Alexander Nowroth - Sales and Business Models in The Logistics Industry - Ensuring Growth With Innovative Strategies-Springer (2023)

Alexander
Nowroth
Sales and
Business Models
in the Logistics
Industry
Ensuring Growth with Innovative
Strategies
Sales and Business Models in the
Logistics Industry
Alexander Nowroth
Sales and Business

Models in the Logistics
Industry
Ensuring Growth with Innovative
Strategies
Alexander Nowroth
Lebenswerk Consulting Group
Düsseldorf, Germany
ISBN 978-3-658-39755-5 ISBN 978-3-658-39756-2 (eBook)

https://doi.org/10.1007/978-3-658-39756-2
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For Melody and Ella Grace, to whom I
owe my personal growth.
Foreword
This book is a novelty. For the first time, the currently prevailing unhealthy
balance of power in shipping is so clearly brought to the fore, namely the one
between the shipping companies and the forwarders. The disruption caused by
the shipping companies and its consequences for customers, the supply chain and
the healthy middle are not only shown in this book, but also questioned, and the
effects on the end customer are set out. The current situation affects large and
small companies and threatens to destroy the entrepreneurial middle class, an
essential part of the economy.
And for another reason this book is a novelty: It deals constructively with
sales in the logistics industry. Since there is almost no literature on sales in
logistics, this area has hardly developed professionally and is often still very
traditional. Alexander Nowroth's book finally creates the basis to take the next
step—and he takes this step himself in practice.
The importance of cooperation between the various stakeholders is empha-
sized in the different chapters of the book, because in today's world it is of great
importance to create and maintain togetherness in order to be able to move for-
ward progressively. The necessary communication and cooperation challenges
each individual team member up to the willingness to take on responsibility
themselves. Appropriate self-motivation, a concrete goal in mind and the assump-
tion of responsibility are an incredibly strong driver for any company. This
applies to the operational area as well as to sales.
Whether the collaboration takes place in the logistics chain between custom-
ers, forwarders and carriers or in sales between the hierarchical levels and teams:
It is and remains the basis for good cooperation and communication. This is made
clear by Alexander Nowroth and questions old structures in which performance is
often not considered objectively or, worse still, only measured in terms of profit-
ability.
VII
VIII Foreword
This book calls for questioning what has become established and regularly
leads the reader onto the path of “continuous improvement”. This and the various
models that Alexander Nowroth shows support the reader in the task of question-
ing his strategy and business model and adapting them to the current situation.
With this book, Alexander Nowroth also provides suggestions for innovation
and progressive progress, which is admittedly a rocky path, but one that must
definitely be taken. However, you don't have to go it alone, because the author
accompanies you with his knowledge and ideas and gives you various kinds of
assistance in your undertaking.
I wish all readers a lot of enjoyment and I am sure that you will smile from
time to time because you have caught yourself or your organization in the wrong
corner for the second, third or even fourth time.
Many thanks, Alexander, for the insights, your constructive criticism and
above all your ideas that you share with us – and not least for the constructive
collaboration.
March 2022 Felix Wenzel

Hamburg, Germany Managing Partner, a. hartrodt GmbH & Co. KG
Preface
The year 2021, in which I began writing this book, will go down in history as the
most extraordinary since the invention of the container in 1956. So many black
swans1were sighted that their number may have exceeded that of the white ones:
just to name a few, the blockade of the Suez Canal by a stranded container ship
and the outbreak of the Corona virus in various Chinese port cities. Explosive,
never considered possible rate increases of up to 1000% led to the fact that the
shipping companies worldwide accumulated a profit of more than 100 billion
dollars in 2021 and 2022. Never before seen capacity bottlenecks in almost all
modalities (in particular containers) and an unending burden on the supply chain
led to a massive strain on all stakeholders involved in logistics. Just before com-
pletion of the original German version of the book in early 2022, the military
conflict between Russia and Ukraine broke out, shaking us all to the core because
of the human suffering it caused. The conflict led to unprecedented sanctions,
which isolated Russia from most of the world's countries. Shipping companies
stopped calling at Russian ports within a very short time, the Trans-Siberian Rail-
way was avoided by many companies and leading forwarders, thus pouring more
water into an already overflowing barrel.
And somewhere in between the front lines of these disruptive developments is
sales. I call sales a “temporary” giant because in 2021 and 2022 you didn't have
to be particularly good to be incredibly successful. After all, all that mattered was
that the logistics companies had freight capacity. If this capacity existed, it was
easy for them to bring it to the insatiable market.
1A black swan is an event that is completely unlikely, completely unexpected, and (almost)
everyone is amazed.
IX
X Preface
You are probably wondering why I wrote this book at a time when many com-
panies were benefitting from the incredible revenue growth and the profits they
had made. The reason why I am writing this book now is, on the one hand, to
examine how the role of sales has changed so rapidly and deeply in such a short
time. Plus, how organisations can safeguard themselves with much more robust
volume growth against the inevitable future big rate decreases. On the other hand,
it is my goal to support organisations in the transition of sales to a hybrid organi-
zational model. Sales is no longer just the front line where solid sales and margin
growth should be ensured. Rather, the sales organization today decisively deter-
mines how innovative a company is and will be in the next few years, because
sales is the first and much earlier than all other departments to notice the game-
changing changes – for example, with regard to customer needs. This is partly
due to the fact that sales enjoys a high degree of trust with its existing custom-
ers. If such a trust relationship exists, we are honest with each other and provide
information that can be of considerable importance with regard to innovations, for
example, and which must be communicated internally into product development.
However, my practice shows that in many cases, due to wrong incentives, out-
dated structures as well as excessive bureaucracy, sales often only inadequately or
not at all meets this role as an innovation driver.
With this book I also hope to close a gap in the professional literature.
Although there are hundreds of books that deal with the topic of sales, there is
none that primarily deals with strategic, transformative issues in logistics sales.
For many years I was successfully employed as a salesperson and sales manager
on different continents in the logistics industry. And from day one it was clear to
me that anyone who calls himself a salesman in the logistics industry is more of a
consultant than just a salesman in the traditional sense.
The job of the salesman is not over with the conclusion of a deal: Because
of the ever-faster innovation cycles, the rapid market changes and the constantly
changing customer needs, sales always has to have its finger on the pulse of the
customer. Day in and day out. They have to point their customers to solutions and
present them with ideas they have not thought of before. During my active time in
sales I went so far as to tell my customers: “My goal is to understand your busi-
ness better than my own.” And I meant it.
In 2016, I finally found my calling when I co-founded a consultancy to share
my expertise and knowledge with other companies, always with the goal of hav-
ing a greater, positive impact on the logistics industry, but also other service
driven industries. Meanwhile, I look back on dozens of successfully completed
projects and countless encounters with wonderful people.
Preface XI
This book is the distillation of my knowledge, my experience gathered in

practice, and my ideas regarding sales in the logistics industry. My intention is
to inspire you in your thinking and acting, and to enable you to make even better
decisions. Therefore, I will deliberately evolve the know-how to a how-to …, that
is, what actually matters in practical implementation.
The structure of the book is quickly explained. First, we focus on strategic
topics, such as renewing the strategy and business model, and then move on to
tactical topics, such as immediately implementable efficiency improvements,
recruiting and cross-selling techniques. I am particularly concerned with the top-
ics of leadership and talent search and also address the question of how to keep
high potentials.
You, dear reader, have a really challenging task ahead of you: transforming
and shaping a sales organization that has been largely static for decades into a
hybrid and perhaps even into a digital organisation one day. I am wishing you that
this book will be a valuable companion on this journey!
Düsseldorf, Alexander Nowroth

December 2022
Contents
1 Upheaval in the Logistics and Sales World: Five Trends You

Need to Know!. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Trend 1: Disruption Causes Tension . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Trend 2: Exponentially Accelerated Change Requires
Strategic Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Trend 3: Sales Struggles with Bureaucratic Shackles. . . . . . . . . . . . 8
1.4 Trend 4: Sales Becomes More Digital. . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Trend 5: Closing Rates and “Hit Rates” Gain Importance . . . . . . . . 11
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2 The Most Important Players and Business Models at a Glance. . . . . . 17
2.1 Why a Good Business Model is Essential for Survival. . . . . . . . . . . 17
2.2 The Business Models in the Logistics World. . . . . . . . . . . . . . . . . . . 24
2.2.1 Category 1: Capital-Intensive Shipowners and Airlines . . . . 24
2.2.2 Category 2: Less Capital Intensive—Carriers. . . . . . . . . . . . 32
2.2.3 Category 3: Rising Stars—Start-Ups. . . . . . . . . . . . . . . . . . . 44
2.3 How to Adapt a Business Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.4 How to Check Your Business Model for its Competitiveness. . . . . . 46
2.5 Defense of the Business Model against Related Industries. . . . . . . . 51
2.6 Derivatives from the Business Model Adaptation for Sales. . . . . . . 52
2.7 Interview on the Topic of Record High Freight Rates. . . . . . . . . . . . 54
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3 Sales Management: A Guide to Creating a Long-term
Performance Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.1 From an Autocratic to a Meritocratic Leadership Style. . . . . . . . . . . 63
3.1.1 The Unfair Balance of Power and Force. . . . . . . . . . . . . . . . 64
XIII
XIV Contents
3.1.2 Characteristics of a Meritocratic Leadership Style . . . . . . . . 66

3.2 The Basics of a Performance Culture . . . . . . . . . . . . . . . . . . . . . . . . 68
3.2.1 Smoothing Disproportionate Performance Distribution . . . . 68
3.2.2 The Right Sales Team Size . . . . . . . . . . . . . . . . . . . . . . . . . . 69
3.2.3 Who is Allowed to Stay in the Team? . . . . . . . . . . . . . . . . . . 70
3.2.4 Increasing Return on Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
3.2.5 Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
3.2.6 The SEAL Elite Squad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
3.2.7 Virtual Sales Team. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
3.2.8 The Entrepreneurial Added Value . . . . . . . . . . . . . . . . . . . . . 73
3.3 Make Recruiting the Best Talent Your Top Priority!. . . . . . . . . . . . . 74
3.4 Stakeholder Management: Efficient Linkage with Operational and
Product-related Departments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.5 Weighting of the Incentive System . . . . . . . . . . . . . . . . . . . . . . . . . . 77
3.5.1 Progressive Incentive System and Recognition. . . . . . . . . . . 77
3.5.2 New Business Bonus—Extrinsic. . . . . . . . . . . . . . . . . . . . . . 78
3.5.3 Bonus New Business Profit—Intrinsic. . . . . . . . . . . . . . . . . 79
3.6 Remove Typical Performance Obstacles from Your Path . . . . . . . . . 79
3.6.1 Example Bureaucracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
3.6.2 Example Pipeline Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 82
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
4 How to Win and Retain Talent in the Company . . . . . . . . . . . . . . . . . . 85
4.1 Three Things You Need to Know Before You Hire a New
Salesperson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
4.2 What Really Matters When Hiring New Employees. . . . . . . . . . . . . 91
4.3 How to Structure & to Conduct Successfully the Job Interview
with an Applicant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
4.4 Overcoming the Shortage of Skilled Workers. . . . . . . . . . . . . . . . . . 95
4.4.1 Solving the Skilled Worker Problem. . . . . . . . . . . . . . . . . . . 95
4.4.2 Using the Principle of the Wisdom of the Many. . . . . . . . . . 100
4.5 Retaining the Best Salespeople in the Company. . . . . . . . . . . . . . . . 102
4.5.1 Solving the Resource Problem at the Operational Level. . . . 105
4.5.2 More Conflict Hotspots in Practice. . . . . . . . . . . . . . . . . . . . 106
4.6 Which Skills will be Required in the Future Hybrid Sales. . . . . . . . 109
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
5 Cross-Selling and Hidden Customer Needs—The Sales Turbo . . . . . . 113
5.1 How a Dream Becomes Reality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
5.1.1 Creating a Culture of Togetherness. . . . . . . . . . . . . . . . . . . . 114
Contents XV
5.1.2 Making Employees Part of the Solution . . . . . . . . . . . . . . . . 114

5.1.3 Regularly Review and Update the
Cross-Selling Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
5.2 The Importance of Hidden Customer Needs. . . . . . . . . . . . . . . . . . . 115
5.3 Determination of the Cross-Selling Potential . . . . . . . . . . . . . . . . . . 119
5.4 Practical Guide: Creating a Systemic Cross-Selling
Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
5.4.1 The Five Biggest Cross-Selling Killers and
How to Avoid Them. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
5.4.2 How to Implement Cross-Selling Based on Six Central
Success Criteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
5.5 The Implementation Phase of Cross-selling . . . . . . . . . . . . . . . . . . . 147
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
Upheaval in the Logistics and Sales
World: Five Trends You Need to Know! 1
 This chapter gives you an overview of the market environment and

profiles the most important protagonists. We intensively deal with the
current, unique market conditions that have led to massive disrup-
tions for many protagonists. Specifically, this is about exponential vs.
linear developments. Here, a guideline is formulated for how an expo-
nential development can be better managed. We also review the indi-
vidual business models and examine which protagonists are currently
and in the foreseeable future under the greatest pressure to change.
In addition, you will receive practical knowledge of how to increase
sales efficiency in the short term.
1.1 Trend 1: Disruption Causes Tension
The traditional business model of the logistics industry and in particular of logis-
tics service providers is facing a disruption that has never been seen before. The
tension between the various service providers has never been more intense than
it is today. Shipping companies and forwarders are exemplary for this: They are
service providers in the classical sense. However, it is the case that the shipping
companies are also service providers for the forwarding companies, after all, as
asset owner they provide the forwarding companies with the transport capacities
for their containers. In parallel, the shipping companies also offer these capacities
to end customers, since they are not necessarily dependent on a forwarder, but can
also ship containers directly with a shipping company. This inevitably leads to a
conflict of interest.
© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden 1

GmbH, part of Springer Nature 2023
A. Nowroth, Sales and Business Models in the Logistics Industry,
https://doi.org/10.1007/978-3-658-39756-2_1
2 1 Upheaval in the Logistics and Sales World: Five Trends …
In addition, service in the logistics industry leaves much to be desired. So at

any time, around two-thirds of all ships were delayed in 2021 (Weinrich 2021).
Since there are no real alternatives, no forwarder can get around the five larg-
est shipping companies. Neither start-ups nor alternative technologies are able
to physically move containers on the world’s oceans for the foreseeable future.
Alternative transport modes such as rail or intercontinental transport by truck
make up less than one percent of the volume transported by sea from Asia to
Europe. Of course, the shipowners are well aware of this and are pushing ever
harder in order to secure further market share. Consequently, the rationalization
wave of the last ten years has increased the market share of the top five shipown-
ers from 40% in 2010 to just under 65% in 2020.
While this rationalization wave is now slowly ebbing, a new trend is becoming
apparent, namely the increasing hunger of the shipowners for the forwarding mar-
ket. The best example of this is the shipping company Maersk, which in Novem-
ber 2021 took over the German air and sea freight forwarder Senator International
for EUR 556 million (Norddeutscher Rundfunk [NDR] 2021). Although Senator
International is not a heavyweight in the world forwarding market, the company
nevertheless brings enough volume to the table to rank among the top 10 largest
air freight forwarders in Germany (Senator International 2021).
For the forwarders, this development creates an almost insoluble dilemma:
If they want to grow in the area of sea freight, they are inevitably dependent on
shipping companies such as Maersk, MSC, CMA CMG and the other big players,
since a considerable proportion of the business is generated by tenders, and only
the large shipping companies are able to offer the most cost-effective rates.
The takeover of Senator is almost a beacon for the forwarding industry, which
until now has felt safe, as no shipping company has so far entered the tender busi-
ness. But now Maersk can join in this segment in a big way and will become a
little smarter with every tender as regards the shipment data of possible future
customers. This is similar to the principle of machine based learning: Through
processing new data over and over, more and more knowledge and thus more
control over a new business field is gained.
In the field of airfreight, however, the situation looks different, because the
carriers, for example Lufthansa, are not allowed to conclude business directly
with the consignor. This is reserved exclusively for the forwarders, since a for-
warder must always be interposed between the airline and the end customer as a
shipping agent. But thanks to the acquisition of Senator, this business is no longer
safe from Maersk.
Is Maersk therefore a jack-of-all-trades and greedy? This remains to be seen,
but it is clear that nothing is safe from Maersk. And it is by no means unlikely
1.1 Trend 1: Disruption Causes Tension 3
that other large shipping companies—as so often with other groundbreaking

world’s firsts by Maersk—will follow the Maersk example very soon.
The Existence of Many Forwarders is in Danger

