We stood in front of our top 20 customers and shared what we did. The room went silent. We were taking these actions to better serve them.
Philip Windham
President and CEO, Nortek Global HVAC
Overserve Your 80s At The Expense Of Your 20s
Nortek Global HVAC manufactures high-value heating and air solutions for residential and commercial HVAC markets.
200 Customers
They fired more than 200 customers, about 2% of the business.
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Philip Windham, President and CEO, Nortek Global HVAC: [email protected]
Goal
Nortek Global HVAC (GHVAC) wanted to simplify its business and create more time to focus on targeted growth strategies and major customers.
Process
Through a robust customer line simplification (CLS) process, Nortek Global HVAC analyzed and selected customers for reassignment or termination. Looking at twelve to eighteen months of data, they eliminated as many Quad 4 customers as possible. They determined if anyone on their full list of “B” customers had legitimate potential to grow or were part of a larger relationship that touched their “A” customers. The team considered support or coverage alternatives for certain “B” customers, including moving them to e-commerce or turning them over to one of its “A” customers to serve.
Next, they reviewed the data, findings, and recommendations with their sales leads and key sales influencers. While considering feedback, they made sure they remained on course. After finalizing the list, the team focused on a plan of action, including communications. If “B” customers were being moved to sub-distribution, the team aligned with the “A” customers on things like pricing and rules of engagement. Members of the sales team then sent letters to the “B” customers who were being let go.
Results
Nortek Global HVAC fired more than 200 customers (2% of the business) after their first 80/20 review. “We stood in front of our top 20 customers at a live event and shared what we did directly with them. The room went silent. And that was the point,” said Philip Windham, President and CEO, Nortek Global HVAC. “It allowed us to tell them we were taking these actions to better serve them. And it also made them think, if they’re willing to do that, then we need to step up and be better partners ourselves.”
Nortek Global HVAC segmented its customer care team swiftly and successfully. Bandwidth issues that existed before customer line simplification (CLS) and segmentation have been remedied. “A” customers received faster resolution to inquiries, spent less time on hold, and experienced fewer dropped calls. The sales teams were dedicating meaningful time to prospecting. And the parts and manufacturing teams were no longer tied up satisfying one-off orders from small customers that didn’t invest the same amount of time or effort back into Nortek Global HVAC.
Key Learnings
- Take full advantage of the oxygen this creates for your teams. Make sure they are spending more time with your “As” and are now hunting more whales, not minnows.
- Celebrate your team’s collective efforts, courage, and survival through one of the hardest exercises an organization has to complete to situate themselves for new, smart, and profitable growth.