IGI Consulting Case Presentation

1. IGI Sales & Marketing Strategy Project
Arpita Jauhari, Huilian Zhang
2014. 3. 6

2. How should IGI align its sales force to achieve 25 % profit
improvement in US Liquid Bulk Gas division over the next three years?
Situation
IGI is one of the
leading industrial gas
companies
IGI has a worldwide
presence and is
strong across the
cylinder, liquid bulk,
and tonnage
business
Complication
IGI’s profitability has
been lagging
Executives suspect
that they don’t
understand their
customers well
enough to serve
them appropriately
Key Question
How should IGI align
its sales force to its
customer’s needs to
contribute to an
increase in US Liquid
Bulk Gas division
profits by 25% over
the next three years?
IGI Sales & Marketing Strategy Project 2

3. We Took an “Answer First” Hypotheses Approach for this Project
Objective
Research
Research &
Synthesize Findings
 Effectively define
key question we
will address
Develop
Hypotheses
 Determine
hypotheses and
compile the
findings
Determine
Recommendation
 Formulate
recommendation
and specific
action plans
 Develop sales
redeployment
recommendations
 Consider potential
risks and its
mitigation measures
 Outline a plan for
implementation
 Interview with
customers and
sales
representative
 Develop customer
segmentation
hypothesis
 Conduct data
collection,
industry and
competitive
analysis
 Review current
client
segmentation
and past effort
Completion Mid February 2014 Late February 2014 Early March 2014
IGI Sales & Marketing Strategy Project 3

4. Executive Summary
Client
Segmentation
Sales Force
Redeployment
Expected
Impact
• IGI’s new customer segmentation is based on their revenue contribution and
service needs level.
• This segmentation will help IGI to effectively focus on the maximum profit
generating clients.
• Capability mapping helps IGI to effectively focus on different customer needs.
• Introduction of a new role and increased sales force deployment for the high and
consistent revenue generating segments contributes significantly towards
achieving profit targets.
• Customer segmentation strategy will generate an 25.5 % improvement in
revenue over the next three years.
• Sales redeployment will reduce the total cost by 2.31 Million.
Implementation
& Next Steps
• A three step implementation plan has been proposed for IGI.
• Communication, role transition, role transformation, continuous feedback are
the key elements of the proposed implementation plan.
IGI Sales & Marketing Strategy Project 4

5. Executive Summary
Client
Segmentation
Sales Force
Redeployment
Expected
Impact
• IGI’s new customer segmentation is based on their revenue contribution and
service needs level.
• This segmentation will help IGI to effectively focus on the maximum profit
generating clients.
• Capability mapping helps IGI to effectively focus on different customer needs.
• Introduction of a new role and increased sales force deployment for the high and
consistent revenue generating segments contributes significantly towards
achieving profit targets.
• Customer segmentation strategy will generate an 25.5 % improvement in
revenue over the next three years.
• Sales redeployment will reduce the total cost by 2.31 Million.
Implementation
& Next Steps
• A three step implementation plan has been proposed for IGI.
• Communication, role transition, role transformation, continuous feedback are
the key elements of the proposed implementation plan.
IGI Sales & Marketing Strategy Project 5

6. The proposed customer segmentation is based on their revenue
contribution and service need level
Strategic
Partner
Low Customer Needs
Basic
services
# Customers:461
Total revenue: $ 39.5mil
Average revenue: $ 86k
GPADE: $13.8mil
Want it
all
Phone
Sales
High Revenue
# Customers:75
Total revenue: $ 68.2mil
Average revenue: $ 909k
GPADE: $25.2mil
Ongoing
support
One-time
service
# Customers: 1,240
Total revenue: $ 5mil
Average revenue: $ 4k
GPADE: $2.1mil
Low Revenue
# Customers:158
Total revenue: $ 24mil
Average revenue: $ 152k
GPADE: $6.5mil
High Customer Needs
# Customers:161
Total revenue: $ 12.4mil
Average revenue: $ 77k
GPADE: $500k
# Customers:77
Total revenue: $ 22.1mil
Average revenue: $ 287k
GPADE: $8.2mil
IGI Sales & Marketing Strategy Project 6