When you read the previous sentence, dear reader, you may have been shocked.
Perhaps you work for a forwarder that has been in the market for several genera-
tions, perhaps even for well over a century. How can it be, you now ask yourself,
that what has been achieved in recent years and decades should suddenly become
obsolete?
Of course, the market is much too large to be dominated by shipping companies

alone, but the signs of a massive displacement competition are increasing. The
shipping companies, but also most forwarders, are currently enjoying record prof-
its. Everything points to the fact that the forwarders are doing business as suc-
cessfully as ever and that a decline in freight rates is not to be expected in spite of
all predictions.
Service providers, in particular shipping companies, are no longer willing to
give up any of their margin. In the fourth quarter of 2020 and especially in 2021,
they have become increasingly aware of their power and have realized how lit-
tle power those who cannot provide any shipping space have. This has gone so
far that some desperate forwarders, for example the French logistics company
Geodis, chartered a small container ship at horrendous prices in order to at least
temporarily alleviate the capacity problem for the most affected routes (Whelan
2021). Even some industrial companies followed suit, Costco and Walmart are
two prominent examples (McCarthy 2021).
The explosive increase in freight rates is certainly due to a combination
of several unforeseen factors, but we will have to get used to such events more
and more in the future. And for forwarders it applies that they will have to prove
themselves in a hypercompetitive environment that is fueled by their former loyal
service providers. Last year still partners in the acquisition of large contracts,
today it is quite possible that the shipping company uses its newly gained knowl-
edge advantage to its own advantage and tells the former common customer:
“Load directly with us and save the costs of the forwarder.” Today, it seems, noth-
ing is sacred anymore.
Another fact supports this: Approximately 70 to 75% of containers are bun-
dled in long-term freight rates, and only about 25 to 30% end up on the spot mar-
ket (where freight rates are traded individually at the current day’s price). This
means that it is becoming increasingly difficult for shippers to credibly sell real
differences in their service portfolios to their customers. The main argument for
involving a forwarder has always been that he can find the best logistical solu-
tion for the respective customer and maintain a certain independence in choosing
the service providers. However, this is now diluted by the fact that, for example,
more and more shipping companies are travelling together on certain routes with
so-called “Vessel Sharing Agreements”(VSAs). This is similar to a “light” cartel,
as there is no longer any real competition or it is at least severely restricted. The
competent regulatory authorities could oblige the companies by abolishing these
VSAs—similar to the conference ban of 2005. Whether this will happen remains
to be seen.
The only means available to carriers to counter this existential threat is the
anchoring of systemic capacity to innovate. Only by developing and offering
highly attractive, relevant products can a company secure a dominant position in
certain industries However, the biggest hurdle on the way there is not—as is often
assumed—the lack of innovation competence, but the unshakeable desire and the
understanding that despite current record profits, continuous innovation is indis-
pensable! Success makes you lazy, and such a resounding success as the logistics
industry is currently experiencing makes you complacent and even partially blind.
Let’s take a look at a family-run German logistics company that is part of my
customer base. For example, there is the managing director who is always busy
generating as much new business as possible, driven as he is by sales figures and
various profitability KPIs. Nobody in the company is concerned with the topic
of innovation as long as the good times continue, with the opportunity to make
more money than ever before. First of all, one is inclined to think of oneself and
of today and not of tomorrow. That is human, of course, but is anything other than
conducive to innovation. Innovation means thinking radically differently and at
the same time being open to the fact that one’s own business can move in a com-
pletely different direction.
 Many shipping companies have grown strongly in the last twelve to

eighteen months, so there is a great danger that the organizational
structure has remained unchanged, although it ought to have been
adapted or changed urgently due to the increasing business.
Employees are at the end of their tether in terms of their workload and have no
headspace and even less free capacity remaining to deal with creative, experi-
mental activities. Every minute invested in innovation would be a “lost shipment”
for them. That’s roughly like not wanting to change the tires during a car race
because you’re afraid of losing the time you need to do it. However, the fact that
1.1 Trend 1: Disruption Causes Tension 5
you will gradually become slower with worn-out tires—which stand for an over-
loaded organization in this example—and thus lose the race in the medium term
is ignored.
Being innovative means consciously withdrawing from day-to-day business
and critically examining one’s own business both from a distance and up close.
The “Skunk Works” approach, which was invented for this very purpose, is
known from Silicon Valley (Pratt 2018). Here, a department is de facto hermeti-
cally sealed off from the rest of the company. This allows the employees assigned
to this “skunk” team to concentrate 100% on the development of innovations. If
you now think that this is not possible for you, that you cannot stop the relevant
employees and that you would rather leave the whole thing completely to exter-
nal consultants and other service providers, this can certainly work, but such an
approach entails the not inconsiderable risk that these external consultants will
not gain a deep insight into your business. Ideally, you should work with external
and internal employees together and give them the opportunity to think freely, to
nurture their ideas, possibly to reject them or to check their feasibility. Your motto
can therefore be:
 Precisely because you are so successful, you can afford to take a step
back to take two or three steps forward in the long term through a
serious innovation approach and thus keep your competitors in
check.
It is not so important whether you now make 1.7 or 1.85 billion euros in sales—
especially for family-run companies—but it is all the more important what inno-
vative power you have and whether you also plan for the time that will inevitably
come after the current “high”: namely the crash into more normal realms. Always
keep in mind: the greater the party, the more severe the hangover!
By no means do I want to paint too black a picture, but I absolutely want to
shake you awake, because time and again in my daily work I experience that profit
and sales growth are blindly chased after as if there were nothing more substantial
for the success of the company. At the same time, many company owners swear
that they think fundamentally in the long term and by no means only from quarter
to quarter. However, too rapid growth is unhealthy; this applies not only to chil-
dren, but also to your entire organization. So you should make compromises. Such
a compromise can look like this: you make concessions in terms of sales and profit
growth because your colleagues are getting more and more tired due to excessive
overtime hours leading to more and more avoidable mistakes being made.
1.2 Trend 2: Exponentially Accelerated Change

Requires Strategic Adjustments
The developments described above show how little can be predicted nowadays
and that almost nothing seems impossible anymore. The only way to deal with
this uncertainty is to permanently adapt one’s own strategy and possibly also the
business model to the prevailing circumstances. Let us first deal with the topic of
strategy in times of stormy change.
This is a very difficult undertaking, as strategy is often confused with plan-
ning or, even worse, made into a kind of hybrid: the term “strategic planning”.
The term “strategic planning” is nothing more than an oxymoron, because strat-
egy is something entirely different from a plan. The development of a strategy
is a creative and highly emotional process, because with strategies one thinks in
future states. These must be imaginatively and therefore emotionally conceivable.
A plan, on the other hand, is nothing more than a mere concatenation of different
activities. The saying “Culture eats strategy for breakfast” in this context brings it
to the point:
 “Strategy eats planning for lunch, right after breakfast!”
It is a habit to always pour everything into plans. Creativity and innovation are
much too individual to be able to squeeze them into an Excel cell. But time and
again, various controlling guidelines and other bureaucratic instruments allow the
strategy process to degenerate into a planning process in most companies. The
creativity is left completely on the track.
It is by no means the case that plans make no sense. On the contrary: They are
important in order to be able to organize things or activities in a highly structured
way. Historically, plans used to have a very long horizon, often extending over
three or even five years. This may have worked many years ago, when the world
ticked much slower and the further development was easier to predict. In addi-
tion, plans are primarily designed for linear growth or linear development. How-
ever, they fail completely in the face of exponential change. And it is precisely
these developments that are now encountered much more frequently than linear
ones. Indeed, I would describe the developments since the financial crisis of 2008
as exponential and the years from 2010 as the exponential decade. Just think of
the global population growth, the increase in CO2 emissions, the rapid spread of
the Corona virus and the rapid growth of some highly innovative companies such
as Tesla or Amazon.
1.2 Trend 2: Exponentially Accelerated Change Requires Strategic … 7
THE LOGISTICS INDUSTRY IN 2023
Competition with
unprecedented disruptive
power and speed
More extremes than
equalies
Predicons and historical
values lose their validity
Number of things we
can't control
keeps increasing
Many entrepreneurial
processes are geared
towards linear growth
WE ARE THE FIRST

GENERATION TO HAVE TO Exponential growth
DEAL WITH IT Linear growth
Fig. 1.1  The logistics industry in 2023
Figure 1.1 illustrates what happens when you “rest” on the linear line, that is,
when you notice a relevant exponential development too late. For example, if the
entry of a new competitor or the product launch of another competitor cuts your
own line, it is already much too late to catch up. You will simply be left behind.
The half-life of plans in 2023 is almost zero. For comparison: For my projects,
for example, we plan a maximum of two to four weeks in advance, even if the
entire project duration extends over six or twelve months. Otherwise, too much
can be overlooked on the sidelines, and you run the risk of running in the wrong
direction.
Thus, the “change has changed”, as Garry Hamel already noted a few years
ago (Hamel 2014). This requires that we finally stop wasting time with outdated
planning excesses, that is, no longer try to force the future into a corset that it
doesn’t fit into anyway, and that we accept living with a certain degree of fuzzi-
ness. Today, more than ever, the formula “progress beats perfection” applies. Or,
to put it another way: “The fast eat the slow.” It is high time to deal with other
control elements—also in sales.
The word “controlling” also includes the often negatively perceived term
“control”. I would like to focus in particular on the elimination of control ele-
ments, because, as we will see, the sales performance in many companies is
massively restricted by an almost excessive bureaucracy, which is absolutely
unnecessary or counterproductive.
1.3 Trend 3: Sales Struggles with Bureaucratic

Shackles
The excessive efficiency gains of recent decades have led to enormous bureau-
cratic burdens, with which sales also have to struggle. Did you know that a sales-
person in the logistics industry spends on average only about five to six hours
per week with customer meetings (virtual or analog)? That’s not even 15% of his
working time. The reason for this is too high a burden with avoidable and to a
large extent sales-inhibiting tasks.
I distinguish three types of tasks that concern sales:
1. Revenue-generating tasks (e.g. customer visits, pipeline formation, customer

events)
2. Revenue-preventing, unavoidable tasks (e.g. admin requirements such as travel
expense creation, operational trifles, but also internal meetings, etc.)
3. Revenue-preventing avoidable tasks (e.g. internal meetings, operational tasks,
etc.). These make up a much larger proportion of the tasks of the sales depart-
ment than many salespeople are willing to admit.
I estimate that the revenue-preventing avoidable tasks can make up to 50% of a

salesperson’s weekly hours. This is not solely the responsibility of the salespeo-
ple, as it can also be caused by chaotic meetings that are controlled by sales man-
agement, which distract the sales department from its actual task.
Bureaucratic processes are usually introduced by leaders under the false
assumption that they can control or above all increase the performance of their
employees. Pointless bureaucratic processes, such as excessive travel authoriza-
tion procedures, travel expense accounting and reporting processes, massively
reduce the time available for revenue-generating tasks and demotivate your team!
So I remember that during my time at a publicly traded logistics company,
a simple flight in economy class to a customer in China had to be approved by
the CEO himself. Neither my branch manager nor the regional manager could
1.4 Trend 4: Sales Becomes More Digital 9
THE 4 BIGGEST BUREAUCRACY MONSTERS AND TURNOVER INHIBITORS
ACTIVITIES-
PLANNING &
ACCOUNTING REPORTING
MEETING CULTURE
Excessive
visit reports Frequency & NON-SALES
Necessity ACTIVITIES
Complicated
pipelines Duraon
Travel planning
Any manual Preparaon and Operaonal
Travel expense acvies follow-up acvies
report
Fig. 1.2  The four biggest bureaucracy monsters and sales inhibitors
approve this flight, even though they were responsible for a seven- or eight-digit
budget and disciplinary responsibility for hundreds of employees year after year.
Processes of this kind have one thing in common: They serve to unmask the
two to five percent black sheep who want to cheat the company, but they pun-
ish the 95 to 98% honest employees by condemning them to fill out forms, even
though they could use this time to generate revenue. The result: mediocrity and
service by the book.
In Fig. 1.2 the four biggest bureaucracy monsters are listed. Probably you will
recognize your own company here. We will mainly deal with this in Chap. 2 and 4.
1.4 Trend 4: Sales Becomes More Digital
Selling has become a “commodity” and is too static. This has led, amongst other
things, to the fact that most distribution organizations have become much too
large. On a scale of 1 to 10 (1 = very low, 10 = very high): How static is your
sales organisation? Take a look at all your new business deals from the last twelve
months: How many were analog (including Zoom/Teams) and how many were
digital, i.e. without you coming into contact with the customer face to face? I am
sure that your distribution is rather weakly digital and most of your deals are con-
cluded in an analog manner.
Due to Coronavirus, the average number of personal customer visits will
decrease in the long term. This is because customers simply had to get used to
the fact—whether they wanted to or not—that appointments took place digitally.
This way you could take more appointments per day and felt—subjectively—
more productive, even though the opposite was often the case: From one call
you rushed to the next, and the content and substance were often left behind in
personal conversations. This increases the importance of a personal appointment
all the more. This is especially true if the salesperson is able to achieve a higher
appointment density than the competition. Across all industries, it can be seen
that the salespeople with the highest number of appointments are among the most
successful in their field, in all quantitative categories! That is why it is essential to
focus on tasks that generate sales.
Everyone wants to become increasingly digital, including those who work in
sales, but they are still stuck with the idea that it is better to meet their customers
physically and to communicate with them face to face.
 Interestingly, the Coronavirus pandemic has not led to a digitaliza-

tion push, but rather to a wave of nostalgia à la “How nice it was
when I could still meet my customers”!
Despite all the programs and tools such as Zoom, Teams, Slack and the hardware
available today such as tablets and smartphones, digitalization in sales seems to
bounce off the personal beliefs of salespeople: The physical customer appoint-
ment plays an increasingly important role, the more it is threatened with extinc-
tion. Its supporters emphasize that trust can best be built up during a physical
encounter. If you don’t see each other at all or only digitally, they argue, trust-
building will be significantly more difficult and, as a result, the scope or size of
the deal will be substantially impaired. In addition, in times of crisis, people tend
to focus on what they already know and what they have had good experiences
with in the past. This presents another hurdle in the attempt to convince a cus-
tomer to switch service providers in an already difficult time.
On the other hand, proponents of digital distribution are of the opinion that
all this is old hat and outdated thinking, because thanks to their algorithms and
1.5 Trend 5: Closing Rates and “Hit Rates” Gain Importance 11
excellent data preparation, companies can very precisely articulate what they
want. This also explains the trend of recent years that more and more tenders are
taking place only online or partly in the so-called e-bidding process. The advan-
tage of this is that such a tender is much more cost-effective—for both sides:
Hardly any or no appointments have to be kept, communication takes place
exclusively by e-mail, and the input of rates or conditions creates an immediate
obligation.
I am convinced that for really important deals, personal exchange is essential.
However, I think that the number of customers who actually have to be visited in
person to be closed is massively overestimated by most salespeople and also sales
managers!
1.5 Trend 5: Closing Rates and “Hit Rates” Gain

Importance
Most sales organizations stay far below their potential because they grossly over-
estimate their abilities, have no knowledge whatsoever regarding their “hit rate”,
and lack any discipline whatsoever. This is evidenced by the evaluations of doz-
ens of conversations with salespeople and their sales statistics. Let’s start with the
statistics and take a look at the success rate:
Assuming a success rate of 15% for tenders and large offers, this means that
success was not achieved in 85% of cases. To put it bluntly: time (working time)
and money (wages) were wasted. Some will now argue that this is part of the
nature of sales and that one simply has to accept misses if one wants to be suc-
cessful. The comparison with a striker in soccer is often made here, who finally
also records more misses on the opposing goal than goals. It is all the more
worthwhile to deal with techniques that increase the probability of success and
reduce the duration of the sales cycle. A success rate of 15% means a hit rate of
(100 / 15 = 6.7) that only about every seventh customer conversation is success-
ful (= success). Consequently, it must be the goal of the sales management to
increase the success rate as much as possible. Here are four tips from practice:
1. Continuous, rolling measurement from the last four quarters

2. Pre-selection of suitable new business
3. Number of offers sent to a verified decision maker
4. Number of offers in which a meeting was agreed before the offer was made
The problem is that—and this really affects all industries—90 to 95% (!) of sales-
people have no idea what their closing rate is, but they act on feeling at best. If it
doesn’t work out so well, you keep hearing the same excuses: reference is made
to a “difficult market situation”, “poor rates” and a “weak product support” or
generally to the fact that the current year is simply a “difficult year”. These are all
just tired excuses, because there are also salespeople and whole companies that
act and grow much faster and sustainably than their competitors.
Do the following thought experiment: Imagine you ask your sales team who,
in terms of their likelihood of closing, thinks they are better than the sales aver-
age. The overwhelming majority of those asked will raise their hand without
thinking twice. Then follow up with the question of who has already measured
their own likelihood of closing and knows the team’s average likelihood of clos-
ing.
If you ask the same question in relation to driving, then just under 80% (by the
way, mainly the male respondents) will report here as well. In other words, the
majority of your salespeople overestimate their abilities and thus also their own
closing rate. As a result, their sales pipelines are completely underdeveloped and
significantly below the level at which they should actually be. Worse still, most
salespeople do not even know what their closing rate and their hit rate are.
I experience this again and again when I ask salespeople for an assessment of
their closing rate in project workshops. After an initial assessment, I ask them to
check their estimates against the numbers from the last twelve months. Most of
them then open their eyes in disbelief, because the actual closing rate turns out
to be significantly lower than their estimate. This is also one of the main reasons
why the sales organization does not even work at cost in most companies. There
is no or only insufficient clarity about the closing rate and the hit rate.
Online tools such as freight calculators or tendering tools are much further
ahead in this respect, as they are incorruptible machines or computer programs.
The question now is: Is the static trade phasing itself out? The answer is a clear
no if you face the described activities resolutely. You do this as follows:
a. Closing Rate and Hit Rate

First, measure these two criteria once per quarter, and do so rolling for the last
four quarters. This means that in the first quarter of 2022 you will look at Q1
2021 to Q4 2021 and at the next measurement in the second quarter of 2022 you
will look at Q2 2021 to Q1 2022 (etc.). You measure the closing rate by simply
dividing the number of won tenders and large offers (attention: no spot quotes) by
the number of tenders you have participated in. The resulting percentage is your
completion probability.
The hit rate is now obtained by dividing 100 by the completion probability.
The following is a calculation example:
Calculation Example Hit Rate
• Last 4 quarters: 15 Tenders

