity
Meetings and activity
analysis and assignment
review
Marketing
Manager
Business
Marketing
Team
Planning
Meeting
Manager
Product
Demand
planning
Executives
Sales
Executive
Meeting
Region
Manager
District
Meeting
Page 12
There is not a lot that has to be done, but what has to be done, HAS TO BE
DONE
Has To Be Done
Sales Representative Sales Manager Marketing Manager Sales Executive District (Area)
Office
Record and manage all Review every sales Develop integrated Review Dashboard with Review Dashboard with
opportunities to stage and representative’s funnel marketing and opportunity Sales, Marketing & Dealer monthly (weekly
exit criteria once per week supply plan Product Manager once per during implementation)
week
Close all opportunities to Intervene for assistance on Generate opportunities to Review Dashboard with Manage supply to demand
won, lost or no deal individual opportunities meet opportunity supply District monthly (weekly & S&OP
plan during implementation)
(Dealer Comments) If we do what has to be done, then we realize:

 A Forwarding looking view of Opportunities vs. Business Plan
 Ability to calculate “Actual” Deal Participation
 Identification of potential Gaps in Sales Coverage
 Identification of areas for focused marketing investment
 Ability to measure return on marketing investment
Page 13
Seven steps to implement
Establish Plan Train and Implement Drive adoption
1 2 5 6
District &
Preparatory
Dealership Attend first four weeks of
scheduling, a) Train Sales Executive, Sales
commitment meetings:
assure Manager, Marketing Manager
to scope
The quotas and Product Manager
individually
a) Sales Executive / Sales,
Product & Marketing
seven 3 b) Train Sales Representatives, Manager meetings
Sales Administrators and
steps Arrange logistics,
commit resources Marketing Administrators b) Sales Manager /
• Group sessions Representative meetings
to SFM and schedule
training • Load all known
opportunities at this time c) Dealership / District
Office meetings
4 c) Train District Management
Schedule all meetings: individually Generate first four weekly
• Sales Executive dashboards
• Sales Managers
• Marketing Manager
• Product Manager
Living Documents
• Business Plan • Integrated Campaign Plan/Individual Quota Plan • Dashboard 7

Manager
Page 14
Results from 2 other Dealers

 PINS = Closed Won / Industry
= Close Rate X Participation Rate
= CW X (CW+CL)
(CW+CL) Industry
= Closed Won / Industry
 One must either move the close rate or move the participation rate to change PINs
 NACD Example (Pulling the Participation Lever)

Prior to SFM After SFM (Dec 05)
PINs = 16 PINs = 24 50% change
Close Rate = 60% Close Rate = 59%
Part. Rate = 27% Part. Rate = 41%
 EAME Example (Pulling the Close Rate Lever)

Prior to SFM After SFM (Dec 05)
PINs = 24 PINs = 28 17% change
Close Rate = 32% Close Rate = 53%
Part. Rate = 75% Part. Rate = 53%
Page 15
SFM tools and concepts
Sales, Product
Sales Executive
3 key weekly Sales Manager & Marketing
reviews
reviews Managers
meetings Dashboard with
opportunities review
District Office
with Sales Rep Dashboard with
Sales Executive
Sales Stages Buyers Questions
Stages:  Technical (Evaluator)  Handouts (1 page)

1) Identification  Economic (Decision Maker) – Self questions
 User (User) – Help questions – from sales
2) Qualification manager
3) Development &  Coach (Approver)
Negotiation
4) Proposal
Exit Criteria & Activity Plans Supporting tools
5) Closed
 Handouts (1 page)  BPM
– Won  Handouts
– Exit Criteria by stage
– Lost  Opportunity management application
– Activity Plans by stage
– No deal
Page 16
Buyer types
Final Decision
Technical Buyer Economic Buyer User Buyer Coach

(Evaluator) (Decision maker) (User) (Approver)
Only one allowed
Production or maintenance
Large Customer
to sayPurchasing
yes.agent CFO or Owner
superintendent
Equipment superintendent
Small Customer
Owner or purchasing agent Owner Operator Operator
(could be one person)
If we inherit the customers value

Can only recommend, does not
Allowable Decision have decision. (At some customers
Can only say no. Only one allowed to say yes.proposition
Can only say no. then we have lost. If
Making the User Buyer and Coach may be
the same person)
we can create the value
Meets bid specifications at target Profit. Bonus attached to
proposition then wePromotes
Meets owning and operating
can thewin.supplier that best
Motives meets the needs of the Technical,
prices. profitability. Minimizing risk. requirements.
Stage 2 (Qualification) Economic and User Buyers.
Can only say no. Can only say no.

Meets bid specifications at below When product and service
Recognized by the three buyers as
Benefits target price. Exceeds bid Profit goal is exceeded. exceeds owning and operating
mentoring the best solution.
specifications at target price. requirements.
Not completely understanding bid Historically too much time is spent

specifications. If we inherit the customers Not completely understanding with this person and believed
value proposition then we have owning and operating everything he/she said. The coach
Where we tend to get Proactive sell: Stage 2 lost. If we can create the value requirements at Stage 2 is great for obtaining customer
caught (Qualification) and Stage 3 proposition then we can win. (Qualification) and Stage 3 network access but poor for
(Development)
Stage 2 (Qualification) (Development) obtaining decision making
Reactive Sell: Stage 4 (Proposal) information.
Page 17
Identification Stage 1
Entrance Criteria: Customer uses our type of
product or our type of service and is willing to Potential KPIs:
work with us 1. Velocity
2. % disqualified by source /
Opportunity movement: market segment etc..
Disqualify (close no deal) 3. % won by source/ market
segment etc...
1. Does not wish to work
with us (or vice versa)
2. We cannot satisfy Identification
their requirements
Qualification
3. They have no reason
to act Development Exit Criteria
Promote 1. Customer is in market
Proposal
1. Have completed the 2. Customer is willing to have
exit criteria Dealer Sales Person call on
Closed
them
3. Customer has reason to buy
within a specific time frame
Page 18
Qualification Stage 2
Entrance Criteria = Stage 1 exit Potential KPIs:

criteria 1. Velocity
market segment etc..
Opportunity Movement:
3. % won by source/ market
Demote
segment etc...
1 Customer or us have issues
with reason to buy, working
with use or if he is in market
disqualify / Close Identification
1. Does not wish to work with us
(or vice versa) Qualification Exit Criteria
2. We cannot satisfy their 1. Identify buyers/influencers
requirements Development
2. Business requirements are
3. They have no reason to act
Proposal identified (prospects needs)
Promote
3. Dealer solution type &
1. Have completed the exit Closed
criteria
application is identified
4. The customer decision process
is known
5. Initiate Financial
discussion/payment type
Page 19
Development Stage 3