7. ”Phone Sales" have lowest revenue contribution and don’t need
regular visits from sales representatives
Phone
Sales
• These customers don’t need sales representatives to visit
them, so we’ll serve them remotely through phone calls.
• Example: Astro Cosmos, Hunter Chemical
• Quote: “Astro doesn’t need technical support or even
expect it – but it will be OK if it is available.”
# Customers: 1,240
Total revenue: $ 5mil
Average revenue: $ 4k
GPADE: $2.1mil
IGI Sales & Marketing Strategy Project 7

8. "Basic Service" have relatively low revenue contribution and their
expectation from IGI is limited to a reliable gas supply
Basic
Service
• The customer requirement is limited to reliable gas supply.
• Example: Modack, NORAMCO
• Quote: “We need just in time delivery because we don’t
have too much space”
# Customers:461
Total revenue: $ 39.5mil
Average revenue: $ 86k
GPADE: $13.8mil
IGI Sales & Marketing Strategy Project 8

9. "One-Time Service" have relatively high revenue contribution
and they require specialized service just once
One-Time
Service
• These customers generally use gas for sophisticated
applications. This implies that they require specialized
service initially, but then only limited support thereafter.
• Example: Foster Farm
• Quote: “IGI makes the best application equipment.
Sometimes they make the only equipment.”
# Customers:158
Total revenue: $ 24mil
Average revenue: $ 152k
GPADE: $6.5mil
IGI Sales & Marketing Strategy Project 9

10. "Ongoing support" have high revenue contribution and need to
be served by a specialist in their industry
Ongoing
Support
• These are customers require industry specialist support.
These are generally small/new companies.
• Example: J&L Specialty Steel; Silver State Foods;
ORE-CAL; Seed Tool
• Quote: “IGI has a good reputation and I may pay a little
extra for it.”
# Customers:77
Total revenue: $ 22.1mil
Average revenue: $ 287k
GPADE: $8.2mil
IGI Sales & Marketing Strategy Project 10

11. ”Want-it-all" have relatively low revenue contribution and they ask for a
variety of services that IGI offers, but aren’t comfortable paying for it.
Want-it-all
• These customers expect better services for lesser price.
• Example: WCI Steel; Pennsylvanian Video Glass (PVG)
• Quote: “Why do we stay with IGI? We feel that the more
eggs we put in one basket, the more you will pay attention
to us. That’s why I like single suppliers.”
# Customers:161
Total revenue: $ 12.4mil
Average revenue: $ 77k
GPADE: $500k
IGI Sales & Marketing Strategy Project 11

12. "Strategic Partner" have highest revenue contribution, they value
IGI’s technical expertise and invest in collaborative projects
Strategic
Partner
• These are the high revenue contributing segment. There is
business opportunity for collaborative projects with
customers from this segment. Example: Crucible Research
• Quote: “IGI should try to gain access to their technical
processes and contribute to enhance their appreciation of
IGI’s process expertise. Perhaps IGI could benefit from a
technology partnership with them?”
# Customers:75
Total revenue: $ 68.2mil
Average revenue: $ 909k
GPADE: $25.2mil
IGI Sales & Marketing Strategy Project 12

13. The employee deployment focuses more on “strategic partners”
and “ongoing support” customer segments
• The expected increase of 8 representatives in “ongoing support segment”
• The expected increase of 53 representatives in the “Strategic partners segment”
28
7
Sales force deployment: Current vs proposed
16 15
53
108
IGI Sales & Marketing Strategy Project 13
80
15
8
3
29
61
Strategic
partners
Want it all Basic service Phone sales One time service Ongoing support
Current Proposed

14. Introduction of a new role and redeployment of sales force contributes
towards achieving profit improvement goal
• The changes in customer segmentation requires new deployment plan for each type of
Sales representative deployment by type
IGI Sales & Marketing Strategy Project 14
0
7
11
61
132
16
2
22
15
72 69
16
Generalist Field Engineering Specialists Key account Phone sales
managers
Market sector
Current Proposed
representatives
• Based on the need for each customer segments the proposed sales representative
deployments are shown below.