• 2 won
• 2 / 15 × 100 = 13.3 % closing rate
• Hit-Rate  = 100 / 13,3 = 7.5
– The potential in the pipeline must therefore be 7.5 times as high as
the volume, i.e. the container and airfreight volumes/gross freight
forwarding turnover /gross profit (GP) or the sales target, in order to
be able to achieve it realistically!
– Important: Measure continuously once per quarter for the last four
quarters!
• Target: GP of 250,000 euros p.a. (revenue target: 2,500,000 euros p.a.)
• Current hit rate 1:10
• Pipeline: Volume/Revenue/GP or sales target × 10!
– FOCUS on pre-qualified potential
– FOCUS on potential with decision maker access
– Continuous “replenishing” of the pipeline with new matching potential
b. Strength of Pipeline
As you now know, the hit rate is your multiplier for the amount of potential that
must be in your pipeline (or your team’s) in order to have any realistic chance of
achieving your sales target.
Exercise
As already described briefly above, ask the members of your team once to
assess themselves where their hit rate is and then show them a comparison
measurement with the “actual” data!
In addition, break down where the hit rate differs for different sales cat-
egories (e.g. sea freight or airfreight business).
If the new business target is one million euros and your probability of
success is 10%, this means that the pre-qualified potential must always be
10 million euros! This is real, realistic potential.
In other words, if a customer awards a total of 15 million euros and

you know that there will be multiple awards, the potential should only be
3 million euros. And only this counts for the consideration of your pipeline
strength.
This also answers the question of which numbers to use for a pipeline.
c. Sales Team’s Engagement with the Achieved Numbers

Everyone who wants to be part of your team has to be able to recite these num-
bers in their sleep. If this is not the case, the relevant person is simply too expen-
sive for you because they can never have predictable success!
Your meetings should revolve around the changes in values and what you as a
team can do to improve the ratio of sales time to won deals.
It may be that in one or two quarters the hit rate deteriorates, for example for
sea freight. This means—provided you recognize this in time due to your regu-
lar measurement—that you can then counter with a campaign concerning other
products. You can measure this quite simply with your CRM system (Customer
Relationship Management System). If this is not possible, it is advisable to check
whether this function can be programmed or whether your CRM system should
be scrapped.
Two things that are related to the coronavirus crisis are extremely dangerous
for sales organizations in the logistics industry: On the one hand, you don’t even
have to be really good to sell successfully. Primarily, it is about capacities, and
those who have a strong product behind them can unload these capacities within
a very short time due to the exploding demand. Those who do not have these
capacities have almost no chance of being successful at least in sea freight. On
the other hand, the already mentioned exorbitant evolution of freight rates is to be
mentioned. This obscures the sense of how successful one actually is. The follow-
ing example illustrates this:
Example
Assuming you shipped 100 containers from the Far East to Europe for a cus-
tomer in 2020. Since you made 2000 euros in sales and 10% profit per con-
tainer, the sales were 200,000 euros and the profit was 20,000 euros. Even if
the volume of containers halved from 100 to 50, you still generated twice as
much sales and profit as the year before if the freight rates quadrupled and the
profit margin remained the same! ◄
In this context, a proverb comes to mind that says: “Give a man money and power
and find out his true character.” It is admittedly not easy to stay grounded with
the current freight rates and the profits being achieved, and it requires a certain
amount of humility to consistently look at the volume development (e.g. the num-
ber of 20 ft standard containers or the weight breakable by airfreight). This is a
question of constant reflection and questioning of one’s own status quo. The fol-
lowing questions will help you find the right answers:
• How strongly is my customer portfolio geared towards a particular prod-

uct or geographical area?
Most salespeople have a certain “favorite product”, for example, sea freight
or airfreight, which they are very good at and with which they are particularly
familiar. While it is good to have very good knowledge of a product and thus
be able to exude a great deal of self-confidence in the sales conversation, too
much focus is dangerous: What happens, for example, if the market is sud-
denly saturated, if there is no more capacity available, or if the sector in which
the relevant salesperson is operating is heavily affected by the effects of the
Coronavirus crisis? It is better to bet on different horses: IT solutions, sustain-
ability solutions (e.g. CO2 calculator) and other more complex products that
include a consulting element in the acquisition.
• What data insight do I have regarding a product of my company? What is
withheld from me?
It is not uncommon for sales to have to achieve ambitious goals, but manage-
ment only grants them very limited data access. This can result in sales having
no or only insufficient knowledge of the product and margins, and the acquisi-
tion process being unnecessarily prolonged. Do it differently, do it better!
• How can I sell tried and tested products in a more innovative way?
Let me explain this point using an example: If a customer regularly or semi-
annually carries out a tender because he does not trust the market, the seller is
well advised to consider how a different approach might look: For example,
he could offer a two or three year validity, which would bind the customer for
longer, but save him good money compared to the quarterly rates. At the same
time, the customer must deliver a certain volume minimum—similar to what
has been the case in contract logistics and the express sector for decades. A
nice side effect of this variant: The business and growth become much more
predictable.
 The higher the rise, the deeper the fall. Is your team mentally pre-
pared for this?
Conclusion There will be a consolidation of freight rates one way or the other,
the question is only when this will be the case. On the one hand, the rates have
never been at such a high level, and on the other hand, rate volatility is as certain
as rain in Seattle. However, the level will be slightly higher than the starting level.
An old danger is always to see success as a constant. Therefore, it should be one
of your most important tasks to ground the sales in this respect.
In Chap. 2 we now turn to the most important business models in the logistics
industry and find out how we can create a future-oriented, resilient model for the
future.
References
Hamel G (2014) Manage Change in a Hyper-Changing World. Published by Tim Ragan.

https://timragan.wordpress.com/2014/07/17/gary-hamel-change-itself-has-changed/.
Last access on 17th February 2022.
McCarthy K (2021) Costco, Walmart rent out own shipping containers amid supply chain
hiccups ahead of holidays. In: ABC News, 29th September 2021. https://abcnews.
go.com/GMA/Living/costco-walmart-rent-shipping-containers-amid-supply-chain/
story?id=80298745. Last access on 14th February 2022.
Norddeutscher Rundfunk (NDR) (2021) Reederei Maersk übernimmt Hamburger Luft-
frachtspedition. In: NDR.de, 2nd November 2021. https://www.ndr.de/nachrichten/ham-
burg/Reederei-Maersk-uebernimmt-Hamburger-Luftfrachtspedition,maersk300.html.
Pratt MK (2018) SkunkWorks project (Skunk Works). Published by Techtarget.com.
https://www.techtarget.com/searchcio/definition/skunkworks. Last access on 17th Feb-
ruary 2022.
Senator International (2021) Top 10 of most successful German Air Freight forwarders.
In: Senator International, 26th March 2021. https://www.senator-international.com/en/
news/news-detail/article/top-10-of-most-successful-german-air-freight-forwarders.html.
Weinrich R (2021) Schiffe unpünktlich wie nie zuvor. In: Eurotransport.de, 8th Novem-
ber 2021. https://www.eurotransport.de/artikel/container-chaos-haelt-weiter-an-schiffe-
unpuenktlich-wie-nie-zuvor-supply-chain-gestoert-11195101.html. Last access on 14th
February 2022.
Whelan S (2021) Geodis the latest forwarder to dip its toe into the charter waters. In: The
Loadstar, 12th January 2021. https://theloadstar.com/geodis-the-latest-forwarder-to-dip-
its-toe-into-the-charter-waters/. Last access on 14th Februar 2022.
The Most Important Players and
Business Models at a Glance 2
 What distinguishes a bad from a good and a good from an excel-

lent business model? There are hundreds, if not thousands, of books
on this topic, but none that specifically address the logistics service
industry. The following remarks should therefore not be added to the
mass of existing publications, but should rather delimit the different
business models of the most important players in the logistics service
industry from each other. I would also like to show how the transition
to an excellent business model succeeds, because this is indispensable
for long-term competitive advantage and margin growth.
2.1 Why a Good Business Model is Essential for

Survival
First of all, it is important—as with so many things—to come up with a clear

definition. Did you know that there is no generally accepted definition of the term
“business model”? Let’s try it anyway: A business model is strongly simplified
the way money is earned. I go one step further, because nowadays the justifica-
tion for the existence of the company must also arise from the business model. In
plain language: A business model must be constantly adapted, for example to a
new product.
First of all, to make money: This can be done in different ways, for example
by selling products online or offline, automated by virtual bots or analog by sales-
people. Or by so-called omnichannel, that is, numerous different communication
channels (Internet, radio, Google Ads, etc.). In plain text:

https://doi.org/10.1007/978-3-658-39756-2_2
18 2 The Most Important Players and Business Models at a Glance
 The business model is the heart of a company. It describes how a

company generates revenue and is constantly adapted to changes in
market conditions to make the company future-proof.
Without an excellent business model, a logistics company is not future-proof. It

doesn’t matter whether it’s a carrier, like a shipping company, an international
logistics company, or a 4PL (4th Party Logistics Provider).
Let’s start with what makes a bad business model. Here the focus is on very
short-term profits, for example, quarterly. Jeff Bezos, owner and long-time CEO
of Amazon, was congratulated a few months ago by analysts for his excellent
quarterly results and then asked if he wasn’t particularly proud of his company’s
performance this quarter. He replied that the said quarterly result had been con-
ceived two to three years ago and that the current good figures were the fruits of
work back then. (Channel 24 2020) In other words, Amazon is already dealing
with the 2025 quarterly targets in 2022. Planning three years in advance is not
particularly spectacular (since many companies are specifically dealing with the
next three to five years), but the way in which quarterly results are planned in
advance so consistently and radically, and thus questioning one’s own status quo
and never being satisfied with being number one, is new. A bad business model
is primarily focused on short-term profit and inflexible. Let’s look at some well-
known negative examples:
Examples
In 2007, Nokia had a global market share of around 50% for mobile phones,
which was unimaginable at the time. Within the following six years, this share
fell to 3.5% (Lee 2013). The reason for this was that the Nokia managers were
looking back at the past successes and—instead of taking risks and being
brave to tackle the next innovation—they were disproportionately concerned
with the optimization of the past.
The same fate befell the company Quelle in Germany. Perhaps some may
will still remember the thick book-like catalogue that arrived by mail every
year and in which you could choose the things you liked. At the end of the
1990s, Quelle even had one of the world’s most powerful shipping manage-
ment systems (Demel and Birkenstock 2017), but it missed the jump into the
digital age and did not invest in its Internet presence in time. ◄
These examples show that a business model must be constantly adapted to both
market and customer needs in order for the relevant company to remain success-
2.1 Why a Good Business Model is Essential for Survival 19
ful in the future. This is especially true and particularly true for corporate lead-
ers who believe that their organization is an impregnable fortress. I remember the
CEO of a well-known airline who, at a large logistics congress in 2018, claimed
in his keynote speech that his company could not be “disrupted”. This may ini-
tially appear to be plausible, as an airline is extremely capital intensive. What the
good man probably considered to be the least “disruption risk” was the pandemic
that spread across the globe a little later, forcing his proud company to accept
billions of euros in state aid to avert bankruptcy. We see: The disruption of a busi-
ness model can take place in very different ways—not only on the part of the
competition, but also through external circumstances.
Thinking of a business model only from the perspective of competition is
no longer enough today. However, it is a very good beginning, because history
teaches us that companies that have been in the lead for a long time are hardly or
not at all concerned with new business models. Apple is a good example of the
opposite: With the bold iTunes Store at the time, the company created a really
clever new business model that also heralded the final end of the lucrative CD
sales of the established major record companies.
What must the Nokia managers have thought when the Apple people started
thinking about the smartphone in a completely new way in 2007? Not only with
a much larger screen, without any buttons and with a closed system (from which
it is so difficult for the customer to break out) as well as coupled with iTunes—
which in turn created a completely new business model!
What did the VW and BMW managers think when they learned about the
beginnings of Tesla and when Elon Musk announced that he would sell his vehi-
cles directly to end customers through so-called “Experience Stores”, which com-
pletely turned the dealer business model upside down? I remember very well the
Australia manager of one of the largest German supplier companies who four
years ago predicted a dark future for Tesla. So it is this feeling of security and
thinking from a size perspective that will eventually be the downfall.
So a good business model is up to date and does generate profits, but it is not
as fast in adapting to the respective circumstances as an excellent business model.
The Three Business Model Categories

We now divide the logistics service industry into three different categories, which
have partly the same or also completely different business models:
• Category 1: Highly capital intensive

This category includes companies that are highly capital and asset intensive,
such as shipping companies or airlines. These companies have the disadvan-
tage that they have to incur very high capital costs to create their offer (of the
same assets such as ships and planes), to operate them and to expand. Their
great advantage is that it is very difficult for their competitors to jeopardize
their business model—due to the high material and financial entry barriers.
• Category 2: Low capital intensity
These are companies that are less to moderately capital intensive, such as
freight forwarders, ship brokers or logistics real estate developers. Most of
these companies maintain their own or partly own fleets or a global office net-
work and have often been around for 30 to 50 years, in some cases for 100
years or more.
• Category 3: Start-ups/Post-Start-ups
These often copy the existing business model of Category 2, but due to the
high digitalization of the processes, they can realize this business model at
much lower costs. In addition, these companies operate highly automated, so
that a higher turnover per FTE (Full Time Employee) is possible and the man-
tra is not “More turnover = more employees”, but “More turnover = higher
scalability” and a dynamically increasing result per employee is achieved.
The business models of Category 2 are under the strongest pressure, as they are—
as already mentioned briefly—endangered by the technical component of Cate-
gory 3 and questioned in their existence by Category 1.
 A missing or insufficient further development of the business model

can mean the death of the respective company!
A good diagram that really shows everyone the danger of an exponentially

increasing development is Fig. 2.1. You can see a linear curve that represents the
linear growth of a company. Most processes in companies (budget and planning
phases) are based on linear growth because this was the most common develop-
ment in many areas a few years ago. Only in recent years have there been a num-
ber of exponential developments such as:
• CO2 emissions caused by humans,

• population growth,
• increase in heat and rain periods,
• increase in mental illnesses among workers,
• increasing amount of information that a person has to process every day,
• increasing sales and market share of new market participants.
LINEAR VS. EXPONENTIAL GROWTH
1000
800
600
400
200
0 1 2 3 4 5 6 7 8 9 10
Exponenal Growth Linear growth
Fig. 2.1  Linear vs. Exponential Growth
This list could be continued indefinitely. The examples given may be very differ-
ent, but they share one important aspect: they are difficult or impossible to pre-
dict!
So how can it be possible to keep this development in check, for example
when it comes to the growing market share of an important competitor? The
only, in my opinion, effective recipe is the continuous rethinking, adaptation and
optimization of one’s own business model. Inseparably connected with it is the
innovative power, i.e. the creation of new products that prove themselves on the
market. For this you need a good portion of humility and the serious question-
ing of your own status quo. Probably the aforementioned companies Nokia and
Quelle did not have or did not do just that.
It seems to me that many companies have lost courage since the optimization
excesses of the 2000s, which were called all sorts of nice names like Six Sigma or
Kanban. The reason for this is as simple as it is dangerous: Due to the efficiency
gains through the permanent optimization of processes, at a certain point no one
dares to question a process or a product as such. The result: The products wear
out over time, meet increasingly less enthusiasm among customers, and new com-
petitors invent completely new products or business models.
Because large corporations have difficulty keeping up with exponential change
due to their wealth of processes and the resulting excessive bureaucracy, they set
up innovation hubs, so-called “accelerators” or “venture capital funds”, in order
to buy innovative creativity. This may be justified in some cases, for example to
develop new technologies, but all too often this is associated with the unrealis-
tic expectation or hope that this will change the entire company innovatively. As
a result, most “accelerator” programs fail or are discontinued after a very short
time. It would be better to systematically make the entire company agile, fast
and resilient against disruptive competition. The central core of this project is the
business model.
How do you know that you need to adjust your business model to the changed
circumstances or even need a completely new business model? The following
questions will help you find an answer:
• Have your main revenue drivers of the last five years stagnated or even
declined?
• Is the percentage of revenue from products that are less than three years old
less than 10%?
If you answer these questions with a yes, then it is high time to get to work! The
first step is therefore:
 Take a close look at the needs of your customers!
In order for the existing business model to be optimized at all, you need to take a
close look—and I really mean take a close look—at the needs of your customers.
The following questions will help here:
• How well do you know the existing and anticipated needs of your customers?
With the latter, it is important to clearly distinguish between what a customer
wants, and what she actually needs.
• What feedback is currently being provided by all functions in direct customer

contact (Customer Service, Operations, Sales) to Product Development?
• What platforms are available for exchange?
You must also deal with geopolitical developments that can affect your busi-
ness model, such as global pandemics or natural disasters. For this you need risk
management that not only assesses the risks regarding the current impact on the
company, but makes it clear how resilient the business model is against a similar
future crisis. I already mentioned the CEO of the aviation group who did not take
a pandemic into account in his remarks. Was this really one of the much-quoted
“black swans”, an unexpected or unlikely event? Not at all, because pandemics
have always existed in human history. The best known is the Black Death in the
fourteenth century. A less well-known but very deadly pandemic was the Spanish
flu, which raged all over the world a little over 100 years ago. But at that time the
world was in no way comparable to ours today in terms of globalization. As more
and more parts of the planet were settled and an exponentially increasing amount
of travel was recorded, but hardly any investments were made in a global pan-
demic early warning system, it was only a matter of time before something like
the Coronavirus pandemic occurred.
You may now object that one can always be always wiser after the fact. How-
ever, it must be countered that there were indeed voices that warned in good time
before such an event, including Bill Gates in a much-publicized speech from
2015 (TED 2015). In a style almost reminiscent of Orwell, this speech seems
almost ghostly realistic when you look at its wording today. Bill Gates predicted
that if something would kill several million people in the next few years, it would
be a pandemic and not a war. Nevertheless, the states had invested disproportion-
ately more in military armament than in an effective pandemic prevention sys-
tem. At that time, the Ebola virus raged in West Africa, and it remained a regional
event because the virus was not transmitted through the air and, secondly, the
often poor residents of West Africa were only able to travel internationally in
exceptional cases.
You can see from this that when revising and developing a business model,
you also need to deal with scenarios that may occur. If you imagine such scenar-
ios, you can compare them with the current business model and check how stable
this is against such events. Data-based tools like EIDOS® can help with this.
Let’s now take a look at the most common business models in the logistics
service industry and how scenarios can be developed to be as resilient as possible
for the future.
2.2 The Business Models in the Logistics World
2.2.1 Category 1: Capital-Intensive Shipowners

and Airlines
Market Share Overview or the Oligopoly of the Top Five

On the one hand there are the container shipping companies: an oligopoly in
which the top five control around 65% of the entire market (see Fig. 2.2) and
whose market share has increased massively in the last ten years. The shipping
companies are extremely capital-intensive and, after a break of about five years,
have been competing to place orders for new ships with a berth capacity of up to
24,000 TEU (TEU = 20 ft standard container) between 2019 and 2021. Typically,
the delivery of the completed ships takes place two and a half to three years after
the order is placed.
MARKET PART
Maersk 17%
Mediterranean Shg Co
(MSC) 15.9%
COSCO Group 12.9%
CMA CGM Group 12.4%
HAPAG-Lloyd 7.1%
ONE (Ocean
Network express) 6.5%
Evergreen Line 5.2%
HMM Co Ltd 2.9%