market segment etc..
3. % won by source/ market
Opportunity Movement: segment etc...
Demote
1 Customer or us have issues
with Identifying buyers,
business requirements, solution
type, decision process or Identification
Exit Criteria
Initiate Financial
discussion/payment type Qualification 1. Customer verbally commits
Disqualify/Close to solution
Development
1. Does not wish to work with us 2. Solution (Price,
(or vice versa) Configuration, Delivery
Proposal
2. We cannot satisfy their Time, T/C) is developed and
requirements orally agreed to by the
Closed
3. They have no reason to act buyer/influencer
Promote 3. Non-standard contract
1. Have completed exit criteria terms are resolved
Page 20
Proposal Stage 4

Opportunity Movement:: market segment etc..
Demote 3. % won by source/ market
1 Customer or us have segment etc...
issues with solution,
verbal committment, T/C
Disqualify / Close
Identification
1. Does not wish to work
with us (or vice versa) Exit Criteria
Qualification
2. We cannot satisfy their
requirements 1. Customer buys Thompson
Development
3. They have no reason to 2. Customer buys competitor
act Proposal
3. Customer does not buy at
Promote all
1. Have completed exit Close
criteria
Page 21
Closed Won Stage 5, Closed Lost Stage 6, Closed No Deal Stage 7
Entrance Criteria = Stage 4 exit

criteria
Opportunity Movement:
Closed - Won
Proposal is accepted & signed Identification
Closed - Lost KPIs:
Qualification
Competitor’s proposal is
1. Funnel Ratio
accepted & signed
Development 2. Close Rate
Closed – No Deal
3. Participation Rate
Customer is not going to buy Proposal
from anyone
Closed:
Won
Lost
No Deal
Page 22
Entrance & Exit criteria – Before stage assignment, an opportunity

has to meet specific criteria
Stage Exit criteria
Enter the Funnel  (Entrance Criteria) – Customer uses our type of product/service & is willing to work with us
 Customer is in market
1  Customer is willing to have Dealer Sales Person call on them
Identification  Customer has reason to buy within a specific time frame
 Promote or Close
 Identify buyers/influencers
 Business requirements are identified (prospects needs)
2  Dealer solution type & application is identified
Qualification  The customer decision process is known
 Initiate Financial discussion/payment type Value Proposition Established
 Customer verbally commits to solution
3  Solution (Price, Configuration, Delivery Time, T/C) is developed and orally agreed to by the
Development & buyer/influencer
Negotiation  Non-standard contract terms are resolved
 Customer buys Thompson
 Customer buys competitor
4 Proposal
 Customer does not buy at all
5 Close Won  (Entrance Criteria) Customer signed the formal paperwork
6 Close Lost  (Entrance Criteria) Customer signed formal paperwork with competitor
7 Close No Deal  (Entrance Criteria) Customer decided not to purchase anything from anyone
Page 23
Are there questions my Sales Manager will probably ask me?

Stage 1 Stage 2 Stage 3 Stage 4
Identification Qualification Development Proposal
 Have you contacted the  Who is the competition, what is their strategy?  Is the  Have
customer yet?  What is the status of your relationship with key contacts at the solution you
 Why has this not been customer? What steps do you need to take to build relationships here? fully delivere
promoted to stage 2?  What did the customer say to indicate that he is in market and what developed d the
 Who did you talk to when was his timeframe? ? If no, proposal
you called the customer? why not? ? To
 Why did the customer say you could not call on him/her? What do whom?
 What other accounts,  What are the names of the four buyers? you need
markets and/or prospects  Have
 Tell me why each buyer wants to deal with us? help on? you
are you targeting?
 What are the buying motives for each buyer? If you don't know them  Have you asked
 What are you doing to get all, when will you get them? reached for the
in touch with the key out to order
contacts at these  What is the customer's business requirements?
other yet?
accounts?  What are we positioning as a resolution to their issues? Have you resources
identified alternative solutions?  When is
 Have you used your at the their
network this week to  What is the customer decision process? (Who do we get verbals from? Dealershi decision
identify new opportunities Who gets paperwork? Do they require demos?) p for day?
in the market?  Have we offered the technical buyer bid specs so he/she does not have help?
 Have you looked at to develop their own? What did
inventory this week to  Have we offered the economic buyer price and performance they say?
identify high move ability guidelines?  What
items?  What is the product availability for this solution. Is product availability a don't we
 What Dealer/CAT pro or con for us in this opportunity? know
campaigns have given you  How are you going to socialize to the other buyers the contributions of about the
opportunities the coach? customer?
 What has your territory  What is the customers business requirement? Does this indicate a
knowledge identified in cash flow problem for him. Have we offered financing?
new opportunities?
 What are the risks to the dealer and to the buyer?
Page 24
Sales Representative & Sales Manager Meeting: Keep it quick, keep

it simple and remember everyone’s goal is the same – Meet Plan
Funnel
Shape
How can we What is

Calculate help with any closing this Funnel
number of opportunities month. How size
opportunities stalled? Should can we help,
needed to they be what more Funnel
meet plan disqualified needs to be velocity
(Exit Criteria) done
Both
parties
agree on
actions /
activities
for
resolution
Page 26
The number of closed won deals is a function of the number of

opportunities that are put into the funnel
Page 27
Key metrics
 These metrics are designed to work in concert with each other
 Used properly, they should guide more sales and management focus on earlier stages
of the funnel, where sales impact can be realized thru intervention
 A movement in one can often influence another:
– Movement in Participation will impact PINS
– Movement in Close Rate will impact PINS
Close Rate Participation

 Close Rate is the traditional, direct measure of sales  Measures a salesmen’s coverage of all transacted
effectiveness business within his territory
 Measures the closure of opportunities quoted  Participation Rate = (Closed Units Won + Closed Units
 Close Rate = Closed won / (Closed won + Close lost) Lost) / Total Industry Units
 Measured in units and $  Identifies the unrealized potential of a given territory
 Captures and trends sales force effectiveness  Correlates with Close Rate to derive PINS (PINS =
 Direct correlation with Participation to derive PINS Participation x Close Rate)
(PINS = Close Rate X Participation)
Page 28
Opportunity Management Procedures (Lotus Notes)