15. Executive Summary
Client
Segmentation
Sales Force
Redeployment
Expected
Impact
• IGI’s new customer segmentation is based on their revenue contribution and
service needs level.
• This segmentation will help IGI to effectively focus on the maximum profit
generating clients.
• Capability mapping helps IGI to effectively focus on different customer needs.
• Introduction of a new role and increased sales force deployment for the high and
consistent revenue generating segments contributes significantly towards
achieving profit targets.
• Customer segmentation strategy will generate an 25.5 % improvement in
revenue over the next three years.
• Sales redeployment will reduce the total cost by 2.31 Million.
Implementation
& Next Steps
• A three step implementation plan has been proposed for IGI.
• Communication, role transition, role transformation, continuous feedback are
the key elements of the proposed implementation plan.
IGI Sales & Marketing Strategy Project 15

16. Customer segmentation strategy will generate an 25.5 % improvement in revenue over the
next three years. 18.3% from current customers and 7.2% from new customers.
202
12
3
17
+25.48%
15
10
171
Current customers
New Customers
5
GPADE
Growth
GPADE
5
IGI Sales & Marketing Strategy Project 16
growth2010
171
2009
4
GPADE
growth2012
6
0
22 215
2012
Ecpected
From 2009 to 2012
Total Revenue Growth 25.48%
Growth from current customers 18.3%
Growth from new customers 7.2%

17. Implementation of sales redeployment would save expenses by
2.31 million per year from the existing customers
22
7
2
2
3
24
13
2
1
0
7 8
General Sales
Specialist Sales
Market Sector
Key account manager
Inside Sales
Field Engineering
Proposed
0
Current
IGI Sales & Marketing Strategy Project 17

18. Executive Summary
Client
Segmentation
Sales Force
Redeployment
Expected
Impact
• IGI’s new customer segmentation is based on their revenue contribution and
service needs level.
• This segmentation will help IGI to effectively focus on the maximum profit
generating clients.
• Capability mapping helps IGI to effectively focus on different customer needs.
• Introduction of a new role and increased sales force deployment for the high and
consistent revenue generating segments contributes significantly towards
achieving profit targets.
• Customer segmentation strategy will generate an 25.5 % improvement in
revenue over the next three years.
• Sales redeployment will reduce the total cost by 2.31 Million.
Implementation
& Next Steps
• A three step implementation plan has been proposed for IGI.
• Communication, role transition, role transformation, continuous feedback are
the key elements of the proposed implementation plan.
IGI Sales & Marketing Strategy Project 18

19. We propose a three phase implementation process to achieve
25% profit growth in the next three years
Phase I Phase II Phase III
The first phase of the
implementation plan
focusses on the following:
• Communication
• Employee assessment
• Role transformation
• Training
The expected timeline for
this phase is from March
2009- June 2009
The second phase of the
implementation plan
focuses on the following:
• Role Transition
• Customer feedback
• Readjustment of
implementation
strategy
The expected timeline for
this phase is from June
2009 –August 2009
The third phase of the
implementation plan
focuses on the following:
• Performance
evaluation
• Financial health
assessment
• Ongoing employee
feedback
The expected timeline for
this phase is September
2009 Onwards
IGI Sales & Marketing Strategy Project 19

20. A six month redeployment plan for phase I and II is proposed for
IGI to implement the strategy
Activity Mar Apr May Jun Jul Aug
Communicating the redeployment plan with the leadership
Employee motivation plan
Communicating with valuable resources (star sales etc.)
Communicating firm wide
Communication with clients
Employee assessment
Identify layoff targets and job role changers
Train retained job role changers and new hires
Customer feedback and Readjustment of implementation
Phase II performance evaluation
IGI Sales & Marketing Strategy Project 20
Transition

21. Develop a clear goal statement and communicate it with the formulated
redeployment strategy plan across the firm and customers.
Communicate
the
redeployment
plan with the
VP’s and
Regional
Leadership
The regional
leadership
identifies the
star performers
along with the
HR and informs
them about the
redeployment
plan
Announce the
redeployment
plan to the
entire
organization
IGI Sales & Marketing Strategy Project 21
Communicate
with the
customers
about the sales
force
redeployment
Step 1 Step 2 Step 3 Step 4
Develop a
clear goal
statement that
appeal to all
levels of the
organization
Step 5