Yang Ming Marine
Transport Corp. 2.6%
Zim 1.5%
0% 2.5% 5% 7.5% 10% 12.5% 15% 17.5% 20%
Fig. 2.2  Market share of shipping companies. (Source: Statista 2022)

2.2 The Business Models in the Logistics World 25
On the other hand, there are forwarders and, as well as, companies that send con-
tainers to shipping companies without the help of forwarders. Forwarders could
not be more different to shipping companies in terms of their market position-
ing than they are currently: They are part of an extremely fragmented market in
which the top five account for less than 10% (!) of the world market. In addi-
tion, they are less capital-intensive, that is, not a single forwarder has a ship with
which he could cover the container transport volume attributable to himself.
Rather, the forwarders take on the role of a middleman, since they are positioned
between the customer and the shipping companies with regard to the mediation of
the transport volume. Their position is similar to that of an online platform for the
mediation of air travel, which is positioned between the airlines and the customer.
The “Amazon effect” in the Logistics Industry

The notorious “Amazon effect” has now also affected the logistics industry. With
the term “Amazon effect” I refer to the trend that a company is striving to control
every single point of contact of a customer with the acquired service itself. Since
the shipping companies are increasingly confident that the key assets (e.g. ships
and terminals) are subject to their control in the supply chain, they are strongly
interested in eliminating the forwarder as an intermediary in order to have direct
access to the customer and to control the entire process.
However, forwarders currently still offer a variety of services that some shipping
companies do not yet have in their portfolio (e.g. customs clearance, LCL and so-
called Buyer’s Consol). In order to close this portfolio gap, in particular the lead-
ing shipping companies have integrated a large number of traditional forwarders
into their respective companies in the past twelve months (see MAERSK with
Damco and CMA CGM with Ceva) and have acquired additional expertise (e.g.
customs clearance agents).
Another very important component in this market is the massively increased
demand for transport capacity from China, which is partly due to the fact that
people worldwide are increasingly doing their shopping online during the Cor-
onavirus pandemic. A significant proportion of the goods affected come from
China. So certainly part of the enormous increase in freight rates is due to the
sharply increased demand. But that’s not even half the truth!
Good Times for Shipping Companies

Almost all shipping companies have been writing off high losses over the last five
years and have now recognized the opportunity: a demand for ship space that has
increased massively within a short period of time and no possibility to increase
freight capacity (neither by themselves nor by a competitor, which is related to
the years-long lead times of the shipyards). In addition, there was the Suez Canal
crisis (you remember the Ever Given, which blocked the Suez Canal for eight
days in March 2021) and repeated local Coronavirus outbreaks in China, as a
result of which important ports were shut down to a few percent of their actual
capacity.
In the first half of 2021, Maersk achieved a staggering net profit of $6.5 billion.
Estimates suggest that the container shipping industry will generate a net profit of
more than $100 billion for the first time in its history in 2021 (Holt 2021). Pretty
much the same can be said about 2022. This makes it possible to build up huge
cash reserves, with which new markets can be opened up and competitors can be
taken over excellently. This is what happened at Maersk: The Danish container
giant has taken over the Dutch KEP provider B2C (Maersk 2021b). Furthermore,
Maersk has acquired LF Logistics, an Asian logistics provider, for more than $3.6
billion (Gronholt-Pedersen and Jacobsen 2021).
The opposite—taking capacities out of the market—is, on the other hand,
possible in the short term and without any problems. This happened above all in
2020, when the share of so-called blank sailings amounted to 15% and was sig-
nificantly higher than in previous years (ShipInsight 2021).
In view of the good market situation, the question arises as to whether it is at
all possible to “disrupt” the business model or this unfolding unbreakable oligop-
oly of the shipping companies. Various scenarios are conceivable:
a. External Competitively Delimiting Influence: Inshoring Production

You avoid transporting the goods by “Inshoring”. This means that production
capacities are deliberately built up in the country in which the respective product
is sold most. In an interview that n-tv conducted with me in November 2021, I
put forward the thesis that the persistently high freight prices will also prompt
established import companies to rethink their procurement. For most import com-
panies, the business model has been to produce cheaply in Asia and then bring
the goods to the European sales market in a cost-effective way. In view of the
currently high freight prices, this business model is obsolete because it simply
does not pay off anymore. Furthermore, the increasing “green consciousness” is
influencing purchase decisions, so that Inshoring is further accelerated. You can

read the complete interview in Sect. 2.7.
b. External Competitively Delimiting Influence: 3D Printing

Important parts or machines can now be produced using a 3D printer. Whole
houses or cars can be produced in this way—not yet in the usual quality of sepa-
rately produced products, but also the quality of 3D printing is increasing rapidly.
The KEP companies FedEx (Scott 2018) and UPS (Weize 2016) take this dis-
ruptive scenario so seriously that they are pumping massive amounts of money
into research and development of their own 3D printing technology in order to
be leaders in these solutions in the coming years. The calculation behind this: the
declining volume of shipments is to be compensated by new sources of income!
c. Competitively Relevant Influence: Consumer Behavior

Similar to the trend of eating vegetarian or vegan only, a trend may develop
according to which products that have to be brought to us over long distances
are less desirable for certain consumers because the long transport route has
harmful environmental impacts. It is conceivable that these products are labeled
with information about the transport-related CO2 emissions—similar to the cal-
orie information on food packaging. However, changing consumer behavior is
extremely costly and laborious: Not even one percent of all private customers
at Lufthansa decide to pay a surcharge for the CO2 compensation of the flight
booked by them (Hegmann 2021). The influence of consumer behavior on the
transport volume of the container industry therefore remains questionable.
d. External Competition Influence: The First Digital Shipping Company

The establishment of a new shipping company by the forwarders is probably the
most radical way to make life difficult for the established shipping companies.
For many years it has been unattractive for investors to invest in shipping com-
panies or even to seek majority stakes, as there have been many good, but also
extremely bad years. The main reason for this are the enormous capital costs,
which have to be borne for the purchase of the ships as well as permanently for
their maintenance and technological upgrades.
Now the oligopoly is experiencing good times without any end in sight. This has
not happened even during the conference times in the 1990s and 2000s: Then
whole areas of navigation were divided between the shipping companies in
annual conferences, before the European Union put an end to it in 2006.
As with any boom, there are some stories s that look much better than others.
The key to a shipping company is the maintenance costs and the art of ensur-
ing the maximum and permanent utilization of transport capacities. Not least for
this reason, the shipping companies have a great need for digitalization, but there
are individual exceptions. Hapag-Lloyd, for example, currently earns the most per
container because the group has very consistently digitized all value-adding pro-
cesses already and at any time measures the revenues of its customers or with
booking software can optimally design the offer for profit maximization. 
One scenario would be for an investor or shipping consortium to purchase a
slightly struggling or comparatively weak shipping company, modernize it in its
entirety, and thus build up a counterweight to the shipping companies. A disad-
vantage of this scenario would be that the forwarders involved would certainly
become “persona non grata” with other shipping companies. But how bad would
that really be, especially since most forwarders already feel like this because of
the poor service, the often-complained-about unreliability, and other problems.
One would have to check whether such an approach can be excluded on competi-
tion law grounds. A similar construct has existed for years and very successfully:
the intermodal association “Kombiverkehr” (Kombiverkehr Deutsche Gesells-
chaft für kombinierten Güterverkehr mbH & Co. KG 2022). It is characterized by
a peaceful and fair coexistence between 230 (!) logistics service providers and the
monopoly Deutsche Bahn. The transport companies involved in Kombiverkehr
KG and DB Cargo are focusing on expanding the joint network into a real timeta-
ble operation.
Overall, it must be noted that the container shipping industry is much less trans-
parent than many other large industries and is long overdue for a disruption. But
instead, a rationalization has been taking place for years, in which the big ones
absorb the small ones. But since the fast are eating the slow in many places today,
the scenario described previously is not entirely unrealistic. For this, a small
group of financially strong logistics service providers is required, which acquire
a medium-sized shipping company and thus ensure a little more equality of arms.
Arms Race and Bet on Economies of Scale

And what are the world’s largest shipping companies doing? Their calculus is
very simple: building sheer size. As you may know, MSC and Maersk have been
locked in a bitter battle for the top spot with the largest market share (by con-
tainer berth capacity in the total fleet) in the container shipping industry for about
two decades. Currently, Maersk is just ahead of MSC, but will very likely have to
hand over the top spot to the Italians for the first time in the next twelve months.
Both companies then have a global market share of just under 20% (!) (Statista
2022). This is completely unthinkable for any other area in the logistics industry
with a comparable size of market.
Achieving such a market share cannot be accomplished purely organically. There-

fore, in particular, Maersk has systematically acquired other competitors in the
last 20 years: P&O Nedloyd and Hamburg Süd are the most prominent examples.
The more containers a ship can take on, the better the overall costs can be allo-
cated to the containers and thus the margin can be increased. What this can lead
to in times of massive freight price increases is shown by a look at Maersk’s bal-
ance sheet figures for the first half of 2021: an operating profit of an amazing
6.5 billion US dollars is reported there (Maersk 2021a). In other words: over a
billion dollars in profit per month! Maersk has more than tripled its profit com-
pared to the same period last year. Of course, the management of the company
will assume that it is rightfully so successful, after it had suffered massive losses
mainly in the years up to 2018. Nevertheless, it is never good for the innovation
process if only a few players each have a very large market share.
In the home computer sector, for a long time there were only two alternatives:
Apple or Microsoft. Nevertheless, both companies have surprised the market and
thus the customers with new products time and again. So it is not necessarily the
case that the ability to innovate suffers when competition is restricted in the sense
that the market shares are distributed among only a few players.
But why is this perceived differently in relation to the shipping companies?
Most forwarders I speak to loudly complain that the good old merchant’s word
has now become obsolete. A Hamburg-based traditional forwarder, whose com-
pany has been successfully operating on the market for 140 years, told me that he
had once been a Global Key Client and had only dealt with the top management
of one of the top five shipowners until he was suddenly presented with a new
team and downgraded to a Global Forwarder customer. Although he was assured
that nothing would change for him, the service suffered noticeably. The affected
company moves just under a million TEU per year, so it is by no means a small
fish. Another forwarder complains that the transport business operated in partner-
ship mainly between Europe and South America for years is increasingly becom-
ing a victim of so-called direct carrier deals: The shipowner no longer quotes for
the forwarder, but approaches the customer directly and thus does everything in
its power to acquire the business itself.
After the The winner takes it all principle, Maersk is currently trying to draw
all customer value creation in logistics to itself. Maersk and the other large ship-
ping companies know only too well that you cannot get around them because no
one else owns container ships and can transport goods on the world’s oceans. The
forwarders have to submit to this, they simply have no other choice. However,
what they do have is the ability to shift into a much higher gear of innovation:
finding out more about the customer and their hidden needs.
The largest advantage of the forwarders over the shipping companies is based
on the extensive relevant knowledge regarding the forwarding business. The ship-
ping companies that want to take this business for themselves first have to acquire
this knowledge with great effort. In addition, a logistics service provider can offer
a variety of services that a shipping company does not have: above all, its neutral-
ity and its flexibility in choosing the space on the ship. However, the latter fell far
behind in recent months, as many forwarders were hopelessly overwhelmed by
the capacity problems that arose during the Coronavirus pandemic and, in par-
ticular, after the blockage of the Suez Canal. Although many forwarders recorded
record profits, they were still more in the wake of the wave than surfing it con-
fidently. Exceptions such as Expeditors International and DSV Air & Sea are
exceptions that confirm the rule.
So what will be the goal of MAERSK, MSC, CMA CGM, Hapag-Lloyd and
Co.? The acquisition of Senator International by Maersk shows that they want to
control the entire process. Of course, the numbers that a shipping company gener-
ates with this (in the traditional freight forwarder environment) are low, but please
remember the exponential curve that remains flat for a long time until it suddenly
increases sharply and cuts into the established market!
The Tension With the Customers (Freight Forwarders)

The relationship of the freight forwarders to the shipping companies has always
been fragile, but this fragility has now reached a new dimension not only for the
reasons described above. There is a great deal of mistrust between the two parties
because the shipping companies are increasingly attacking the business of their
own customers and the freight forwarders have to pay the price if there are mas-
sive misloads and guaranteed transport capacities are cancelled at short notice. Of
course, this can’t go on forever.
Imagine the following scenario: You have been bidding for years on a large
tender, say 3000 TEU, and have always been offering with CMA CGM, partly
also with MSC. Now you learn from your customer that this one will also invite
shipping companies to the tender. As a result, your customer invites CMA CGM
to submit a bid as well. Now two options are conceivable: Either CMA CGM
politely declines and refers to the already existing participation by your company,
or CMA CGM submits a bid and terminates the cooperation for this customer
with you. In any case, it is extremely important that your product manager is in
close exchange with your sales department, so that—if something like this hap-
pens or is about to happen—this is anticipated in time.
Someone once said that it is important to keep your friends close and your
enemies closer still. From this it follows that as a sales manager you have to deal
much more with the shipping companies. In addition, there will be differences,
that is, there will also be shipping companies that are not quite as forceful with
you as others. The instrument you have in your hand and with which you can
exert pressure is the volume you can withdraw from the shipping companies and
give to the competition.
How delicate this can sometimes be is shown by the example of Schenker and
Maersk, after Maersk had stamped out the in-house shipping brand Damco for
reasons of market rationalization. When this happened at the end of 2020, Schen-
ker openly declared to all then existing Damco customers that they wanted to
match their rates (Jakubowska 2020). Maersk reacted angrily and immediately
terminated all existing rate contracts with Schenker and declared Schenker to be
“Spediteur non grata”. Schenker had completely miscalculated and underesti-
mated Maersk’s appetite for freight volume and market share.
This underlines the plans of Maersk or other shipping companies to wrest as
large a market share from the freight forwarders as possible. The underlying con-
sideration is as simple as this : Imagine you are the shipper of a good, that is, the
customer. Why should someone be intermediated between you and the shipping
company as the owner of the cargo ship and make your life more difficult than it
already is? In addition, this would mean that this middleman would take a piece
of the cake.
One could object that the shipping companies do not want to get rid of the
freight forwarders completely, but are willing to give up a certain capacity share
to them—probably 25 to 30%—to sell them to the highest possible spot rates.
This would create a very profitable mix calculation for the shipping companies.
You can see: The shipping companies are significantly less threatened with
extinction than the freight forwarders. Solely due to the special market constel-
lation, the freight forwarders are far more dependent on the shipping companies
than vice versa. In addition, some of the largest shipping companies can rely
heavily on the help of their home country. This definitely plays a significant role:
In the case of Hapag-Lloyd, the German state intervened with billions after the
financial crisis in 2008 to avert insolvency (Jakubowska 2020).
To offset this unfair advantage, it is necessary to redefine the rules on the part
of the logistics service providers. At present, however, hardly any logistics service
provider dares to do this, and this is reflected in the low single-figure percentage
stagnating margins.
One almost gets the impression that a widespread lethargy has taken hold in
the logistics service market, but there are exceptions that will be presented below.
Furthermore, we will take a closer look at the secrets of two “brand stars”. These
are companies for me that have constantly increased their margin over several
years and are well above the industry average of 3 to 4% EBIT margin. And last
but not least, you will see that most of these secrets are also applicable to other
companies—regardless of the size of the company.
But let’s first deal with the question of why the logistics service industry is
characterized by such weak margins.
2.2.2 Category 2: Less Capital Intensive—Carriers
A carrier organizes the transport of goods from A to B or takes over the storage
of goods. Most carriers generate a low margin for the effort and pressure they are
exposed to, in the single digits. The first and nevertheless most important reason
for this is the very difficult market situation from which no logistics service pro-
vider can escape: Due to the extremely fragmented market situation, there is sim-
ply too much choice for customers, in whose eyes each of the providers does the
same as its competitors. Furthermore, the entry barriers into the market are very
low. So you don’t even need your own assets, as digital carriers have been doing
more recently. Since one can traditionally only charge small surcharges for ser-
vices that one buys elsewhere (for example, the physical sea or air freight trans-
port), a clever portfolio is needed that allows a large number of logistics services
to be offered in-house as a whole and thus to gain an advantage over the competi-
tion. Good examples of this are logistical additional services such as the assembly
of semi-finished products in the warehouses or relevant IT products that can be
developed completely in-house and thus sold to any number of customers.
Most logistics service providers also have the problem that they still offer their
services according to the one-size-fits-all principle, instead of using smart solu-
tions to set themselves apart from the competition. Furthermore, there are hardly
any differences in the way in which the companies serve certain customers, let
alone a selection process with which customers they actually want to work with.
The internal costs are too high, too much manual work is necessary and the IT
processes are too little thought out. This results in a vicious circle from which it is
difficult to break out. You have to take a step back in terms of turnover or number
of customers, in order to take two to three steps forward in terms of margin.
Lack of Further Development of the Forwarding Model