Step Opportunity Search Step Create Opportunity
1) Open call reports database 1) Open call reports database
2) Select opportunities view 2) Select a contact
3) Select opportunity 3) Select new call report
4) After call report is filled in and a new
opportunity is identified, then select
Step Update Opportunity new opportunity button
1) Open call reports database 5) Select new opportunity button
2) Select opportunities view 6) Fill in opportunity data: (Stage, Type,
3) Select opportunity Estimated Close Date, Sell Price, QTY,
Configuration, Comments)
4) Double click on selected
opportunity
5) Select edit document
6) Make selected updates
Page 29
Managers, Executives, District

August 3, 2006
Lessons learned:
• Document integrated marketing plan: start date,
targeted number of Oppty's to generate per
• Review weekly dashboard with
month and actual number of Oppty's generated
sales, marketing and
per month
managers
Executive Marketing
Management
Leadership
• Hold weekly cadence

• Review MPC (District Sales call with sales reps
monthly/weekly / Area Lessons Learned • Calculate by rep the
dashboard with Managers number of
Dealer
Manager)
opportunities
required to meet plan
I/T Manager Sales

Representatives
• Enter all opportunities into the funnel

• Assure data can be extracted • Manage opportunities to stage and exit
from application criteria
• Synchronize daily (if Client/Server
Architecture)
Page 31
Sounds nice, but what are the management decisions I must take and what
can it do for me
Decisions That Are Required
Dealer District
 Decide where the PINs are going to come from (investments in  Decide where the PINs are going to come from (investments in
marketing or investments in sales rep training) marketing or investments in sales rep training)
 Decide what amount of time sales reps will have to spend  Base allocation decisions on number of opportunities in the funnel
prospecting vs. qualifying & closing (prevents sandbagging)
 Decide where marketing investments will be made and how much  Decide where variable spend is going to be (price support,
will be made marketing or training)
 Decide if sales reps & sales managers are meeting base metric  Decide if SPARS will be allowed early in the sales process
targets (close rate, participation rate)  Decide where annual strategic coop will be used, early in the year
 Decide monthly quotas for sales reps and sales managers
Goals
Dealer District
 Meet business plan on a monthly basis  Predict month end units based on the number of opportunities by
 Order machines based on “Actual” market demand stage on day 1 of the month
 Manage inventory to demand  Predict strategic coop spend early in the year
 Forward looking view of Opportunities vs. Business Plan  Transfer variable spend from pricing support (SPAR) to marketing
 Ability to calculate “Actual” Deal Participation & Close Rate or training investment
 Calculate actual marketing spend required  Align Dealer pipeline and terminology to District pipeline &
terminology (one pipeline & one language)
 Identify potential Gaps in Sales Coverage
 Provide real market based demand (from opportunities) to
 Identify areas for focused marketing investment manufacturing
 Ability to measure return on marketing investment  Obtain visibility of long lead time items
Page 32
East: Monthly Plan
Sales Manager Doan

Sales Office (All)
Sales Region East
Count of Qty Month

Salesman Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Grand Total
Barton 4 8 5 4 1 1 1 2 26
Blake 3 4 2 11 7 10 5 4 3 49
Buster 1 6 3 2 13 3 4 11 2 4 49
Fisher 1 3 2 1 2 2 4 15
Haase 5 5 3 2 4 2 4 3 28
Hall 5 4 5 3 3 2 3 5 30
Houseright 6 8 1 3 2 2 1 23
Luster 10 4 4 7 3 9 5 6 7 2 57
Manning 2 7 4 5 4 3 4 7 36
McClary 4 3 3 1 2 2 1 16
Rental Fleet 2 2 3 3 2 10 10 4 1 37
Stephens 2 1 1 5 1 2 3 2 1 18
Steve J 7 5 1 4 3 5 4 2 3 34
Terhune 1 2 6 1 5 3 1 3 22
Walker 1 8 3 1 8 1 3 4 5 3 37
Wisniowski 3 4 5 3 2 2 4 4 27
Grand Total 4 2 54 28 29 106 55 65 53 37 44 27 504
Page 33
Sales Manager Weekly Meeting – Primary Questions
Goal Identify health of the funnel and make assistive Basics questions each week
intervention as necessary
Step 1 Review the number of opportunities in each stage and 1. Does sales rep know
identify if there are enough in the funnel his/her monthly quota
number?
Step 2 Review the opportunities that are stagnating in each
stage, identify any assistive interventions 2. Are there any opportunities
that are past their close
Step 3 Review specific activities to graduate opportunity to next date? Are all data fields
stage or to disqualify. Review closing activities complete
Step 4 Review closed won and closed lost for this time period, 3. Is opportunity source
review reason why correct?
Step 5 Review next week call plan, what is scheduled, what 4. Is product model identified?
should be scheduled? 5. Should any opportunity be
disqualified?
Page 34
Sales Manager Weekly Meeting – Secondary Questions

Stage 1 1. Have you contacted the customer yet? Why isn’t this promoted to stage 2 or disqualified? Who did
you talk to when you contacted the customer?
2. What are you doing to get in touch with other key accounts at the customer? Have you used your
network to identify new opportunities in the market? Has your territory knowledge identified any new
opportunities this week?
3. Have you looked at inventory this week to identify high move items?
4. What did the customer say to indicate that he is in market? What is their timeframe to buy?
Stage 2 1. What is the status of your relationship with key contacts at the customer? What steps do you need to
take to build the relationship?
2. What is the customers business requirement? Does this indicate a cash flow problem for him? Have we
offered financing?
3. What are we positioning as a resolution to their issues? Have you identified alternative solutions?
4. What is the customer’s decision making process? (Who do we get verbal from, who gets the
paperwork, do they need demo’s)
5. What is product availability for this solution? Is product availability a pro or con for us?
6. What are the risks to the dealer and the buyer?
Stage 3 1. Is the solution fully developed? If not, why? What do you need help on? What don’t we know about
the customer?
2. Have you reached out to other resources at the Dealer for help? What did they say?
Stage 4 1. Have you delivered the proposal? To whom? When is the decision day?
Stage 5, 6, 7 1. Is Reason closed complete?
Page 35
Executive Weekly Meeting: Preparation
1.Schedule weekly meetings with 1st line managers, on the calendar for entire year
2.Review Dashboards for each Country(Branch, Unit etc..)
3.Check to see Sales Manager/Sales Representatives Weekly review is scheduled and
occurring as planned
4.Develop as needed, information/data required to obtain District Support
Page 36
Executive Weekly Meeting: 4 questions

