Generating Triple-Digit Sales Increases at Caterpillar Americas (CACo.): A CRI Success Story

The Way It Was
For years, development for CACo. salespeople consisted of product update training coinciding with new product introductions. Over a one- or two-day session, product managers "downloaded" information to salespeople one product after another, sometimes explaining as many as four new products in a single session. Each product manager explained machine features, detailing additional horsepower, improved cab arrangements, increasing hauling capacity, and the like. The next product manager followed with another hour of similar information download. By day's end, salespeople's heads swam with details of machine minutiae. Sometimes, as was the case for Brazilian dealer salespeople, sessions were information only; machines were not even available for viewing or demonstration. This "training" did little to develop salespeople's ability to sell value.

The lack of access to machines back at the dealerships was another handicap for salespeople. Because of conservative dealer inventory practices, many salespeople rarely had exposure and access to machines. In some cases, they had not seen models they were expected to sell! This was at a time when the competition was improving and many long-standing Caterpillar product advantages were fading. Machines no longer sold themselves, as they once had. Salespeople required new skills and knowledge to communicate product value and influence customer buying decisions.

The Experts' Way
To bring about continuous professional development, CACo. sought out best practices in the training and development field. Staff members studied and consulted with nationally known training and performance development leaders and organizations. They learned the latest development practices and methodologies. CACo. staff members became certified in crucial skill sets such as Robert Mager's Criterion-Referenced Instruction, the renowned methodology for causing behavior change.

Three key findings came from the research:

1. All performance improvement activity must be targeted at improving a specific business result. In the real world, this is rarely done. Therefore, most training and other performance initiatives fail to produce any real improved business outcome.
2. Building superior performance takes much more than training. The usual response to performance problems is to provide only training. But most often factors such as ineffective management, weak processes and systems, or incorrectly designed compensation programs are really the cause of poor performance. Training will not fix any of these; it will only improve bona fide skill and knowledge deficiencies.
3. When training takes place, it must be done right. It usually is not because traditional training does little more than pass on information. Conversely, well-designed training concentrates on building specific skills needed to competently perform required tasks.

These insights became the foundational elements for the dealer sales development program known as Pro2000. Its long-term aim was to increase key business results, such as sales, percent of industry sales, revenue, margin, and customer loyalty. The team knew that every day it delayed in launching the program was a day of lost sales opportunities. With the business plan in the balance, time was crucial. Under the pressure of slumping sales, the team designed, developed, and launched Pro2000 in two months, a fraction of the time normally required for a project of this magnitude.

Pro2000 Product Training
One team innovation was the reengineering of product training for the program. The new training design provided classroom overviews of Caterpillar and competitive products followed by extensive "in the iron" opportunities to study and work with the equipment. In a production performance section, for example, they performed job studies to illustrate key machine design and performance concepts. Salespeople then faced written tests and delivered presentations to demonstrate what they learned. Over the next three days, the salespeople learned more about Caterpillar and competitive products than they had in their entire careers.

During development of the training the team set a standard - anything mentioned in the classroom had to be illustrated in the factory tour or demonstrated on the machine in the field. A classroom was set up in the middle of the factory to show product quality and design differentiation of critical components. Component and assembly quality was emphasized again on the assembly line tour. Following the plant work, salespeople went to the field to study and work with equipment. They learned to use the product information to look beyond machine specification sheets to prove value.

Learner feedback indicated the training was very demanding, but it was the right thing to do. Salespeople were surprised by the intense, regimented, goal-oriented execution of the program. The response was overwhelmingly positive. Some salespeople, who did not sign up initially, attempted to register before the last session because of reviews from earlier participants. One dealer salesman commented, "This is what I always dreamed Caterpillar would be like."

Developing Pro2000 Selling Skills
It had been years since CACo. offered selling skills courses to most dealers. In fact, the Pro2000 team believed most dealer salespeople had no formal sales technique training. Although their improved product knowledge was clearly visible in the mock sales presentations made at the product training events, it was often apparent that they lacked selling skills.

Team members revamped the product training process to include selling skills development. Knowing that integrating product knowledge and daily, real-world practice are the keys to bringing about true behavior change, the team included skill-building exercises. In one role-play exercise, for example, one person would adlib the role of a competitive salesperson shooting down a Caterpillar product while another would utilize newly learned selling skills to respond appropriately.

Pro2000 Rewards and Recognition
To stimulate behavior change, the team built a rewards and recognition system that excited dealer salespeople. It awarded program points for meeting or exceeding performance standards in critical behaviors (such as winning back lost customers, finding new customers, keeping loyal customers, product and selling skills development, forecasting and goal setting, etc.). To grab salespeople's attention, the team chose Caterpillar-licensed merchandise as rewards. This was a first in Latin America and something the team knew every dealer salesperson coveted. As soon as participants earned program points, they could order their Caterpillar-licensed merchandise rewards, keeping program enthusiasm high.

Additionally, to recognize effort and accomplishment, participants would receive a plaque for completing the program regardless of point total. The top 15 point earners would be invited on a program recognition trip. Throughout the year, CACo. would distribute a program newsletter to keep participants posted on overall point standings and program developments.

Results Achieved
Every aspect of the program has experienced improvement and delivered results. For example, Lion S.A. in Brazil has seen impressive improvement among its fourteen Pro2000 salespeople. The number of units sold to "win-back" customers jumped from 12 to 41 in the first two years of the program (a 341 percent increase) while new customer units more than doubled from 36 to 81 (a 225 percent).

At Sotreq S.A., Brazil's largest dealership, excavator sales are up 512 percent, backhoe loaders 455 percent, motor graders 254 percent, and wheel loaders 152 percent. Sotreq increased the number of new customers by 60 percent over the previous year and won back 80 percent more competitive machine users in the last two years of the program. "Many of these were loyal competitor users who we considered a waste of time to call on before Pro2000," said Antonio Francisco, program manager at Sotreq S.A. "Pro2000 is the boldest and most spectacular development program that Caterpillar has ever done for salespeople. Caterpillar has managed to put something different into this program that captivates, motivates, and enchants the salemen and keeps them constantly connected to the philosophy of the program."

Reprinted courtesy of Caterpillar Inc. from Caterpillar Americas' Annual Quality Improvement Report on Pro2000.