Everything that can be digitized will be digitized sooner or later. This is imme-
diately clear to all of us. This includes, for example, the classical processing of
a logistics order. So it is only a matter of time until more and more processes
are taken over by computers and thus the price for classical logistics services
decreases. Clever and brave logistics companies prepare for this development
by doing everything they can to become a serious protagonist in the field of new
technology. As described above, FedEx and UPS maintain their own research
centers in the USA to promote the technology of 3D printing. The consideration
that lies behind this is as follows: If this technology will have a significant impact
on the international express spare parts business in a few years—and these com-
panies expect this—then both companies want to be able to offer their customers
the best 3D printers as an alternative to spare parts procurement. This may appear
radical at first glance, but it is not in view of a trend that cannot be stopped! The
key is to recognize such trends in time, to consistently build up sufficient exper-
tise and to adapt one’s business model accordingly. For this to succeed, a serious
culture of innovation is absolutely essential. Successful innovators always empha-
size how important it is to look out for game-changing trends and then to use
them for themselves.
However, the classical logistics service providers do not really develop their
traditional forwarding model, but rather fresh paint is brushed on the old rust. A
first meaningful step towards an improved business model can be based on the
following guiding principle:
From a Product-Related Sales Model to a Solution / System Model

Focus on a holistic solution sale, that is, selling the “entire system” to the cus-
tomer—that is, the complete portfolio, so that really all customer requirements
can be covered. As one Chief Commercial Officer of a leading logistics provider
confirmed to me in a conversation, for example, air and sea freight is only a driver
for customer development as a distinguishing feature, because there would be no
differentiation in the offer for individual products. Accordingly, the actual selling
is getting more and more complex.
As far as Solution Selling is concerned, it should be said here that first of all, sales
must be able to think in “strategic” and “tactical” terms and feel confident about
it. In my experience, it is the case that tactical issues (the “how”) are discussed
much too early, instead of taking the time to think together with the customer
decision-maker about the strategic goals (the “what”). However, this is precisely
what is required in order to offer a holistic solution. This may sound cumbersome
at first, but it is well worth it, as you will see from the following concrete exam-
ples.
Success Factors of the “Margin Stars”

There are companies in every industry that seem to have a golden touch, appar-
ently everything they do is successful. These companies perform significantly
more successfully than their similarly sized rivals over a longer period of time.
The two companies that I will look at in more detail below are DSV Air & Sea
and Expeditors International.
Both companies are comparable in terms of their sales figures (approx. 10 bil-
lion euros in annual sales), but there is a significant difference: DSV Air & Sea
has been growing rapidly through acquisitions for years, while Expeditors Inter-
national has been growing organically by 100%. So if anyone thought that higher
margins could only be generated through acquisitions, they may be right in iso-
lated cases—for example, when entering new markets—but in the long term, an
extremely profitable logistics company can be developed completely organically.
What the two companies have in common is an almost double-digit EBIT per-
centage result and thus twice the result achieved by the average of the ten largest
logistics companies worldwide, which is around 4.5% (Statista 2021). I am delib-
erately referring here to figures that were before 2021, i.e. before the influence
of the Coronavirus pandemic, in order to exclude any margin-distorting influence
that could be caused by the pandemic. Figure 2.3 illustrates this very well.
Let’s now look at the EBIT percentage figures for the years 2016 to 2020 and
compare them with each other (see Figs. 2.4 and 2.5).
Despite several acquisitions, DSV Air & Sea has increased the EBIT margin
relatively by more than 50% (!) from 2016 to 2020, namely from 5.1 to 8.2%.
The turnover increased by more than 100% in this period. Thus, DSV Air & Sea
has been able to use the so-called Economies of Scale excellently.
Expeditors International only grew by 70% in terms of turnover in the same
period, but has a constantly high EBIT margin of between 9 and 10%. This makes
Expeditors International the industry leader.
Let’s take a look at the world’s largest logistics company Kühne + Nagel
(approx. 21 billion euros in sales) for comparison. As we can see in Fig. 2.6,
its EBIT margin has been stagnating for years at 5%. Moreover, its revenue is
growing much slower than that of Expeditors International or DSV Air & Sea.
EBIT margin
Comparison of key company figures1
Fig. 2.3  Margins of the largest logistics companies. (From Paulsen 2020; with kind per-
mission from © DVV Media Group GmbH 2020. All Rights Reserved)
DSV AIR & SEA
Financial raos
in % 2020 2019 2018 2017 2016
Gross margin 24.6 25.1 22.1 22.2 23.4
Operang margin 8.2 7.0 26.9 6.5 5.1
Fig. 2.4  DSV financial results. (Source: DSV Global Transport and Logistics 2021, p. 8)
EXPEDITORS INTERNATIONAL
In thousands,
except
per share data 2020 2019 2018 2017 2016
Revenue $ 10,116,481 8,175,426 8,138,365 6,920,948 6,098,037
Operang income $ 940,437 766,692 796,563 700,260 670,163
9.3 9.3 9.8 10.1 10.9
Fig. 2.5  Expeditors International financial results. (Source: Expeditors International of

Washington Inc. 2021, p. 22)
The EBIT margin of 5% is still above average, but it is far from the top values
achieved by DSV Air & Sea and Expeditors International.
In the following, I would like to highlight some of the things that make Expe-
ditors International and DSV Air & Sea really great and from which your com-
pany can learn and benefit.
KUEHNE + NAGEL
CHF million 2020 2019 2018 2017 2016 2015 2014
Sales 23,812 25,295 24,825 22,220 19,985 20,283 21,291
Net sales 20,382 21,094 20,774 18,594 16,525 16,731 17,501
Gross profit 7,475 7,981 7,709 7,023 6,550 6,251 6,288

as a percentage 36.7 37.8 37.1 37.8 39.6 37.4 35.9
of net sales
EBITDA* 1,920 1,829 1,209 1,150 1,110 1,041 1,005
as a percentage 9.4 8.7 5.8 6.2 6.7 6.2 5.7
of net sales*
EBIT* 1,070 1,061 987 937 918 850 819
as a percentage 5.2 5.0 4.8 5.0 5.6 5.1 4.7
of net sales
Fig. 2.6  Financial results of Kuehne + Nagel. (Source: Kuehne + Nagel International AG

2021, p. 2)
Success Factors
1. Exact knowledge and cost measurement of all activities in the company
2. Highly selective customer acquisition
3. In-house IT solutions
4. Consistent financial understanding at all levels of employees
5. Above-average employee retention
6. Performance culture/Annual revenue per employee
7. Permanent solution selling and irreplaceability
8. High demands on subcontractors
9. Never being satisfied with the status quo
1. Exact knowledge and cost measurement of all activities in the company

Both DSV Air & Sea and Expeditors International are masters at really all
activities, in particular customer activities and associated process costs, to
measure. Where other companies only measure the gross revenue of a route
or their customer groups, the two companies consistently operate an activity-

based cost analysis. In addition, at Expeditors International, a true army of in-
house consultants is available to permanently optimize processes and/or to tap
into hidden potential.
2. Highly selective customer acquisition
In particular, Expeditors International thinks very carefully about which cus-
tomers the company wants to bid for and which not. Probably Expeditors
International rejects more business requests and requests to participate in ten-
ders than it accepts or participates in tenders. This is because Expeditors Inter-
national always requires a long-term partnership and pursues this long-term
approach very consistently.
DSV Air & Sea is somewhat less choosy in this respect—solely in order to
drive sales growth permanently—but is basically also very keen to enter
into long-term customer relationships. For example, at the turn of the year
2021/2022, the company offered more three-year contracts in sea freight.
These rates were significantly better than those for a quarter or a year, as the
relevant customers and volumes were to be bound to the company for longer
than ever before.
3. In-house IT solutions
Both DSV Air & Sea and Expeditors International have IT solutions that are
absolutely world-class, and they work very data-driven in general. This frees
up decisions from emotional or ego influences as much as possible, and the
number of wrong decisions is minimized. While this requires more effort in
terms of building up own IT resources, it pays off in the long run: On the one
hand, the dependence on external IT service providers is reduced, on the other
hand, highly individual customer IT solutions are created that can hardly be
copied, let alone improved by the competition. Another advantage of this
very data-driven culture is that new customer needs can be anticipated more
quickly.
4. Consistent financial understanding at all levels of employees
In the case of Expeditors International, the profit and loss statements of the
respective branch are explained to trainees and discussed in detail with them.
And that happens month after month, all year round. In contrast, there are
countless corporations in which you, as a manager in the middle level, do not
even get close to these numbers. You are probably wondering quite rightly
how you can hold employees responsible for numbers to which you deny them
access!
Also keep in mind that both DSV Air & Sea and Expeditors International are
publicly traded companies. This means that every person in the world can gain
insight into the business reports of recent years. Keeping important business
key figures under lock and key is an indication of an outdated elitist manage-
ment understanding in which a large proportion of the employees is not fully
taken into account.
5. Above-average employee retention
A number upfront: The average length of employment for a top manager at
Expeditors International is more than 20 years (Expeditors International of
Washington Inc. 2022). Hand on heart: Would you have thought that possible
for a publicly traded logistics company? I know family-run businesses—worth
between 100 million euros and more than one billion euros—where there have
been five changes in top management in the last ten years. The unusually long
duration of employment of more than 20 years is also found in the operational
staff of Expeditors International. And DSV Air & Sea also has above-average
employee retention. Both companies attribute this to the fact that, in addition
to the mentioned complete transparency with regard to business figures, spe-
cial value is also placed on performance-based compensation models for all
employees and exciting further education opportunities.
6. Performance culture/annual revenue per employee
If you visit the company Expeditors International and talk to some of the
employees, one thing is really fascinating: the absolute willingness of the
company’s employees to be the best—every day. This ambition and the high
demand on oneself are certainly not for everyone. Even a Bundesliga team
is not for every football player, but all the more desirable for those who are
really willing to work hard to be able to play at this level in the long term.
This probably also explains why Expeditors International, with “only” 17,500
employees worldwide, generates more than ten billion dollars in annual rev-
enue. The annual revenue per employee is 571,000 dollars and is a world-wide
top value for a company of this size. For comparison: DSV Air & Sea gener-
ates an amount of 350,000 dollars and Kühne + Nagel an amount of about
300,000 dollars.
7. Permanent solution sales and irreplaceability
DSV Air & Sea is convinced that valuable additional products such as favora-
ble financing instruments make it even more difficult for the customer to
break away from the company. This makes the product act as a kind of “mar-
gin insurance”. There are great incentives in sales to sell such new additional
products along with traditional services such as air and sea freight process-
ing. As far as Expeditors International is concerned, it has already been men-
tioned that the company only makes offers if it really has the impression that
the potential customer wants to commit herself comprehensively.
8. High demand for subcontractors

DSV Air & Sea and Expeditors International know very well that their suc-
cess is not insignificantly dependent on the performance of their partners or
subcontractors (for example, handlers at airports and truckers). The selection
of these partners is therefore subject to extremely strict requirements, as con-
firmed by several subcontractors independently of each other.
9. Never being satisfied with the status quo
With such dreamlike EBIT figures as those achieved by DSV Air & Sea and
Expeditors International, there is of course the danger that the companies will
become self-satisfied and slow down, once they begin to perceive success as
a constant. But this is not to be feared with either company. DSV Air & Sea
is growing and growing and growing. No acquisition seems to be too big, and
the pace at which the company is doing it is breathtaking. Expeditors Interna-
tional, on the other hand, relentlessly pursues its organic course and sets itself
incredibly ambitious growth targets. It seems to be completely irrelevant that
the company is already number one in terms of profitability and growth rate.
The goal of both companies: Build the lead over number two so far that you
actually become unbeatable! That’s exactly what other companies are doing
in their various industries. The most prominent example of this is Google. The
lead of Google in the search engines has become so great that the number two
is no longer known.
The Most Important Levers for Gross Margin—Now and in the Future
Below is a practical guide on how you can sustainably improve margin in your
company. For this there are three levers that you should definitely know:
1. Continuous measurement of the ratio of gross profit growth to volume growth

2. Activity-based cost analysis (ABC)
3. More courage for innovations
Let’s take a closer look at these three levers:
1. Continuous measurement of raw yield growth to volume growth

In most companies, an almost frightening wealth of numbers is collected on
everything, with which the sales are confronted, but the few really important
key performance indicators (KPIs) are often not available. One of these really
important KPIs is the ratio of margin growth to volume growth.
During the “rate party” usually very one-sided attention is paid to the mar-
gin growth, while the volume growth is completely out of sight in the pursuit
of ever higher temporary profit. This leads to the fact that sales celebrate, for
things for which they are not responsible at all. Because the high profit is due
to an explosively increased demand with tight transport capacities, it is only a
matter of time before the rates fall sharply. Then the competitor who can show
a healthy volume growth wins out.
2. Activity-based cost analysis (ABC)
How high are the process costs that a customer causes? Pure customer profit-
ability measurements are completely insufficient to determine the actual service
and process costs in order to answer this question. However, they are often used
as the main data source for strategic decisions in practice. The customer profita-
bility measurements are insufficient in that they only measure sales minus costs
and then set them in relation to the total number of employees plus customers.
So everything is lumped together, and a urgently needed differentiated view at
the customer level does not take place. This is fatal because there are customers
for whom a significantly higher manual effort is required than for others. For
example, if the customer sends orders by e-mail or as a file to the company con-
cerned and the order has to be re-entered manually by the operational depart-
ment. In sharp contrast to this are customers who automatically communicate
orders, for example via EDI. Of course, there was a certain initial effort (and
thus a one-time effort) for these customers, but it quickly amortized. Such a dif-
ferentiated view is not taken in most companies. The disadvantage is that these
companies cannot determine precisely with which activity you spend and earn
money and, conversely, make optimizations. Figure 2.7 shows activity-based
cost analysis and, in the following, some points with which optimization can be
started. Prepare a mapping of all activities and categorize them.
• Measurement of the duration of activities: Next, take ten customers and,
over a period of three to four weeks, find out how much time the activi-
ties related to these customers have actually taken. At the same time, it is
important that you talk to your employees in order to identify important
patterns. Your employees can tell you exactly where optimization potentials
exist, and often even better than data (for example, when it comes to more
efficient processing of customer requests).
• Automated measurement: Systems like CargoWise can provide ABC analy-
ses. However, it is even better if you can adapt your own systems so that
you can run these surveys automatically.
• Continuous adjustment and mapping: Please keep in mind that you know
and want to measure 80 to 90% of the most important activities—therefore,
do not strive to know 100% of all sources. This would make you too slow
to start, and you can still do that once you have picked up speed.
ABC ANALYSIS PROCEDURE
Identify activities that consume resources.