Funnel Ratio June July August September October November December January February March April May
Opps needed from Mrkg 0% 5.0 to 1.0 0 0 0 0 0 0 0 0 0 0 0 0
Opportunity variance from Mrkg to meet BP
Stage 1 - Identification
0 0 0 0 0 0 0 0 0 0
 Are we going to
0 0 TOTALS
0
Oppty from Mrkg
Stage 2 - Qualification
Stage 3 - Development
meet plan? 0
0
Stage 4 - Proposal  How many 0
Stage 5 - Closed Won opportunities are0
Stage 6 - Closed Lost
Stage 7 - Closed No Deal
we short/over? 0
0
Funnel Ratio  How many
Opps needed from Sales 100% 2.0 to 1.0 70 84 78 76 76 66 0 0 0 0 0 0
Opportunity variance from Sales to meet BP -43 -40 -63 -67 -73 -62 4 0 0 0
opportunities does
0 0 TOTALS
Stage 1 - Identification 9 19 10 8 1 3 3
marketing need to53
Oppty from Sales
Stage 2 - Qualification 7 8 2 1 1 1 20
Stage 3 - Development 5 7 1 give to sales? 13
 What is impeding
Stage 4 - Proposal 4 10 3 1 18
Stage 5 - Closed Won
Stage 6 - Closed Lost
1
new opportunity 1
0
Stage 7 - Closed No Deal 1 identification? 1
June July August September October November December January February March
(sales & marketing)
April May TOTALS
Industry Plan 108 108 108 108 108 108 648
Business Plan 35 42 39 38 38 33 225
Business Plan YTD 35 77 116 154 192 225 225 225 225 225 225 225
Closed Won 1 0 0 0 0 0 0 0 0 0 0 0
Closed Won Variance -34 -42 -39 -38 -38 -33 0 0 0 0 0 0
YTD Closed Won 1 1 1 1 1 1 1 1 1 1 1 1
Summary
YTD Closed Won Variance -34 -76 -115 -153 -191 -224 -224 -224 -224 -224 -224 -224
Actual Industry 0 0 0 0 0 0 0 0 0 0 0 0 0
PINs Target 20.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
YTD PINs 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Metrics June Feb Mar Apr May June July Aug Sep Oct Nov Dec
Funnel Ratio: Marketing Sourced 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Funnel Ratio: Sales Sourced 2.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Close Rate 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Participation Rate Target 30.0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Page 37
Executive Weekly Meeting: Primary Questions
1.Is the unit on track to meet business plan (Month/YTD) Why or Why Not?
2.Are all opportunities entered into the funnel?
3.How many opportunities are in the funnel?
4.How many opportunities are needed to meet business plan?
5.How many additional opportunities are needed to meet business plan?
6.How many from Sales?
7.How many from Marketing?
8.Are you working with Marketing to resolve opportunity deficits?
9.What should the shape of the funnel look like to meet business plan?
10.How are Funnel Ratios tracking with business plan?
11.How is YTD Close Won Variance tracking with the business plan?
12.How are PINS tracking with business plan?
13.How is Closed Rate tracking with business plan?
14.How is Participation Rate tracking with business plan?
15.Are you using SFM opportunities to forecast product?
Page 38
Executive Weekly Meeting: Secondary Questions
16. Are you working with Sales Coordinators to resolve product shortages? "
17. Are closed dates up-to-date?
18. Are there any stalled opportunities?
19. Are Exit Criteria being applied correctly opportunities stages?
20. Are Sales Representatives entering opportunity data correctly?
21. How accurate is the opportunity data?
22. How current is the opportunity data?
23. Why are Sales Representatives/Sales Manager/Sales Executive not synchronizing?
24. Have you scheduled your Sales Manager/Sales Representatives Weekly on your
calendar for year?
25. If Not, Why? When will the meetings be scheduled?
26. Is a meeting with each Sales Representatives occurring each week?
27. If Not, Why? When will It be corrected?
Page 39
Example: Dashboard, NACD Dealer – 7 months into implementation

Funnel Ratio January February March April May June July August September October November December
Opps needed from Mrkg 20% 3 1 12 14 20 21 34 20 26 25 26 25 34 28
Opportunities needed from Mrkg to meet BP 0 0 0 0 0 0 0 2 25 25 34 28 TOTALS
Stage 1 - Identification 11 11
Stage 2 - Qualification 38% of sales 5 5
Oppty from Mrkg
from Mktng
Total open opportunities in funnel 0 0 0 0 0 0 0 27 On
1 track0 for 0 0 28
Stage 5 - Closed Won 2 2 4 14 22 9 53
Aug. BP
0 0 0 0 -18 0 -26 53 -73 -75 -107 -87
Opps needed from Sales 80% 2 1 26 29 42 45 73 44 57 54 55 54 73 60
55
Shortfall Opptys 5 5
Stage 2 - Qualification 38 2 40
Oppty from Sales
Stage 3 - Development Shortfall BP 24 4 2 30

Stage 5 - Closed Won 24 20 34 42 30 26 17 1 1 195
Stage 6 - Closed Lost 12 12 6 6 10 46
Stage 7 - Closed No decision 3 8 19 27 34 14 8 113
Industry Plan 90 100 145 155 250 150 195 185 190 185 250 205 2100
Business Plan 18 20 29 31 50 30 39 37 38 37 50 41 420
YTD Business Plan 18 38 67 98 148 178 217 254 – Ind. 329
1292 Down 379 420
YTD Closed Won 24 46 82 128 172 220 246 247 247 248 248 248
YTD Closed Won Variance 6 8 15 30 24 42 29 -7 2-45– Sales
-81 Below
-131 BP -172
Closed Won 24 22 36 46 44 48 26 1 0 1 0 0
3-38– 24%-36PINS -50
per month
Actual
Closed Won Variance 6 2 7 15 -6 18 -13 -36 -41 -172

