Case Study Project Description

A large innovator in the water business had been expanding through acquisitions on their product distribution side of the business. Now they wanted to increase their systems side with other acquisitions. But what should they buy and how should it be integrated?

Project Problem

Selling systems is a lot different than selling products. Products are short cycle items. People know what they need and they go and buy it. Systems solve bigger problems, come with a bigger price tag and have to be approved and selected by a variety of influencers. You can’t sell a system in the same way you would sell a product. Systems need a consultative selling approach that focuses on solving a problem for the customer. The problem is generally complex, involves several regulations, has installation issues, and takes time to build. The group that selects it is not necessarily the group that installs it, uses it or eventually owns it.

Solution

If you are in the market to add-on to the solutions side of the business, where do you put your focus in your acquisition selection? At the target market and only buy other system companies that sell to the same target market? At the technology and only buy complementary add-ons for that type of technology? Or perhaps at the ultimate end user of the technology? Our view is that the end user is the most important part of this equation. They have complex needs and those companies that can provide them an end to end solution that removes many of their perceived ‘hassles’ will get the contract.

Our solution was to train the management team in how to think like the customer to really understand their point of view, their pain, the hassles they experience and the work they have to do to successfully get a water system working to their satisfaction. Then we helped them survey the market place to determine: what competitors did; market trends; regulatory issues; and other uncontrollable variables that affect the sale of a water system.

Next they worked through all of this data and compared it to what they already offered and how they delivered it. They identified their internal process problems and installations to find ‘gaps’ that could cause customer frustration. Then they focused on the kind of systems that would best augment their current products to create a complete solution and identified the criterion most important in an acquisition.

Our results speak for themselves

375

Assignments

52

Average Valuation
Growth, %

28

Average Profit
Growth, %

10

Average Revenue
Growth, %

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