1 Allocate costs to these activities
2 Identify the "causal" cost

drivers for each activity
Classify main categories to the activities,

3 hierarchized by cost level
Calculate a cost driver rate by

4 cost driver unit or transaction
5 Assign costs to products: Cost driver rate x number of

cost driver units consumed by the product.
Fig. 2.7  ABC Analysis Procedure
3. More courage for innovation

It is always possible to improve productivity by a few percentage points or to
reduce costs by a few percent—but the danger is that you only focus on that
and lose sight of what it is really about and what the margin stars do: more
courage for innovation. Just look around—there are dozens of examples of
how to conquer the market bravely with the invention of new products accord-
ing to the principle The winner takes all. Just think, for example, of the first
iPad—the reward for Apple: ten billion dollars in new revenue in the first ten
months of 2010 with a completely new product category.
Of course you will be copied sooner or later (even Apple can’t escape this),
but until that happens, you tap into bubbling new sources of revenue and
achieve fantastic profit margins. However, this only works with a real culture
of innovation, from which great new products developed with passion emerge
n. This starts with your employees: “Not every employee is creative or able to
think innovatively! Some simply don’t care what we do,” the CEO of a large
company told me recently. Have you ever thought that or even said it yourself?
In my opinion, using the creative and innovative potential of a company is like

an iceberg. 80 to 85% of this potential slumbers in the depths and remains
undiscovered. Why is that? And why do we only use the few hundred years of
experience that make up the board, the top management and some above-aver-
age employees and completely ignore the many thousands of years of experi-
ence of the remaining workforce? By denying any innovation capability to a
large part of our workforce, we practically disenfranchise them!
Of course we are all creative. You and I and the people around us have a
hobby, a passion that we pursue. Jogging, skiing, the local darts club, volun-
tary work as a football coach—whatever it may be. We engage in these things
with above-average commitment, we invest a lot of time, partly associated
with strenuous physical and monetary effort and still feel great pleasure in it.
Why do we do that? Because we know exactly what we are doing and because
we appreciate the common activity with people who are interested in and striv-
ing for the same goal as we are. Self-initiative, creativity and passion are some
of the most important characteristics from which innovations arise. We cannot
prescribe them, but as corporate leaders we can only create a framework in
which it pays to be innovative. This framework consists of a clear corporate
purpose, new German “purpose”, which was ridiculed for decades, as well as
framework conditions under which the employees seek to fulfill the corporate
purpose with maximum zeal.
An accounting clerk, a call center employee or a forklift driver who has been
working in the company for 20, 30 or even more years can develop a much
more radical—but at the same time quite feasible—idea than the new “Head
of Innovation” or a whole army of consultants who have only been working
in the company for a short time. The best, indeed the decisive ideas arise from
the fact that we observe a development over a certain period of time, derive
a new trend from these observations, underpin it with experience, critically
question it and quickly reject or implement it quickly. From a raw diamond, a
brilliant stone can be cut in a very short time.
The Return of Innovation

Here are three suggestions on how you can achieve a higher Return of Innovation
from your workforce starting now:
1. Your “higher goal” and the definition of innovation

Make a test: Ask ten employees of your company (regardless of their posi-
tions) what the purpose of your company is and how innovation is defined
there. How many different answers do you get? Most likely, you will first have
to define your company’s purpose and what innovation means to you and how
to recognize it!
2. Tear down the bureaucracy
If I want to pursue my hobby in society, I simply call the nearest relevant club,
do a trial training or some kind of presentation, and in most cases I can start
very quickly. How easy is it to get clearance for an initial budget in the form
of time and/or money to experiment with an idea? Is there the possibility of a
guided creative exchange on a cross-functional departmental level, where the
same rules apply to everyone and ideas are actually implemented?
3. Measuring innovation performance
How do you currently measure the innovation performance of your depart-
ments or business units? What proportion of innovation performance is there
in terms of compensation? If you have to fit both points, it is high time to
define and implement the corresponding parameters.
In the end, you have certainly already heard of various employee satisfaction
surveys and the shocking numbers that are always mentioned in connection with
them: namely that up to 80% of the workforce can identify little or not at all with
their employer. This leads to an undesirable exodus of certain employees—not
infrequently the best ones—and the costly struggle in the war for talent. Let’s be
honest: We as corporate leaders and managers are by no means entirely innocent
of this unpleasant development. The good news is, however, that you have it in
your own hands to change this.
2.2.3 Category 3: Rising Stars—Start-Ups
Let us now turn to the most important digital business models. Above all, digi-
tal platforms have been created in recent years that are to become the center for
freight handling in the world. Prominent names are Sennder, InstaFreight and
Flexport.
The aim of these platforms is to bring the customer and the ideal freight for-
warder together at the most cost-effective price with the help of innovative
technology. For this to succeed, a powerful platform is needed with as many cus-
tomers and potential freight forwarders as possible.
The key question in this context is why this idea did not come from an estab-
lished forwarder, but from people who were partly completely unfamiliar with
the subject and threw themselves into this business area because they smelled a
giant, several hundred billion euro market. The founding teams of both Sennder,
2.3 How to Adapt a Business Model 45
the first logistic unicorn in Germany (a unicorn is a young company that is valued
at more than one billion euros), and InstaFreight had no previous contact with
forwarders or logistics in general!
We can see: Many logistics companies are too busy with themselves and do not
dare to look beyond their own noses or see their company as a potential part of a
network in order to exploit new potentials through the synergy effects achieved.
But there are also laudable exceptions: Fiege, a more than 100-year-old
German logistics group with annual sales of more than two billion euros, has
entered into a cooperation and even an investment with the aforementioned uni-
corn Sennder and is willing to give insights into its sensitive customer network
(FIEGE Logistik Stiftung & Co. KG 2021). As the designated CEO Felix Fiege
announced at a logistics congress in 2021, this was done quite deliberately in
order to continue to exist on the market in the future. Such a step requires humil-
ity and courage at the same time!
2.3 How to Adapt a Business Model
“The purpose of a business is to create a customer.” This quote is from none other
than Peter Drucker and hits the nail on the head when it comes to a business
model.
Crises like the global Coronavirus pandemic require companies to adapt their
business model because many conditions have changed that these business mod-
els have been based on until now. For example, before the pandemic, Lufthansa
used data collected in the past to calculate future passenger traffic in private and
business traffic and then aligned the fleet planning, flight plans, personnel plan-
ning, etc. In addition, certain offers were tailored to individual customer groups,
whether private or business. The most prominent example of the changes already
mentioned is the at least medium-term decline in the number of passengers on
business flights, which is due to the fact that personal meetings and international
meetings have been increasingly replaced by Zoom and Co. Experts therefore
expect a permanent decline in the global business passenger volume of 20 to
30% after the end of the pandemic (Sankary 2021). This corresponds to a revenue
decline of billions of euros per year for airlines. Therefore, Lufthansa also has to
adapt its business model if it wants to continue to grow and become increasingly
profitable.
Furthermore, each individual company is subject to a continuous review of its
business model, involving a possible adjustment, if it wants to stay competitive in
the long run. I have warned emphatically against commoditization in the logistics
business earlier and have cited a continuous, seriously anchored culture of inno-
vation as the only effective remedy.
In order for an innovative product or service, resulting from such a culture
of innovation, not to lead a niche existence, it is absolutely essential to embed it
in an excellent business model. As Drucker says: You have to create a customer;
otherwise, no matter how good the product may be, it is not an innovation, but
merely an invention.
2.4 How to Check Your Business Model for its

Competitiveness
When checking your business model, focus first on the promise of performance
you make to your customers. Let’s assume you are an employee of a large inter-
national shipping company. Up to now, your promise to your customers has been
to reliably and punctually deliver the goods they ship, regardless of how large
they may be and where they are to be delivered. However, due to the declining
service in terms of punctuality of the shipping companies in the last two years,
the fulfillment of this promise of performance is seriously at risk.
Of course, you can ignore this because you can’t control the ships and it’s
obviously not your responsibility whether they arrive at their destination on time
and keep to their departure times. However, always bear in mind that your cus-
tomers will associate the bad service with you or your company (as their contrac-
tual service provider) and not with your supplier! Against this background and in
order to answer the question of how you can fulfil your promise of performance
again, it is worth taking a close look at your business model.
It would be conceivable that you deliver a container tracker to your custom-
ers, possibly for a small fee. In this way, you can at least promise them that at any
time of day or night it can be exactly determined where a certain consignment
of your customer is located, and possible delays can be recognised earlier and
appropriate measures can be taken.
We live in a world today where it is about getting relevant information as early
as possible. Despite or perhaps because of our extremely interconnected world,
this is still a challenge with many different parties. If your service has deterio-
rated as described above, you might also consider offering your customers the
tracker free of charge in order to fulfil your promise of performance.
You are now asking yourself the following questions:
2.4 How to Check Your Business Model for its Competitiveness 47
1. What “unfair advantage” does your company have?

2. What can you do much better than any of your competitors?
3. Why have your ten largest customers trusted your company for years and con-
tinued to do business with it?
4. What percentage of your customers “buy” the complete range of services from
you, and how many can you still increase in terms of up- or cross-selling?
The first question may make a sea freight logistics service provider shrug and
think resentfully of the shipping companies that—at least at the moment—have a
gigantic unfair advantage. In an oligopoly market, the parties are subject to com-
pletely different rules (or rather: their absence), but it is still worth taking a closer
look at the question of the “unfair advantage”. It may be that your company has
had very strong customer relationships for decades, that it has a particularly large
market share in a travel area or simply has the best customer satisfaction values in
your industry (and you may not even know it!).
To answer the second question, a small study will help you that you can do
with your employees and customers. Yes, I even go so far as to say that as a
leader—regardless of your daily business—you should talk to at least two cus-
tomers for 15 to 20 minutes every day, no matter what department you work in.
This helps you not to fall into the trap and not to deal too much with yourself or
with internal things. You think you don’t have time for that? That’s nothing but
a lazy excuse! Time is not a resource (because then it would be unequal and not
absolutely equal to 24 hours a day), but a question of priorities that you define for
yourself.
But back to our little study: Ask this question to ten employees, especially
those who have only recently switched to you or have already been through sev-
eral stations. And finally, also ask ten of your customers. You will be surprised at
the insights you gain from the answers.
This also applies to the third question (Why have your ten largest customers
trusedt your company for years and continued to do business with it?). We Ger-
mans are particularly good at thinking too long and too comprehensively about
what went wrong and looking for a culprit (usually only the others are consid-
ered for this!). Certain post-mortems, for example after the loss of key customers,
certainly have a certain value in helping to understand how such an event can be
avoided in the future. However, it is—contrary to the widely held belief that you
learn above all from failures—much more important to ask yourself why certain
things have worked excellently, for example large customer contracts. So: Just
turn the tables and focus on so-called post-celebrations: In this case, take your top
ten customers. What is the real reason that they have been loyal to your company
for so long? Only a person who trusts you and is the purchasing decision-maker
can give you the answer to this question.
The fourth question (What percentage of your customers “buy” your com-
plete range of services, and how many can you still increase in terms of up- or
cross-selling?), which, I must admit, actually consists of two questions, is the
acid test for your sales: No matter how good or how high the value of the first
deal of Sales with this customer was, there is always—and I emphasize the word
“always” here—the possibility of an up- or cross-selling! To briefly define the
two terms:
• Upselling means selling existing products that a customer has not yet pur-
chased. Ideally, we cover the customer’s needs based on our entire range of
services and products that we have to offer. This process can take years.
• In Cross-Selling we take one step further. It means that two different, sepa-
rately run sales units of the same company sell completely new products to
a certain customer through joint sales activities (e.g. through joint visits and
a joint offer creation), which the sales representative responsible for this cus-
tomer could not have sold alone due to the lack of the corresponding compe-
tence. Cross-Selling is the Champions League for cross-functional sales units,
but most organizations (regardless of their size) fail miserably at it (more on
this in Chap. 5), where we deal with the topic in detail.
Remember the three types of needs? Now that you know that need levels 2 and
3 (anticipated and created) are subject to change by definition, this means, in
reverse, almost unlimited upselling opportunities for your Sales. Let’s say you
have four or five main products. The probability is high that 80 to 90% of your
customers will only buy one or at most two of these products from you. How-
ever, it is often the case that manufacturing companies are subject to fluctuating
volumes but also have a need for IT solutions (especially nowadays!). And even
if they don’t have that need, there is always the possibility that an excellent sales-
person will convince the customer to outsource certain in-house activities on a
cost-benefit basis. So you see:
 The job of a salesperson is never completely done. That is both a

curse and a blessing and offers the opportunity to uncover hidden
growth potential.
2.4 How to Check Your Business Model for its Competitiveness 49
If you have now identified the customers with whom you almost cover your entire
product portfolio, select three of them and examine why you were successful. Try
to find a pattern using the following guiding questions:
1. Did this customer come to you with his large freight portfolio through an offi-
cial RFP (Request for Proposal) or through skilled key account management,
avoiding the cumbersome RFP-process?
2. How large is this customer, and to which classification does he correspond?
3. On which decision-making level do you maintain contact with this customer?
4. How long has this customer been with you, and at what interval were you able
to successfully sell new products?
If you have answered these questions, take a look at your 100 most revenue-gen-
erating customers and create a shortlist in which you list the customers who have
a) Upselling potential (also for the sale of new product) and

b) which you have active contact with at decision-maker level.
It is quite possible that you can only answer point a) or point b) with certainty. In
this case it is worth discussing the missing answer with the customer. Of course,
you enter this new information into your CRM (customer data system) yourself.
The most important task for your sales department is now to ensure sales
growth in the still “open” product areas. If this succeeds, the advantage is clear:
With each additional product, it becomes more difficult for the customer to break
away from your company. Just think about how many different Apple products
you own and how incredibly high your threshold would be to replace all of them
with a competitive product overnight!
Even if a customer switches to a competitor for a product over time, you still
realize a considerable sales volume with him. In the end, you are also better pre-
pared for fluctuations in a business area, for example if the spare parts business
and thus the airfreight volume decreases.
With this method, answering the three questions should no longer take more
than one to two weeks. If you need more time, you are too perfectionist! The fol-
lowing applies:
 Progress beats perfection!
Carry out this task yourself or at least have it carried out under your personal
supervision. By the way, answering the first question is much easier if you have
already answered questions 2 and 3.
Now there is one last point tat needs to be taken care of, as it is absolutely
essential for checking and adjusting your business model: your Revenue Streams
or in other words: how you currently make money! With the help of the MECE
model (Mutually exclusive, collectively exhaustive) (PrepLounge GmbH 2022);
in other words: (For itself exclusive, in the collective exhaustive) you work out
clear areas that are mutually exclusive for themselves, but in their totality their
complete Revenue Stream map. That’s how the theory goes How effective and at
the same time simple this method is, the following example shows: Imagine you
are responsible for planning a wedding. First, it is necessary to consider which
core elements a wedding consists of. The following elements are provided for this
purpose (see Fig. 2.8):
• Food
• Guests
• Music
• Location
• Evening Program
MECE
Food Location
Evening
Guests Program
Music
Fig. 2.8  MECE Case Study Wedding

2.5 Defense of the Business Model against Related Industries 51
2.5 Defense of the Business Model against Related

Industries
Warren Buffett once said: “Forget trying to beat your opponent on their turf with
their weapons. You will lose big time. Instead, become number one on your turf,
where your rules apply.”(Weiss 2009)
In the last two years, the behavior of many shipping companies has been criti-
cized by various logistics associations as unfair, selfish, uncooperative and partly
unethical. (Schlautmann 2021) But if you put yourself in the position of the head
of a container shipping company for a minute, you will see that their behavior is
quite understandable. Try it out for yourself: How would you behave in the fol-
lowing scenario?
Example
Imagine that you only have four major competitors worldwide and have a
market share in the double-digit percentage range. Furthermore, you make
such high profits that you no longer know where to put all the money. At the
same time, however, you still have very good memories of the high losses you
incurred seven years ago. You also know that part of your customers—let’s say
in Revenue Stream 1—directly book containers with you and the other part—
Revenue Stream 2—does this indirectly via forwarders with you. Since you
are in tough competition with your oligopoly rivals and are constantly sub-
jected to exorbitantly high capital costs, you set out in search of additional
sources of income. So what would you do?
You will try to transfer part of the business you do with Revenue Stream 2
to Revenue Stream 1, that is, from indirect to direct business. ◄
This example shows that there is not the slightest chance for a capital-weak
logistics company to beat the shipping companies on their own turf, because you
absolutely need a shipping company (and there are only about ten of them in the
world), but the shipping company does not necessarily need your logistics com-
pany (because there are about 10,000 companies like yours)! If so, you would
have to buy a large shipping company that costs several billion dollars and has
extremely high maintenance costs. It is better to think about how you can set
yourself apart from your competitors and define your own rules to become num-
ber one in your field!
Spread the risk over more shoulders: A conceivable scenario is to form a pur-
chasing cooperative with other forwarders to significantly increase your market
power vis-à-vis the shipping companies. Or you aim for a minority stake in well-
known shipping companies, as Kühne + Nagel has been doing for decades with
Hapag-Lloyd. Meanwhile, Kühne + Nagel holds more than 30% (!) of the shares
of Hapag-Lloyd (Schrüfer, 31.02.2020). Another advantage: The extremely high
profits of the shipping company in which you are involved flow back to your
company to some extent!
The two scenarios described are more medium- to long-term ways, but finally
there is a shorter-term variant: It would be conceivable—to stay with the exam-
ple of sea freight—that you provide your own container tracker and thus check
the performance of the shipping companies. You now take one step further and
collect the performance data that arises and then tell your customer that you can
offer him different services depending on the priority of the load, which have a
reliability of over x percent.
 Conclusion You have now combined the best of both worlds: on the
one hand, a significant say in the orientation of shipping companies,
combined with the corresponding contacts, and on the other hand,
you remain independent in the market.
The last point I would like to mention is of such importance that it must not be
lost sight of: Because you and, above all, your sales department have done their
homework and are doing everything they can to sell as many relevant products
as possible, you remain permanently on the radar of your customer and develop
such a deep relationship or such a large trust relationship with him (which can-
not be replaced by any rate), that you are always one step ahead of the competi-
tion. But this only succeeds if you really implement the points described above.
2.6 Derivatives from the Business Model Adaptation

for Sales
You will probably wonder how you can translate the above into everyday sales
and how you can always strive for a maximization of your portfolio with your
customers in the best possible way? Three aspects are decisive in answering this
question:
2.6 Derivatives from the Business Model Adaptation for Sales 53
1. Which salesperson is qualified for this, and is this a Farmer or rather a

Hunter?
2. Which incentive system does the up- and cross-selling follow?
3. How easy is it for your customers to work with another department than
before?
The first point requires a clear selection to identify the people who really have
the confidence to develop a customer beyond the initial stage – and by that I
mean the first deal (no matter how big it was). At this point, I’d like to debunk
a myth: A Farmer is by no means a person who is completely averse to Hunt-
ing. She just has to want it more subtly and have exceptionally high standards for
herself. Further, it is a person who moves confidently dialectically on very many
different levels, has at least seven years of demonstrable sales experience, has an
understanding of values that is characterized by humility and ambition in equal
measure, and whose greatest aspiration is to engage as thoroughly as possible
with the customers assigned to him or her. I admit that it is rare to find a person
who combines all these characteristics, but the sooner you find them and the more
exclusive access you give them to a relevant position in your company, the more
successful you will be. However, always keep in mind that the best only come
and above all stay with you if they encounter a real world-class environment. It is
similar to a world-class soccer striker who only changes to a new club if the cor-
responding conditions are met.
It is absolutely possible that only 5 to 10% of your current sales force is actu-
ally qualified for their job. Approximately 20 to 30% of the people you have qui-
etly settled with may be able to stay in the sales team if they are individually
addressed (for example, through training, etc.). But it may also be that no one in
your sales team meets the above requirements, so you are forced to recruit and/
or poach appropriate forces elsewhere. How this works, you will learn in Chap. 4.
On point 2, the incentive system: Without going into too much detail about
the exact type of incentive system, it should be said that every product for which
a salesperson additionally closes a deal must be incentivized with a value greater
than the previous one. The incentive system must therefore not be linear, but
dynamic, preferably exponential.
Imagine you are giving out prize money for winning the Basketball league on
either local, state or national level. You will not simply multiply the amount of
money you pay to the localchampion with the amount offered for the next higher
league, but make clear jumps upwards. This is also the case with a sophisticated
incentive system. For example, with a cross-selling incentive, you must first of all
define cross-selling as a term that is easy to understand for everyone, and it must
be financially much more worthwhile to engage in cross-selling than just pushing
the existing portfolio. But we will get to that in detail in Chap. 5.
Point 3 is deliberately designed from the customer’s perspective: it must
become easier for the customer the more and the longer he is bound to you. And
he should receive more benefits and goodies, that is, things that cost him little but
bring him a lot of value. Too often it becomes almost impossible for him when he
relies on one service provider for several products: more contact persons, differ-
ent systems, etc. For this reason, some companies have invented what is known
as a “control tower”. This is a highly expanded customer service function that
is designed to make this complexity more manageable with a mix of customer
employees and software. This “tower” is also invoiced to the customer (actually
this service should be free of charge!).
Here are some practical recommendations:
• You could offer a rebate to a customer in addition to the already proven key
account management system if he reaches a minimum turnover in the further
product portfolio level. Airlines and hotels have been doing this for decades.
• Or you could grant the customer in question access to exclusive events where
he meets potential customers (for example, when they hold Supplier Days in
the automotive sector: they invite original equipment manufacturers or manu-
facturers of original equipment, but also their suppliers). In a good framework,
you contribute to the fact that business is initiated. Is there anything better that
customers could wish for from their service providers?
2.7 Interview on the Topic of Record High Freight