Actual Industry 106 89 160 176 202 168 110 0 0 0 0 0 1011
PINs (Target PINs) 20% 22.6% 24.7% 22.5% 26.1% 21.8% 28.6% 23.6% 0.0% 0.0% 0.0% 0.0% 0.0%
YTD PINS 22.6% 23.6% 23.1% 24.1% 23.5% 24.4% 24.3% 0.0% 0.0% 0.0% 0.0% 0.0%
Metrics January February March April May June July August September October November December
Close Rate - current month 96% 88% 73% 77% 80% 84% 67% 0% 0% 0% 0% 0%
Close Rate - YTD 96% 92% 83% 81% 80% 81% 79% 79%
Participation
79% 79% 79% 79%
Participation Rate - current month 24% 28% 31% 34% 27% 34% 35% 0% Increasing
0% 0% 0% 0%
Participation Rate - YTD Target ______ 24% 26% 28% 30% 29% 30% 31% 0% 0% 0% 0% 0%
Page 41
So then, how do I read a dashboard?
Page 42
Opportunities in the funnel for the

current month. (Stages 1 – 4)
Sales Stages for Opportunities

created by the Sales Reps.
Opportunities in the funnel for the

current month. (Stages 1 – 4)
Sales Stages for Opportunities

created by Marketing.
Business Plan: Number of planned sales per

month and for the year.
Closed Won Variance: Monthly difference in

actual sales vs. planned sales for the month.
Year-end total shows number of sales needed for
the remainder of the year to make business plan.
YTD PINS: Running total of PINS for the current

year based on manual industry sales input.
Page 43
Funnel Ratio is the is the number of Opportunities required to

enter the Sales Funnel in order to obtain a Closed-Won
Opportunity.
5
Identification
Qualification
Development
Proposal
Close
d
1
Funnel Ratio = (Closed Won + Closed Lost + Closed No Deal)
Closed Won
Page 44
Opportunities needed from Marketing or Sales
to make BP compared to actual sold:
This number tells you whether or not you have
sufficient opportunities in your funnel to meet
business plan for the month.
If the field is red, there are not enough

opportunities to meet plan. The number
indicates the extra opportunities needed to
meet business plan.
Opptys needed this month:

(Business Plan for Current Month)
X
(Funnel Ratio)
X
(Percentage Opptys needed from Marketing)
Opportunities Needed from Marketing

=
78 x 5 x 20% = 80
Funnel Ratio = (Closed Won + Closed Lost + Closed No Deal)

Closed Won
5 = 103 + 201 + 223

103
Page 45
This is a dynamic calculation based on Closed Totals for the year
and also change as more Opportunities are closed.
Analyses 1 – When and how do we intervene

August 2006

There are 24 possible funnel scenarios, however only 18 of these scenarios

require immediate intervention
Situation PINs GP Participation Close Rate Funnel Ratio
1 Hi Hi Hi Hi Hi
2 Hi Hi Hi Hi Lo
3 Hi Hi Hi Lo Hi
No
Intervention
4 Hi Hi Hi Lo Lo
Required
5 Hi Hi Lo Hi Hi
6 Hi Hi Lo Hi Lo
7 Hi Lo Hi Hi Hi
8 Hi Lo Hi Hi Lo
9 Hi Lo Hi Lo Hi
10 Hi Lo Hi Lo Lo
11 Hi Lo Lo Hi Hi
12 Hi Lo Lo Hi Lo
13 Lo Hi Hi Lo Hi
14 Lo Hi Hi Lo Lo
15 Lo Hi Lo Hi Hi
Intervention
16 Lo Hi Lo Hi Lo
Required
Immediately
17 Lo Hi Lo Lo Hi
18 Lo Hi Lo Lo Lo
19 Lo Lo Hi Lo Hi
20 Lo Lo Hi Lo Lo
21 Lo Lo Lo Hi Hi
22 Lo Lo Lo Hi Lo
23 Lo Lo Lo Lo Hi
24 Lo Lo Lo Lo Lo
Page 47
Hi/Lo intervention triggers – Will require some analyses
PINs are Lo GP is Lo Participation is Lo Close Rate is Lo Funnel Ratio is Hi
Caused by Caused by Caused by Caused by Caused by

 Low participation or low  Customer did not receive  Customer was not  Poor closing skills  Not contacting the
close rate or both convincing value allowed to deal with  Too early advancement of customer in the requisite
proposition during stage 2 Caterpillar the oppty stage amount of time
When do we intervene and stage 3 When do we intervene  Lack of upfront contract  Loose Oppty identification
 Immediately When do we intervene  Stage 1 & prior – Utilize  Improper criteria (net is too big)
 Analyze and identify if this  In stage 2 qualification marketing to identify and When do we intervene When do we intervene
is a cause of low and stage 3 development. give to sales more  Stage 1, contact the
During qualification we opportunities  Stages 2 through 4
participation or low close customer within 24 hrs
rate assure value proposition How do we intervene  Marketing or prospecting
properly delivered.  Utilize marketing to How do we intervene activities
X During development we increase participation (all  DLMS closing skills How do we intervene
x assure our solution will channels)  Coaching of all  Contact all stage 1
exceed expectations opportunities in stages 2
 Increase prospecting opportunities within 24
How do we intervene How do we intervene phone calls by sales rep and 3 and 4 hours
 Change close rate and/or  Provide coaching on
change participation value proposition  Tighten the net
development and (qualification criteria) for
qualification / all marketing activities
disqaulification skills  Tighten the net during
 Coach on value message salesman prospecting
for all stage 2 phone calls or visits
opportunities
 Utilize DLMS
Page 48
Common analysis techniques and structures

– Review close rate and participation rate
PINS
– Examine closed won GPs by sales rep, region, machine, customer, customer history,
segment and days per stage for the opportunity. Drill into those opportunities that had
GP very short stage 2 and stage 3 time periods. Additionally pay special attention to product
and customer’s application
– Examine closed opportunities by sales rep, region, machine, customer, customer history,
segment and days per stage for the opportunity. Identify the drill down where participation
Participation is low. Activate marketing to generate new opportunities through contact center, direct
mail and local events
– Examine closed opportunities by sales rep, region, machine, customer, customer history,
segment and days per stage for the opportunity. Identify the reason for the low closure
Close Rate rate. Address through coaching, and training
– Primary cause historically is due to lack of response by sales force during 1st 24 hours of
opportunity life. Examine by sales rep, region, machine, customer, customer history,
Funnel Ratio segment and days per stage for the opportunity. Drill into Closed No Deals and ascertain
primary 3 categories.
Page 49
Analyses 2 – When and how do we intervene