22. The redeployment plan shows that there is reduction in the number of
“generalists” and a requirement for a new role called “inside sales”
• The employee requirement in the generalist category reduces by 60 representatives
• The sales representative requirement for “inside sales” category is created by the
new redeployment model
Sales representative deployment by type
IGI Sales & Marketing Strategy Project 22
0
7
11
61
132
16
2
22
15
72 69
16
Generalist Field Engineering Specialists Key account Phone sales
managers
Market sector
Current Proposed

23. Employee attitude and skill assessment provides a valuable metric
to successfully formulate the employee redeployment plan
Skills
Identify early retirement
folks
Retain star sales
representatives
Eliminate road blockers
Find potential job role
changers
IGI Sales & Marketing Strategy Project 23
Attitude
+
+
-
-

24. Implementation of sales redeployment is aimed to achieve a profit
improvement of 25.6% from the current and new customers
25.6% 70.7
1.6
1.6
66.7
4.0
0.8
56.3
56.3
6.1
4.5
5.6
4.0
• Increasing the customer
base is an important factor
to increase the bottom line
• The expected growth in
profit from these new
customers is 4 Million
Current Customers
New customers
2.7
2012
Expected
GPADE
growth 2011
1.9
GPADE
growth 2010
2009
GPADE
growth 2012
GPADE growth from 2009-2012
IGI Sales & Marketing Strategy Project 24

25. Deploy surplus generalist workforce towards business development activities to achieve
the 25% profit target
Increasing the
customer base
is an important
factor to
achieve the
25% profit goal
Hiring new
employees
requires
recruitment
and training
budget
extension
Leveraging the
generalist
experience as
representatives
of IGI would
add value to
the
organization
Attractive
Financial
incentives for
every new
customer
would ensure
employee
commitment
IGI Sales & Marketing Strategy Project 25

26. To achieve the expected impact a strategy-supportive culture has to be
implemented by utilizing the reward & recognition mechanism.
Appreciate job role changers for their flexibility
and progress publicly during monthly
performance review meeting
Reward them with suitable financial incentives
and perks
Circulate success stories through firm wide
internal communication portals to enhance
employee motivation levels
IGI Sales & Marketing Strategy Project 26

27. Mitigate the expected risk due to sales redeployment by
maintaining transparency and valuing customer feedback
Risk Factors
Road
Blockers:
Resistance to
change
• Plan exit strategy for such employees earlier on in the sales
redeployment process.
• Reducing employee layoffs by offering them business development
positions to mitigate the risk of reputation damage
• Promote change supportive environment and launch reward
recognition programs to motivate the employees
Customers:
Dissatisfaction
• Maintain transparency in communication
• Engage the customers in the the redeployment strategy
• Value their feedback
Competitors
get an upper
edge
• Prevent customer dis-satisfaction to avoid competitors from taking
advantage of the sales force realignment
• Continue to make strategy adjustment based on customer feedback
to retain the key accounts.
• Focus well on “strategy partners” segment while making
redeployment decisions.
IGI Sales & Marketing Strategy Project 27

28. Redeployment of sales force in Mexico can achieve a profitability
of 49.9% by incorporating our implementation model
1.0
10.0 0.3
10.0
15.0
11.8
2.1
0.8
1.3
49.9%
2.0
0.7
1.3
3.1
The scale of the business
in Mexico is smaller than
that in the US. As a result
of this, the impact by the
new deployment plan is
much larger.
Current Customers
New customers
2012
Expected
GPADE
growth 2011
GPADE
growth 2012
0.6
2009 GPADE
growth 2010
IGI Sales & Marketing Strategy Project 28

29. APPENDIX
IGI Sales & Marketing Strategy Project 29

30. Appendix Table 1: Revenue Growth Forecast Model Parameters
From Current Customers:
Revenue Growth
Rate (Current
Customers)
2010 2011 2012
Phone Sales 0% 0% 0%
Basic Service 0% 0% 0%
One-time Service 0% 0% 0%
Ongoing Support 5% 10% 15%
Want-it-all -10% -10% -10%
Strategic Partner 6% 12% 18%
For New Customers:
Assume 32 sales representatives from Generalists will focus on acquiring new customers
On average, each representative can handle approximately 10 (2172/228) customers.
On average, each customer generate 0.08 (171.2/2172)million revenue per year.
In year 2010, each representative get 1 new customer on average.
In year 2011 and 2012, each representative get 2 new customers each year on average.
IGI Sales & Marketing Strategy Project 30