Rates
Here is the complete interview on the topic of freight rates, production sites and
supply chains from December 5, 2021 (Dittmer and Nowroth 2021, with kind
permission from © ntv Nachrichtenfernsehen GmbH):
ntv.de: Just before Christmas, reports are again increasing from retail that some
shelves will remain empty due to delivery problems. The supply of goods from the
Far East is still lagging behind in the second year of the pandemic. The “perfect
storm” in world trade, as some call it, just won’t let up. What’s the reason for this?
Alexander Nowroth: In a perfect storm, there are always several forces at work
that interact. It’s not just one thing that goes wrong, but several. I help customers
with various strategic issues and see what’s happening right now. Freight rates have
2.7 Interview on the Topic of Record High Freight Rates 55
reached astronomical heights. Currently, prices are at $16,000 per 40 ft container.
The same container cost around $2000 less than 18 months ago. These are prices
that shipping companies never dared to dream of. That’s good for this industry. But
as a businessman and importer, you have to be able to afford it first.
ntv.de: Is an end in sight? Will prices drop again when the pandemic is under
control?
Alexander Nowroth: Next year, container rates will definitely remain at a very
high level. Three reasons speak in favor of this: firstly, there are still massive bot-
tlenecks due to the Suez Canal blockade of the Ever Given and corona-related port
closures in China. Secondly, the demand for transport is still high due to the global
restrictions on consumers. The third reason why freight rates will remain high is that
the shipping companies have turned their pricing model from the pre-corona era
upside down. For fear of collapsing prices that they have to expect in the foreseeable
future—namely when the corona crisis is over—they lure customers into relatively
cheap, long-term contracts. They bind customers for the coming years and thus to a
certain extent also determine the prices in the future.
ntv.de: Can you explain that with an example?
Alexander Nowroth: Let’s say you want to ship 3000 standard 20 ft containers
per year from China to Germany. If you sign a contract for one year, it will cost
you 14,000 or 15,000 dollars. The two- or three-year rate is much cheaper at 6000
or 7000 dollars. Because the prices are still three to four times higher than before
Corona, it is still a very good business for the shipping companies. They thus pre-
vent a rapid price decline. It is interesting that the tariff model was reversed up until
18 months ago. This shows what they are trying to achieve.
ntv.de: So the shipping companies are making provision for the time after
Corona, they are preventing prices from falling too quickly?
Alexander Nowroth: That’s right. Prices must collapse sooner or later at this high
level. The background is twofold: On the one hand, stricter environmental standards
of the International Maritime Organization IMO will apply from 2023. On the other
hand, with the launch of many new ships, around four million TEU, that is 20 ft
standard containers, will be added to the market. This corresponds to about 20% of
the global fleet currently in operation. Even if a few ships are retired, the supply of
free space on container ships is likely to be greater than demand worldwide. At the
same time, however, demand will shrink. This is because the majority of the popula-
tion will be vaccinated at some point. When people move and travel more, they will
also demand fewer material things. And thus also buy fewer things from China. This
is the moment when freight rates are likely to fall very quickly.
ntv.de: What conclusions do importers draw from this?
Alexander Nowroth: There are more and more companies that now say that it is
simply too expensive to produce goods in China and ship them to Europe because
the container price exceeds the value of the goods. And we’re talking about 70 to
80 m3 that fit into a container. Macroeconomically, a point has been reached where
entire industries are considering whether it still makes sense to ship across the
globe—also from an ecological point of view. A business model that is based on the
fact that I can produce cheaply somewhere also includes the fact that I can map the
transport costs. An importer like MediaMarkt (Electrical Department Store), who
has 500,000 euros or more in value in a container, is not interested in that. For him,
it makes a few euro cents on an expensive product level. But someone who imports
safety equipment or gloves, for example, suddenly has a purchase price per glove of,
for example, 35 cents, which quickly corresponds to double-digit percentage points
of the value of the goods. This is reflected in the balance sheet.
ntv.de: That sounds as if it could have consequences for the production location
China.
Alexander Nowroth: There are two trends: Either the companies say they are
going to India or Bangladesh. It is more expensive there today, but not as extreme as
importing from China. Or they say they are bringing production back to Europe and
looking to see if they can reduce inventory through shorter lead times. Then they
don’t have to wait months for products and in the end they may even save money.
Companies have to recalculate that now, that’s what they’re doing.
ntv.de: Do you already have customers who are looking for new production
facilities outside of China?
Alexander Nowroth: One customer, with sales of 300 to 400 million euros, is
currently considering reducing some of its 3000 containers by producing in Spain or
Portugal. The goods could then be transported by truck or small ship to England or
Ireland. In industries with low product value—say, tile or fabric importers—it can
happen very quickly that the business is no longer profitable due to high transport
costs. By bringing production closer to the company headquarters, companies can
also improve their CO2 balance sheet, as maritime transport is also included. That’s
another advantage for them.
ntv.de: Will our supply chains ever be the same again, or will Corona be a
gamechanger for the industry?
Alexander Nowroth: Supply chains will change sustainably. However, this
applies to some industries more than others. For companies with low product value,
which partly produce in China for decades, this will apply in particular. This is also
due to the fact that they not only suffer from the high container prices, but also from
the three to four times higher raw material prices. Right now, quite a lot is being
turned upside down. This can also lead to us increasing domestic production again.
ntv.de: Does this mean that shipping companies may be abolishing themselves
with their pricing policy?
Alexander Nowroth: I would not go that far, but the constant high prices can
backfire on them. This need not be the case, but it can happen. But also to break a
lance for them: Keeping a shipping company running is even more expensive than
operating an airline. Shipping companies have bled for years. They have incurred
billions in losses because they have been driven at prices far below what they should
have charged. From their point of view, it is the hour of opportunity. Rolf Habben
Jansen, the CEO of Hapag Lloyd, however, is one of those who clearly warn that the
price level is not good because they make themselves unattractive to customers. In
the end, we will have to wait and see what the consequences will be.
ntv.de: Make a guess as to how much the level of ocean freight rates will drop?
Alexander Nowroth: That’s hard to say because they’re determined by sev-
eral factors. But if you look at the historical fluctuations and the special effects of
Corona, I think the container freight market will drop by at least half in the medium
References 57
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will not fall below the pre-Corona level in the long term, but will be above it.
ntv.de: Won’t production sites in the Far East become interesting again for com-
panies and importers with much lower freight rates, and everything would be back
to normal?
Alexander Nowroth: This may sound plausible at first. However, another very
important point plays a role here: the growing awareness of the economy of the CO2
problem. If a producer brings back part of the production to Europe, he not only has
much more control over delivery times and costs, but he can also save a lot more
CO2 thanks to modern production facilities. In Asia, not only the transport to Europe
causes higher CO2 emissions, but often also the lower environmental and production
standards. A “greener” awareness not only comes from consumers, but also from
companies. Produce as cheaply as possible, no matter where and then import it, this
will soon be outdated. We call this approach “consciousness economy”.
Diana Dittmer spoke to Alexander Nowroth.
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Sales Management: A Guide to Creating
a Long-term Performance Culture 3
 In this chapter you will learn why 98% of all sales organizations are too
large (so most likely also yours) and how you can master the transition
to a leaner, much more efficient organization, for example by reducing
overhead costs by 30 to 40% while at the same time increasing sales
performance. Furthermore, we will deal with innovative leadership
styles: away from an autocratic and towards a meritocratic leadership
style that not only binds the best talents to your company and ensures
long-term high performance, but also corresponds to the zeitgeist. In
addition, you will learn how to reduce administrative and bureaucratic
processes in your organization to give your organization much more
time for revenue-generating tasks. And last but not least, we will focus
on the right incentives to ensure the long-term good performance of
your team.
Employees usually leave because of their manager and not because of the com-
pany they work for, because managers have by far the biggest influence on the
performance of their sales employees. Most sales managers immediately see the
light. But nevertheless they underestimate the negative effect they can have on
their teams and overestimate the positive. But we all know the saying that a good
reputation built up over years can be destroyed in a few minutes. When asked
what the most important task of a manager is, the answer is often that it is about
motivating the employee to peak performance. That is a fatal mistake!
As the German best-selling author Reinhard K. Sprenger already pointed
out in his classic “Myth of Motivation. Ways out of a cul-de-sac” 30 years ago,
employees are already motivated (Sprenger 2014). Of course, some more, and

https://doi.org/10.1007/978-3-658-39756-2_3
62 3 Sales Management: A Guide to Creating a Long-term Performance …
others less so. The logical consequence of this is that we can only exert a small
influence on the increase in motivation, for example through extrinsic incentives.
It is also very important to find out whether the motivation already available
fits well with the values of your company and the respective job requirements.
In practice, it is usually the case that too much value is placed on experience and
competence instead of dealing intensively with the value code of the employees.
If an employee’s performance decreases, the manager responsible for her instinc-
tively tries to increase the performance through more drive attempts or other—
supposedly positive—incentives. We all know the motivational speeches that may
have a certain effect for a few minutes or at best for a few days, but then quickly
fizzle out.
 The fact is that every employee decides every day for herself how
much performance she wants to achieve in her job.
How can you positively influence the performance of your employees in a sus-
tainable way? Start by finding out what de-motivates your employees. Yes, you
read that right! The question of what makes someone happy is much more dif-
ficult and above all less concrete (and therefore hardly categorizable) to answer
than the question of what makes someone unhappy. If we avoid the things that
make us unhappy (for example, an unhealthy or risky lifestyle), we are on a very
good way to a happy and fulfilling (working) life.
In companies, people are demotivated by either process-related or relation-
ship-type issues (Sprenger 2014). This can be due to rigid administrative require-
ments, such as the level of detail of the visit reports or pipelines, but it can also be
that the reporting lines or the immediate line manager are too controlling and this
behavior is perceived by the employees as “micromanaging”.
Your employees cannot always choose the process requirements or their boss.
Therefore, it is advisable that you see yourself as an “enabler” and make it your
(managerial) task to create an environment and working atmosphere in which
every employee can develop and participate as much as possible. Since processes
have to be constantly adapted to changing conditions, you should definitely use
the input of your employees for these change processes.
I bet that each and every one of your employees who is passionately involved
in a hobby does this in a club or group in which he feels completely mature and
able to influence the course of things. The overwhelming result: 100% passion
and an absolute will to perform. And all of this without any pay! On the contrary:
This employee will often even pay membership fees to pursue his passion in a
club, or invest significant amounts to make his dreams come true (e.g. mountain
3 Sales Management: A Guide to Creating a Long-term Performance … 63
climbing, participating in triathlons, etc.). Just imagine for a moment that this
100% passion and this absolute will to perform were present in every one of your
employees in your organization on a daily basis. That’s hard for you to imagine?
You even think it’s impossible? Are these the thoughts that are just coming to
your mind now? In the following, I will show you how you can achieve exactly
that in your company.
3.1 From an Autocratic to a Meritocratic Leadership

Style
The first step on the way to a high-performance culture in your sales organization
is to realize that your own leadership style has a huge impact on the performance
of the entire team and is reflected directly in the results achieved by the subordi-
nate team. If you have made this clear to yourself, you are preparing for a para-
digm shift:
 The lone captain on the bridge is obsolete!
You as a sales manager are not the only person who can think strategically or have
the idea of a strategic realignment. This is independent of how much experience
you have. The reason for this is mainly the exponential acceleration (which was
described in detail in Chap. 1), with which we are currently confronted. It makes
it impossible for all of us and thus also for you to really observe all the decisive
developments. Also, individuals no longer have sovereignty over certain informa-
tion, as the Internet makes almost the entire knowledge of mankind—which was
previously accessible to only a small part of mankind (e.g. the clergy or schol-
ars)—now practically available to all people. Wikipedia & Co. Thank you! This
means that it would be a big mistake to withhold certain information from certain
“subordinates”. There are still an incredible number of companies that withhold
purchase prices and certain economic key figures from their salespeople. If you
behave like this, you should quickly deal with the following questions:
• How can you seriously hold your team accountable for developing the key
performance indicators that are important to you if they does not have all the
relevant details?
• And how can you expect your team to trust you fully if you don’t extend that
courtesy to your team?
The withholding of sensitive information is often justified by the fact that

employees who are dismissed or leave the company of their own accord take
valuable knowledge with them and make it available to the competition. On the
one hand, this attitude amounts to a permanent declaration of mistrust towards the
employees, on the other hand it does not prevent anyone from actually passing on
such information.
 With this attitude, 98% of honest employees are placed under a gen-
eral suspicion that is usually unjustified and almost deprived of their
right to vote in order to unmask the remaining 2% who are to be
counted among the black sheep.
You can never completely avoid the black sheep, especially if your company has
reached a certain size.
We therefore deliberately—sometimes of course also unconsciously—attribute
the ability of strategic thinking to our employees, and quite groundlessly. How
can a field sales representative provide strategically relevant input to the strategy
if she is in such a situation?
If you are honest and look at things as they really are objectively, you will
have to admit that the salesperson is usually much closer to the customer than
you, based in sales management and only coming into contact with a fraction of
the “time with the customer” that the salesperson spends with them. He will sim-
ply be able to tell you better what is hindering his work, how certain optimiza-
tions should be designed and—above all—how customer needs are changing. So
you are very well advised to include your best and most active salespeople in the
strategy development!
In other words: say goodbye to the image of the lone captain on the bridge
who is the only one who sees what is awaiting him and his crew on the horizon!
It is not for nothing that radar systems and other technical aids were introduced
in shipping almost half a century ago. A leader who always promotes the best
idea—completely independently of who came up with it—who values every sin-
gle employee as an individual, creative being and takes their interests more seri-
ously than his own, is a true meritocratic leader!
3.1.1 The Unfair Balance of Power and Force
To understand why employees can’t always tap into or call upon their full poten-
tial, you have to take a closer look at the power structure that has prevailed in
3.1 From an Autocratic to a Meritocratic Leadership Style 65
companies for almost 100 years, and especially in corporations. The first impor-
tant component that immediately jumps out at you is the completely dispropor-
tionate distribution of power: the top one percent of all corporate employees have
much more power than the remaining 99%. That this is also true of the distribu-
tion of wages, although to a lesser extent, goes without saying. Whether this is
justified or even fair is a matter of debate.
Let’s stay with the crucial point of the disproportionate distribution of power:
Practically, this means for you as a leader that you can reprimand or even dis-
miss an employee much more easily than the reverse can happen to you. Now you
might think that this unequal distribution of power is simply part of the leadership
job or that it has always been that way. But now is the time to put this dogma to
a closer test, because this is precisely the cause of the no better than average per-
formance of your employees, who would like to “serve the system”. What if the
team had just as much power as its manager? Would this reduce the number of
people who see their own interests first and foremost and who want to satisfy their
hunger for power, because they would have to align themselves with the values of
the company and the team out of sheer survival instinct? And—this question must
also be asked—why are there many more bad managers than really good ones?
Do a little self-test: How many of the managers you’ve worked for so far
would you call a true role model? I bet it’s no more than two to four, so only
a vanishingly small minority compared to the total number you’ve had in your
entire career. Unfortunately, one of the reasons for this is that a significant num-
ber of managers have risen to the positions they occupy due to their good rela-
tionships and not due to their performance. This is confirmed by several surveys
and studies (Hamel and Zanini 2020).
In contrast, imagine that a sales team had to confirm its boss in office every
year or every two years. Or that the team’s feedback had a direct impact on the
boss’s pay. There are actually companies like Gore & Associates where this is the
case and where team leaders are elected every year (Tambe 2013). And believe it
or not, this has been working extremely well for decades in this chemical com-
pany that employs 12,000 people.
If this procedure seems too radical to you, you should at least consider giv-
ing the various teams the opportunity to admonish their respective boss, so that
you can take timely countermeasures in the event of a issue and above all avoid
that top talents leaving. We all know that the reason for dismissal is usually to be
found in the person of the boss. Hardly anyone hands in their notice because the
company itself is bad.
You can see that it is admittedly uncomfortable to deal with real changes, but
that it is all the more worthwhile if you actually do it. What do you think happens
to intrinsic motivation and willingness to perform when your employees get the
feeling that they are now firstly equally influential and also responsible as the
boss and secondly can really influence or change things?
3.1.2 Characteristics of a Meritocratic Leadership Style
The main features of a meritocratic leadership style arise from the conscious
attitude to serve the entrusted personnel primarily and to put one’s own interests
aside so that the interests of the team and the company are always safeguarded.
Of course, one’s own interests can coincide with those of the company, and that
would be desirable.
A meritocratic leader
• is characterized by the fact that she listens more than she talks herself,
• puts her ego in the background, takes a participatory attitude in meetings and
tries to lead the discussion towards a consensus that can also be different from
her own attitude,
• always works to remove obstacles and everything that negatively affects the
motivation of the team,
• asks her team for advice from time to time.
Do you recognize yourself? To be honest, it is very rare to find someone who