August 2006

Worldwide Numbers from the Field

Participation Rate 34%
% Customers in Market 10% – 20%
Close Rate 70%
# Sales Calls/Day 4-6
% Non-Selling Activities 50%
Cost of a Sales Call US$250 – $700
SEP Assessment Poor Qualifying/Closing Skills (new)
View of Sales Pipeline Incomplete
Integrated Marketing Not Leveraged
Note: Need improvements in the above areas to increase revenue and reduce distribution cost
Page 51
Observations
 We call on the wrong customers
 We call on our friends
 We spend too much time on non sales activities
Page 52
How Can We Increase PINS Assuming a Constant or Slightly Decrease
Close Rate?
100
100 PINS
80
Participation
70
60
50
40
30 25
PINS
20 18
18 PINS
PINS
10
10 20 30 40 50 60 70 80 100
Close Rate
Page 53
How Can We Increase PINS Assuming a Constant or Slightly Decrease
Close Rate?
100
100 PINS
80
Participation
70
60
50
40
30
20
18
PINS
9
10 9 PINS
PINS
10 20 30 40 50 60 70 80 100
Close Rate
Page 54
How Can We Increase PINS by Increasing Participation and Close
Rate?
100
100 PINS
80
Participation
70
60
50
40
35
30
18 21
PINS 9
10 9 PINS
PINS
10 20 30 40 50 60 70 80 100
Close Rate
Page 55
Example 1 - How Can We Increase PINS without Increasing the Sales

Force?
 Assume:
– If a Salesman makes 4 Calls/Day or 20 Calls/Week
– What happens, if the salesman makes the same number of Calls/Week but
increases his calls in market from 5 to 8 Calls/Week…
• PINS??? Increase by 2.4%
• Revenue??? Increase by $374M
CLOSE RATE(CR) Calls in Mkt Calls/Week % Calls in Mkt
60.0% 5 20 20.0%
No Change 60.0% 8 20 28.6% 8.6% Increase
PARTICIPATION RATE(PR) Calls in Mkt Calls/Week INDUSTRY
33.3% 5 20 75
4% Increase 37.3% 8 20 75
PINS CR PR
20.0% 60.0% 33.3%
2.4% Increase 22.4% 60.0% 37.3%
Sales($) Mil ($156M/PIN PT) PIN Pts) Pts Increase $ Increase
$3,120 20.0 0 $0
$374M Revenue Increase $3,494 22.4 2.4 $374
Page 56
Example 2 - How Can We Increase PINS without Increasing the Sales

Force?
 Assume:
– If a Salesman makes 4 Calls/Day or 20 Calls/Week
– What happens if a Salesman increases the number of Calls/Day from 4 to 5,
decrease Close Rate from 60% to 55% and calls in market increase from 5 to 8
???
• PINS??? Increase by 4.2%
• Revenue??? Increase by $655M
CLOSE RATE(CR) Calls in Mkt Calls/Week % Calls in Mkt
60.0% 5 20 20.0%
5% Decrease 55.0% 8 25 24.2% 4.2% Increase
PARTICIPATION RATE(PR) Calls in Mkt Calls/Week INDUSTRY
33.3% 5 20 75
10.7% Increase 44.0% 8 25 75
PINS CR PR
20.0% 60.0% 33.3%
4.2% Increase 24.2% 55.0% 44.0%
Sales($) Mil ($156M/PIN PT) PIN Pts) Pts Increase $ Increase
$3,120 20.0 0 $0
$655M Revenue Increase $3,775 24.2 4.2 $655
Page 57
Dealer Growth Scenario

East BCP- Dlr BCP- Dlr BCP- Net TOTAL
2005 East CMI Dlr CMI CORE CORE East BCP-CCE CCE Change
Industry 20695 885 18571 1193 28587 1257
Retail Cat Units (Closed Won) 8239 351 6024 339 6581 262
Retail Cat $ (Closed Won) $1,952,782,731 $67,475,359 $478,656,432 $25,967,552 $103,771,028 $8,806,009
Close Lost (est) 267 12 105 55 137 40
Avg Unit $ $237,017 $192,237 $79,458 $76,600 $15,768 $33,611
PINS 39.8% 39.7% 32.4% 28.4% 23.0% 20.8%
PR-Participation Rate (calc) 41.1% 41.1% 33.0% 33.0% 23.5% 23.5%
CR-Close Rate (calc) 97.0% 97.0% 98.2% 86.0% 98.1% 87.0%
Possible Growth Scenario

PR-Participation Rate Change 42.1% 35.0% 27.5%
Net Participation Rate Change 1.0 2.0 4.0
CR-Close Rate (calc) 97.0% 86.0% 87.0%
PINS 40.8% 30.1% 23.9%
PINS Increase 1.1 1.7 3.1 5.96
Retail Cat Units (Closed Won) 361 359 301
Net Retail Cat Units Increase 10 20 39 69
Retail Cat $ (Closed Won) $69,476,061 $27,506,685 $10,107,996
Net Retail Cat $ Increase $2,000,702 $1,539,133 $1,301,987 $4,841,822
% of Sales and Rev Increase 1.6%
2005 Data from Business Information Center (BIC)

Area of Pain - Low Participation
Assumptions for change and growth
Impact of Assumptions on the business plan
Page 58
Process Control System – Sustaining the Improvement

August 2006

How Do We Sustain the Improvement

Process Flow Chart Checking Misc. Info
Status Reports
Indicators (KIVs, KPVs, Performance
Process Owner: Checking item Frequency Responsibility Contingency Plan 1. Weekly Dashboard
KOVs) Standards
Mr. Doe 2. Annual MrktingPlan
Spec Limits / Targets
Chart type What to check When to check Who checks Corrective Actions
Representative
/ Control Limits
Sales
Sales
Opportunity
meeting
data entry
preparation
Sales
Manager
and Sales
Rep meeting > 50% greater than 30 days post last day of Have implementation team
User knowledge survey Survey results Process Owner
Manager
Sales
New
initial survey implementation return for a 2 week retrain
opportunity
Meetings and activity
analysis and assignment
review
Oppty quality report
Process Owner
Marketing
Manager
1. All oppty recorded

Opportunity Data > than 95% complete Have sales managers
Business
Marketing 2. All oppty fields Weekly Process Owner
Team
Planning Quality & Quantity > than 95% accurate contact sales reps to have
Meeting complete
information updated
Manager
Product
3. Stage 5 = SRC
Demand
planning Mktg Oppty >= Dashboard Process Owner
Executives
needed Number of open and Have sales & marketing