31. Appendix Table 2: Revenue Growth Forecast Data
Revenue 2009 (Current) 2010 2011 2012
Phone Sales 5 5 5 5
Basic Service 39.5 39.5 39.5 39.5
One-time Service 24 24 24 24
Ongoing Support 22.1 23.2 25.5 29.4
Want-it-all 12.4 11.2 10 9
Strategic Partner 68.2 72.3 81 95.5
Revenue from
current customers
171.2 175.2 185 202.4
Revenue from new
customers
0 2.5 7.6 12.4
Total Revenue($
Million)
171.2 177.7 192.6 214.8
IGI Sales & Marketing Strategy Project 31

32. Appendix Table 3: GPADE Growth Forecast Model Parameters
From Current Customers:
GPADE Growth Rate
(Current Customers)
2010 2011 2012
Phone Sales 0% 0% 0%
Basic Service 0% 0% 0%
One-time Service 0% 0% 0%
Ongoing Support 5% 10% 15%
Want-it-all -10% -10% -10%
Strategic Partner 6% 12% 18%
For New Customers:
Assume 32 sales representatives from Generalists will focus on acquiring new customers
On average, each representative can handle approximately 10 (2172/228) customers.
On average, each customer generate 0.026 (56.3/2172)million GPADE per year.
In year 2010, each representative get 1 new customer on average.
In year 2011 and 2012, each representative get 2 new customers each year on average.
IGI Sales & Marketing Strategy Project 32

33. Appendix Table 4: GPADE (Profit) Growth Forecast Data
Phone Sales 2.10 2.10 2.10 2.10
Basic Service 13.80 13.80 13.80 13.80
One-time Service 6.50 6.50 6.50 6.50
Ongoing Support 8.20 8.61 9.47 10.42
Want-it-all 0.50 0.45 0.41 0.36
Strategic Partner 25.20 26.71 29.92 33.51
GPADE from current customers 56.30 58.17 62.19 66.69
GPADE from new customers 0.00 0.83 2.41 4.00
Total GPADE ($ Million) 56.30 59.00 64.61 70.69
IGI Sales & Marketing Strategy Project 33

34. Appendix Table 5: Mexico Division GPADE Growth Forecast
Model Parameters
From Current Customers (Assume same segment distribution and growth rate as US division):
Segment %
Phone Sales 4%
Basic Service 25%
One-time Service 12%
Ongoing Support 15%
Want-it-all 1%
Strategic Partner 45%
Total 100%
GPADE Growth Rate
(Current Customers)
2010 2011 2012
Phone Sales 0% 0% 0%
Basic Service 0% 0% 0%
One-time Service 0% 0% 0%
Ongoing Support 5% 10% 15%
Want-it-all -10% -10% -10%
Strategic Partner 6% 12% 18%
For New Customers:
Assume 39 sales representatives from Generalists in Mexico will focus on acquiring new customers
On average, each representative can handle approximately 6.2 (560/90) customers.
On average, each customer generate 0.018 (40*0.25/560)million GPADE per year.
In year 2010, each representative get 0.6 new customer on average.
In year 2011 and 2012, each representative get 1.2 new customers each year on average.
IGI Sales & Marketing Strategy Project 34

35. Appendix Table 6: Mexico GPADE (Profit) Growth Forecast Data
GPADE (Profit) 2009 (Current) 2010 2011 2012
Phone Sales 0.4 0.4 0.4 0.4
Basic Service 2.5 2.5 2.5 2.5
One-time Service 1.2 1.2 1.2 1.2
Ongoing Support 1.5 1.5 1.7 1.9
Want-it-all 0.1 0.1 0.1 0.1
Strategic Partner 4.5 4.7 5.3 6.0
GPADE from current
customers
10.0 10.3 11.0 11.8
GPADE from new
customers
0.0 0.4 1.3 2.2
Total GPADE 10.0 10.8 12.3 14.0
IGI Sales & Marketing Strategy Project 35