Sales
Funnel Health Weekly Process Owner

Sales Oppty >= stage 5 oppty from sales managers generate more
needed and marketing oppty
Executive
Meeting
Region Process Owner
Manager
District
Meeting
Have sales identify if sales
Dashboard
1 < Mktg FR > 10 reps are addressing oppty
Funnel Ratio Markting & Sales Funnel Weekly Process Owner
1 < Sales FR > 5 within 48 hrs. Have mkt
Ratios
manager check oppty
entrance criteria
Business and
Functions Campaign Opportunity Pipeline Process Owner
Planning Management Management
Dashboard Have sales & marketing
Participation Rate Growth >0 Monthly Process Owner
Opps needed from Mrkg 20%
Funnel Ratio
3
Opportunities needed from Mrkg to meet BP
Stage 2 - Qualification
1
January
12
0
February
14
0
March
20
0
April
21
0
May
34
0
June
20
0
July
26
0
August
25
2
11
5
September
26
25
October
25
25
November
34
34
December
28
28 TOTALS
11
5
managers generate more
Oppty from Mrkg
oppty
Stage 5 - Closed Won 2 2 4 14 22 9 53
2006 BPM NOTE - Cells with Yellow background
NOTE - Cells with blue background 0 0 0 0 -18 0 -26 53 -73 -75 -107 -87
<<Enter Dealer require data entry are calculations Opps needed from Sales 80% 2 1 26 29 42 45 73 44 57 54 55 54 73 60
Name>> Industry Units, Business Plan PINs Stage 1 - Identification 5 5
2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 Stage 2 - Qualification 38 2 40
Oppty from Sales
BCP-CCE 1,000 1,500 1,500 1,500 150 150 150 150 15% 10% 10% Stage 3 - Development 24 4 2 30
BCP-Core 1,100 1,500 1,500 1,500 150 150 150 150 14% 10% 10% Stage 4 - Proposal 40 1 41
CMI-Core 1,200 1,500 1,500 1,500 150 150 150 150 13% 10% 10% Total open opportunities in funnel 0 0 0 0 0 0 0 107 7 2 0 0 116
CMI-Large 1,300 1,500 1,500 1,500 150 150 150 150 12% 10% 10% Stage 5 - Closed Won 24 20 34 42 30 26 17 1 1 195
CMI-Specialty 1,400 1,500 1,500 1,500 150 150 150 150 11% 10% 10% Stage 6 - Closed Lost 12 12 6 6 10 46
Total 6,000 7,500 7,500 7,500 750 750 750 750 10% 8% 8% Stage 7 - Closed No decision 3 8 19 27 34 14 8 113
2006 Plan
Industry Plan 90 100 145 155 250 150 195 185 190 185 250 205 2100
% on % have
% Business Plan 18 20 29 31 50 30 39 37 38 37 50 41 420
SPAR/ CSA / % RPO
Financing YTD Business Plan 18 38 67 98 148 178 217 254 292 329 379 420
Focus MARC YTD Closed Won 24 46 82 128 172 220 246 247 247 248 248 248
BCP-CCE 150 150 150 150 SPAR = Special Pricing Assistance Request YTD Closed Won Variance 6 8 15 30 24 42 29 -7 -45 -81 -131 -172
BCP-Core 150 150 150 150 CSA = Customer Service Agreement
Identification Closed Won 24 22 36 46 44 48 26 1 0 1 0 0
per month
Actual
CMI-Core 150 150 150 150 MARC= Maintenance And Repair Contract
Closed Won Variance 6 2 7 15 -6 18 -13 -36 -38 -36 -50 -41 -172
CMI-Large 150 150 150 150 RPO=Rent to Purchase Option
Actual Industry 106 89 160 176 202 168 110 0 0 0 0 0 1011
CMI-Specialty 150 150 150 150 PINs (Target PINs) 20% 22.6% 24.7% 22.5% 26.1% 21.8% 28.6% 23.6% 0.0% 0.0% 0.0% 0.0% 0.0%
YTD PINS 22.6% 23.6% 23.1% 24.1% 23.5% 24.4% 24.3% 0.0% 0.0% 0.0% 0.0% 0.0%
BCP-CCE BCP-Core CMI-Core
Funnel Management Assumptions Source of Business Source of Business Source of Metrics January February March April May June July August September October November December

Close Rate
50%
Participation
50%
Sales
91%
Plan Units
341
Close Rate
50%
Participation
50%
Sales
91%
Plan Units
341
Close Rate
50%
Participation
50%
Sales
91% Qualification Close Rate - current month
Close Rate - YTD
96%
96%
88%
92%
73%
83%
77%
81%
80%
80%
84%
81%
67%
79%
0%
79%
0%
79%
0%
79%
0%
79%
0%
79%
Inside Sales (Counter, telephone, email) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1% Participation Rate - current month 24% 28% 31% 34% 27% 34% 35% 0% 0% 0% 0% 0%
Caterpillar (website, corporate, district) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1% Participation Rate - YTD Target ______ 24% 26% 28% 30% 29% 30% 31% 0% 0% 0% 0% 0%
Direct Mail 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Process Owner
Call Center 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Travel Events (invitation) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
e-mail, website
50%
50%
50%
50%
1%
1%
4
4
50%
50%
50%
50%
1%
1%
4
4
50%
50%
50%
50%
1%
1%
Development
Local Events (open) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Trade Shows (open) 50% 50% 1% 4 50% 50% 1% 4 50% 50% 1%
Tools Opportunities by Stage

BP-What if
Funnel Ratio
3
Stage 1
1,024
0
BCP-CCE
100%
Stage 5
341
375
Stage 6
341
BP-What if
Funnel Ratio
3
Stage 1
1,024
0
BCP-Core
100%
Stage 5
341
375
Stage 6
341
BP-What if
Funnel Ratio
3
Stage 1
1,024
0
CMI-Core
100%
Stage 5
341
Proposal
Quota CGI-ZA
Region
Cat Code
CusNo
(All)
CGI
(All)
Dashboard Have sales manager

Customer (All)
Inside Sales (Counter, telephone, email) 3 11 4 4 3 11 4 4 3 11 4 Mkt Cat (All)
Model (All)
Caterpillar (website, corporate, district) 3 11 4 4 3 11 4 4 3 11 4 BEC Code (All)
Direct Mail 3 11 4 4 3 11 4 4 3 11 4 Salesman (All)
Call Center 3 11 4 4 3 11 4 4 3 11 4 Brand (All)
Travel Events (invitation) 3 11 4 4 3 11 4 4 3 11 4

Closed Family (All)
Close Rate Growth >0 Monthly Process Owner

Local Events (invitation) 3 11 4 4 3 11 4 4 3 11 4 Sum of Qty Month
e-mail, website 3 11 4 4 3 11 4 4 3 11 4 BE Group Jun/05 Jul/05 Aug/05 Sep/05 Oct/05 Nov/05 Dec/05 Jan/06 Feb/06 Mar/06 Apr/06 May/06 Jun/06 Jul/06
AT 11 8 4 9 3 4 2 12 15 9 7 14 8 6
Local Events (open) 3 11 4 4 3 11 4 4 3 11 4 CRS 1 1 1
Trade Shows (open) 3 11 4 4 3 11 4 4 3 11 4 DRL
FM 2 1 1 1
Total 1,125 1,125 1,125 GP 6 6 5 3 3 3 9 10 4 11 13 8
increase coaching on stage

HT 4
LHEX 3 2 2 1 3 1 4 3 3
LWL 3 1 1 1 1
Annual Contacts to Make Oppty

Generation
Rate
BCP-CCE
Contact Rate
Number of
Targets to
Contact
Marketing
Spend
Oppty
Generation
Rate
BCP-Core
Contact Rate
Number of
Targets to
Contact
Marketing
Spend
Oppty
Generation
Rate
CMI-Core
Contact Rate
Number of
Targets to
Contact
$ MG
MHEX
MSWL
OHT
TTT
WD
3
8
10
3
13
6
17
1
7
4
8
10
1
5
4
12
12
3
7
7
3
13
5
5
4
5
4
1
2
1
2
1
4
5
16
7
9
13
15
3
7
6
6
10
3
5
4
5
5
8
12
9
5
3
10
19
1
8
7
6
9
2
9
Field Sales (sales reps) 10% 90% 3,792 $0 10% 90% 3,792 $0 10% 90% 3,792 Grand Total 40 60 44 52 35 25 9 50 77 50 31 64 63 52
Inside Sales (Counter, telephone, email) 20% 50% 38 $100 20% 50% 38 $100 20% 50% 38
Quota GC-ZA
Caterpillar (website, corporate, district) 1% 10% 3,750 $100 1% 10% 3,750 $100 1% 10% 3,750 Region (All)
Direct Mail 5% 80% 94 $100 5% 80% 94 $100 5% 80% 94 Cat Code GC
2 and stage 3 opportunities

CusNo (All)
Call Center 5% 20% 375 $100 5% 20% 375 $100 5% 20% 375 Customer (All)
Mkt Cat (All)
Model (All)
BEC Code (All)
Salesman (All)
Brand (All)
Family (All)
Sum of Qty Month

BHL 51 55 56 50 58 61 34 57 63 56 47 50 55 41
CWL 3 2 2 3 3 2 2 3 1 3 2
MHE 4 4 2 3 1 2 5 1 6 1 3 4 1
SSL 13 13 6 5 14 14 5 6 15 9 4 9 11 15
STEX 2 5 6 3 2 1 1 3 5 5 3 1
STT 4 1 3 1 3
SWL 4 3 1 4 7 4 4 3 7 4 5 4
TH 1 1 1 1 1 1 4
WEX 1 1 1
Grand Total 74 81 81 57 84 86 45 77 87 82 67 74 85 68
 Sales Rep
 Sales Manager Process Owner
 Sales Manager
 Sales Rep  Marketing Manager Verbal check with sales Require 100% meeting
Roles  Marketing Manager
 Product Manager
 Sales Manager  Product Manager SFM meeting 100% of meetings

 Marketing Manager  Sales VP managers during weekly Weekly Process Owner attendance by all reps,
Sales VP
 District Rep attendance attended
 District Manager
Dashboard review managers and district
personnel
Process Owner
Identifies oppty >=
Marketing Plan Marketing Plan Annual Process Owner Require greater marketing
than BPM requires
effort to supply oppty
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14 SFM Sales Manager & Sales Rep Training

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Sales Funnel Management

August 3-4, 2006

MAKING PROGRESS POSSIBLE

SFM Training Agenda

Dealer Characteristics Encountered

 34% Participation rate

 70% Close rate

 50% of salespersons time spent on non-selling activities

 80% of customers on salespersons call list not in market

 No complete view of their sales Funnel

 Marketing tend to concentrate on advertising/promotion only

Critical SFM Message

 All Opportunities enter the top of

 All Opportunities are managed to Proposal

We all have a different view of the sales funnel

SALES BUSINESS FORECAST

District Office View

What is Sales Funnel Management?

Sales Funnel Management Overview

Oppty from Mrkg

Oppty from Sales

Field Sales (sales reps)

Tools Opportunities by Stage

Field Sales (sales reps)

Travel Events (invitation)

Annual Contacts to Make Oppty

Generation Contact Rate

Sum of Qty Month

(Dealer Comments) If we do what has to be done, then we realize:

Seven steps to implement

Establish Plan Train and Implement Drive adoption

• Business Plan • Integrated Campaign Plan/Individual Quota Plan • Dashboard 7

Results from 2 other Dealers

 NACD Example (Pulling the Participation Lever)

 EAME Example (Pulling the Close Rate Lever)

SFM tools and concepts

Sales Stages Buyers Questions

Stages:  Technical (Evaluator)  Handouts (1 page)

Technical Buyer Economic Buyer User Buyer Coach

If we inherit the customers value

Can only say no. Can only say no.

Not completely understanding bid Historically too much time is spent

Entrance Criteria = Stage 1 exit Potential KPIs:

Entrance Criteria = Stage 2 exit Potential KPIs:

Entrance Criteria = Stage 3 exit Potential KPIs:

Closed Won Stage 5, Closed Lost Stage 6, Closed No Deal Stage 7

Entrance Criteria = Stage 4 exit

Entrance & Exit criteria – Before stage assignment, an opportunity

Are there questions my Sales Manager will probably ask me?

Sales Representative & Sales Manager Meeting: Keep it quick, keep

How can we What is

The number of closed won deals is a function of the number of

Close Rate Participation

Opportunity Management Procedures (Lotus Notes)

Managers, Executives, District

• Hold weekly cadence

I/T Manager Sales

• Enter all opportunities into the funnel

East: Monthly Plan

Sales Manager Doan

Count of Qty Month

Sales Manager Weekly Meeting – Primary Questions

Sales Manager Weekly Meeting – Secondary Questions