really lives all the characteristics mentioned above every day, and it is admittedly
not easy to implement them in our increasingly faster world every day. If you suc-
ceed however, you will observe a great return on investment of the employees in
the form of loyalty and increased motivation.
Let’s continue to think about the meritocratic style. For this, I now want to
show you an alternative way to the prevailing feedback process, which (with few
exceptions) has remained unchanged in our companies for about 100 years. The
answer to the following question is decisive here: Who spends the most time with
the employee, the boss or his colleagues?
Feedback processes and employee evaluations have not changed, or only
insignificantly, for decades. Sandwich feedback style, 180, 270 or 360 degrees
(mostly this is nothing more than lip service)—notwithstanding, the feedback
process usually takes place exclusively between the superior and the respective
employee. And—I am sure you will agree—it is the colleagues who spend signifi-
cantly more time with your employee than you do yourself. Wouldn’t it be foolish
to forego this valuable input in the assessment?
3.1 From an Autocratic to a Meritocratic Leadership Style 67
You can use the knowledge of your employees for the evaluation of the col-
league as follows: Every employee has the opportunity to evaluate three other
employees. This avoids that individual persons agree with each other beforehand
and ensures the greatest possible objectivity. Every employee gets a questionnaire
with
a. the values of the company,

b. the degree of collegiality and
c. the development potential
and now decides on a scale from 0 (very low) to 10 (very high) how pronounced
the respective colleague has aligned his actions with the values of the company,
for example in the past year.
Now, if you find that you have an employee on the team who scored very high
on the colleague feedback, but you have a bad impression of him (for example,
due to lack of performance), you can now conclude that the right attitude is there
with him, but for certain reasons his performance is not sufficient. You absolutely
have to follow up on the reasons for this, for example in a one-on-one conversa-
tion, in which the decisive question is: “What demotivates you?” You see, such an
assessment avoids your evaluating an employee too quickly and negatively based
on gut feeling or certain impressions.
Sometimes I am asked by customers whether an employee should be evaluated
according to how strongly he or she is engaged in my sales trainings, for example
through questions or comments. I immediately wave it off, because that would be
unprofessional and presumptuous, since I have experienced too often by now that
the “still waters” are by far the best salespeople. The reason why they participate
only little in these trainings is not that they have no interest in them, but that they are
modest and therefore do not want to play in the foreground. Or: They know that they
are very good and want to give their colleagues more room for questions and active
participation.
The most important thing in a feedback process is to approach it as impartially
as possible. There are always certain reasons why an employee behaves the way she
does. The same applies to people who either show a lot of performance or little per-
formance. To look only one-dimensionally at performance indicators is therefore too
short-sighted, especially if you want to bring the majority of your average perform-
ing team to a new level of performance. I guarantee you that by a combination of
• consistent cause research for the demotivation and the performance drop,
• tailored incentive program,
• consistent career development,

• individual training,
• innovative products,
• market-oriented prices and optimal customer benefit
a biotope will be created in which at least 50% of the previously only average
performing salespeople will reach an absolute top level.
I will now show you how to do this using the SEALS SALES methodol-
ogy that I have developed, which has proven itself dozens of times in projects.
It is important to keep in mind that this methodology never fits an organization
exactly, but always requires certain adjustments to the respective situation (for
example, based on a status quo analysis). However, the core idea is always the
same: the development of a long-term performance culture at lower costs and
associated with previously unprecedented sales increases.
3.2 The Basics of a Performance Culture
3.2.1 Smoothing Disproportionate Performance

Distribution
The distribution of performance is similar to the mountain world: the salespeople

whose performance reaches the highest heights are the eight-thousanders, who
are in the absolute minority compared to all other mountains or salespeople. Nev-
ertheless, they generate 80% (or even more) of the total sales volume. So you
have a certain number of employees on your team who cost you more than they
bring in. Thus, these low-performers make your sales less profitable than they
could actually be. The trick is now to bring the non-performing 80% to the same
level as the 20% top salespeople—the “SEALS”.
Reduce Overhead Costs While Increasing Sales and Gross Profit Through
the SEALS SALES Methodology
Imagine if you could save 30 to 40% of your sales overhead costs without affect-
ing your sales volume negatively —whether existing or new—, but rather on the
contrary: increasing it significantly. Too good to be true, you think? Extremely
difficult to implement? The answer is: No! Neither is true!
You’ve probably heard of the movie 300 or maybe even seen it. It’s about how a
300-strong, very brave Greek troop faces its Persian opponent, who leads an army
3.2 The Basics of a Performance Culture 69
with a numerically overwhelming force against them. And yet the Greeks win the
battle.
Sales organizations today face a similar task: to achieve the highest possible
customer sales with a powerful team and to beat the much larger competitor—
continuously and permanently. The success factors for this are
• sales management,
• an excellent and continuous training program,
• a suitably tailored incentive system and
• a high intrinsic motivation of all salespeople.
In most companies, however, at least three of these four factors are not or only
insufficiently taken into account or implemented. In addition, a fifth factor often
occurs, namely the team size, which is often wrongly dimensioned. In many com-
panies, the team is either too large or the number of salespeople who only achieve
average or even below-average results is three to four times as high as the number
of those who generate a real return on sales of double or triple their own costs
(cost to company).
The reason for this lies in the Pareto distribution. The Pareto principle, named
after Wilfredo Pareto, also known as the Pareto effect or 80-20 rule, states that
80% of results are achieved with 20% of the total effort (Studyflix GmbH 2022).
This can be applied directly to the sales department and, as we will see, can lead
to higher sales at lower costs.
3.2.2 The Right Sales Team Size
Applying the Pareto principle to team performance, it states that in nearly all
sales organizations come to a strong imbalance in the distribution of performance:
20% of sales staff generate 80% of sales or more. Sometimes the distribution is
also 30 to 70 or 10 to 90%—let’s assume for a moment that it is 20 to 80%. Does
this mean that 80% of sales staff do not do their job? Not necessarily, because
different factors such as company affiliation or experience play a role here. Basi-
cally, however, it can be assumed that half of the 80% simply does not do what
it could do. This group does not cover its own costs, often not even half of them.
Assuming that the relevant employees were immediately assigned to another
company division or even released, the changes in terms of the team’s overall per-
formance would be insignificant or even negligible. An example calculation of the
improved profitability is shown in Fig. 3.1.
EXAMPLE CALCULATION IMPROVED PROFITABILITY OF A SALES ORGANISATION
320%
Return on sales
With a 40-strong team that currently achieves a new business
gross profit of 4,000,000 euros, this means: 8 sales people
together generate 3,200,000 euros, i.e. 400,000 euros p.a.
per head. If each salesperson makes 125,000 euro
cost-to-company per year, the return on sales for this
SEAL top group would be 320 percent (factor 3.2). A very
respectable value!
40>24
The remaining 32 sales people together generate only
800,000 euros, which corresponds to an average of a meager
Team reduction 25,000 euros per head – i.e. a shortfall of 80 percent (!). If we
now reduce the sales organization by half of the sales people who
are to be assigned to this 80 percent, the team is reduced from
40 to 24 people.
67% The previous customers of the 16 people who are now leaving
the team will be distributed evenly among the 16 members of the
Improvement "Development" group remaining in the sales team. This has an
enormously positive effect on the team's return on sales:
On average, this was previously 4,000,000 euros in total,
or 100,000 euros per head with 40 people. Now, however,
it amounts to 4,000,000 euros with a group strength of
only 24 people and thus around 167,000 euros per head. This
corresponds to an improvement of 67 percent!
40%
Finally, let's look at the total cost of the new sales team compared
to the old one: The old team had an average cost to company of
Cost reduction 125,000 euros per salesperson: 40 x 125,000 euros = 5,000,000 euros
compared to 24 x 125,000 euros = 3,000,000 euros of the new team.
This means an immediate cost saving of 2,000,000 euros and
corresponds to a reduction of the previous costs by a full
40 percent!
Fig. 3.1  Example calculation improved profitability of the distribution
3.2.3 Who is Allowed to Stay in the Team?
When deciding who to assign to the group of those who will receive a new task
from the remaining 80%, the following criteria must be taken into account:
• Performance over the last two to three years (positive or negative development),
• Reasons for poor performance (justified/unjustified),
• general sales skills,
• development potential over the next twelve to twenty-four months.
It is extremely important to proceed carefully when determining this group, as it

is about separating from the 20 or 30% of the former total group that are merely
a burden on the team because they lack sufficient development potential or the
appropriate disposition.
At the same time, the other group, namely the “SEAL Development Team”,
must be identified, the members of which are currently below their possibilities,
but which have a realistic chance of working their way up to the level of the current
SEALs in the next six to 18 months and therefore may remain in the sales team.
3.2.4 Increasing Return on Sales
If this transition succeeds, the company would solely with existing resources and
without the expensive hiring of new talent again increase the return on sales.
Let’s assume that half of the “SEAL Development Team” manages to reach
60% of the SEALs’ level within twelve months, i.e. on average they generate a
gross profit of 400,000 euros × 60% = 240,000 euros, while the other half remains
at their current level of 125,000 euros each. This results in a total gross profit of:
SEALs 8 x 400,000 Euro

Development SEALs (first half) 8 x 240,000 Euro
Development SEALs (second half) 8 x 125,000 Euro
= 6,120,000 Euro
3.2.5 Gross Profit
Gross profit increased by more than 50% within twelve months, but costs
decreased by 2,000,000 euros or 40%. A surcharge of approximately 10 to 15%
should be factored in for salary increases and higher bonuses due to better perfor-
mance. If we deduct 300,000 euros from the cost reduction, we can conclude: The
costs of the sales team have decreased by more than 1,700,000 euros within one
year. If the return on sales was minus 20% before, it is now plus 85%. In absolute
terms, the following picture emerges:
1. The average gross profit of each individual salesperson is now 255,000 euros

p.a. (previously 100,000 euros p.a.).
2. The absolute costs of the sales team have fallen by 1.7 million euros p.a.
3. The total gross profit has increased by more than 2 million euros p.a.!
3.2.6 The SEAL Elite Squad
What about the 20% of salespeople, the SEAL elite force consisting of eight people,
who produce great results from the start? You can recognize a real SEAL salesper-
son not only by her excellent sales figures, but also by the following characteristics:
• Success: Achieving a Cost to Company Return of at least 2.5 or more.

• Energy: Enormous daily self-motivation, combined with the ability to bring
along and win over both customers and employees.
• Attitude: The daily routine decides 80% about the success of a salesperson.
Consequently, it is essential that the respective person has the right attitude
and is open to working on their behavior. Egos are normal with SEALs, but
they must not drift into narcissism at all—the right basic attitude and identifi-
cation with the company values are a prerequisite.
• Longevity: A real SEAL is able to achieve and exceed high goals in the long
term by benefiting from all of the above-mentioned character traits, but also by
constantly working on improving his performance—true to the motto: “You
are only as good as your last deal.”
If outstanding sales management, a dynamic incentive system and a demanding

team culture are added, this SEAL will remain loyal to your company for a long
time. In addition, a combination of an excellent development program, optional
shares in the company and a special training program for a lasting commitment to
your company should ensure this group of people is kept in the company in par-
ticular during times of crisis.
3.2.7 Virtual Sales Team
In addition, one should consider whether to build a new, “virtual sales team” con-
sisting of the group of only 16 salespeople who produce insufficient results. These
could take over customer care in the back office at significantly lower costs. Or
they could be assigned to other company departments such as customer service or
product management. Everyone has certain predispositions and talents after all.
Unfortunately, it often happens that these remain unrecognized, and sometimes
employees want to continue doing what they are not necessarily very good at out
of convenience and fear of change—such as staying in sales. Not least because
this job has a lot to offer in terms of free time management, bonuses, company
car, etc. Therefore, consistency in approach is extremely important. This consist-
ency contributes to the fact that
• the perception of Sales by the other business units is changed by the enormous
positive performance increase,
• the job of the salesman as such becomes clearly more attractive and to exer-
cise it becomes almost a privilege,
• talent from the outside can be won more easily for the expansion of the sales
team, because very successful people usually attract other successful people.
3.2.8 The Entrepreneurial Added Value
Finally, we can conclude that the following entrepreneurial added value has arisen
in the previous example through the SEALS SALES program:
• The average gross profit per salesman is now more than 250,000 euros p.a.
(before 100,000 euros p.a.).
• The absolute costs of the sales team have decreased by 1.7 million euros p.a.
• The total gross profit has increased by 2.12 million euros p.a.
• The public image of the “Sales” business unit within the corporation has been
significantly improved.
• The competitiveness of the entire company has been increased.
• The share of static sales has decreased, which means higher resilience in the
event of future crises.
• Additional capacity for new product or business areas has been created.
Even if we—extremely conservatively—assume that the total gross profit will

only increase by 50%, a seven-digit result improvement will still be achieved in
sales (see Fig. 3.2).
PERFORMANCE CULTURE: A FRAMEWORK
NEGATIVE SALES
HIGH
INVEST / ORGANIZATION
CASH-BURNER TOO LARGE
SALES COSTS
PEAK
WASTED
LOW
PERFORMANCE
OPPORTUNITY
BREAKTHROUGH
LOW HIGH
PROFIT GROWTH
Fig. 3.2  Performance culture diagram
3.3 Make Recruiting the Best Talent Your Top

Priority!
Being able to fill a sales position should finally be considered something special
again, as this position is often associated with significant privileges (company
car, business trips, etc.). Of course, only the best should be considered! However,
many corporate leaders have still not realized that it is one of their most important
tasks to attract the best talent to their company. And not least, the same mistakes
are made over and over again in recruiting. For example:
• Too low entry barriers

Being entrusted with a sales job is no longer a privilege today. Rather, sales
have become a commodity. In my view, it should be just as difficult to enter
3.3 Make Recruiting the Best Talent Your Top Priority! 75
the sales of a company as to get a middle management position with team

responsibility. Most executives have a direct responsibility for results, which
applies to every junior salesperson from the first day! A salesperson, although
not a leader in the original sense, has it even more difficult: he has to “lead”
several people cross-functionally, that is, to build up the necessary support for
a new large customer and, if the business is running, to “sell” the customer
internally. Unfortunately, however, an only average salesperson is often hired
because there was no better one available at the time.
• Settle for average—poor performance culture
This creates a vicious circle: If I only settle for the upper average, I will never
be able to build the best sales team in the industry. On the contrary, it will be
condemned to inertia and mediocrity. A real performance culture will never
develop in this way. For this reason, 98% of all sales organizations are too
large!
• Tighter setting and recruiting processes
Imagine you are a coach of a team in the regional league of basketball and
driven by the ambition to be promoted to the second highest national league
within two to three years. Will all the current players stay on the team you
were promoted with, or will you have to make changes in this respect? Of
course, you will have to ask yourself the following question: Which of the
players has potential for development and which does not? Furthermore, you
will probably have to deal with how you can lure excellent footballers basket-
ball players away from other, better clubs that are currently even playing in a
higher class. These players will only come to you—in addition to adequate
pay, which is very likely to be far above what your club currently pays—and
especially stay in your team if they find structures that do not lag behind the
professionalism of their former club. This means concretely, for example, that
the new offense are supported by a very good center as well as defense and
must be supplied with passes and balls in order to be successful at the end
of the day. Now apply this image to your sales team: It is not about imitating
the best companies in your size or fighting with their weapons, but only about
professionalizing sales in order to achieve the same quality. Perhaps you will
find that you currently only have one or two or possibly no SEALs and at most
half of the employees are currently “SEAL Developers”. However, you have it
in your own hands to create a performance culture with which you can build a
team—subject to the necessary investment funds. Therefore, actively involve
your best employees in the job interviews. They know very well who fits in
with you and your team and are a good counterweight to the famous gut feel-
ing that quickly tempts one to decide in favor of a certain “favorite candidate”,
which can be deceptive.
The performance champions are usually given far too little attention. It’s roughly
like with an NBA team: They will always remain middle class and will never
have the chance to win the NBA if these high performers are not continuously
developed and supplemented by congenial, sometimes even expensive other play-
ers. And it cannot and must not satisfy you if you do not have a team that per-
forms above the industry average. Because: If you have one or two salespeople
who significantly outperform the other team members, they can eventually no
longer identify with the large majority of the team, or—worse still—they let their
performance drop. The result is either an attrition to the competition, which thus
gains in strength, or a more expensive, less optimally performing team.
3.4 Stakeholder Management: Efficient Linkage

with Operational and Product-related
Departments
As is generally known, a good offense does not score any points on its own, and
if it ever happens, then only by chance or pure luck. But the latter is known to
last only a short time. Let’s use the defense and center for the following analogy:
The back office is the center that plays the right balls, i.e. products, to the offense,
i.e. sales, and the defense is your operational or customer service that handles the
business. From time to time, a defensive player can make a decisive pass directly
to the offense or even score a goal himself—for example with a powerful rebound.
That’s exactly how it is in real life, too, when a new deal can be initiated with the
help of operational employees. Often, salespeople underestimate the value-creat-
ing function of operational or customer service. Remember: These employees are
in daily contact with your customers.
In my experience, these are the most common critical points that can lead to
great frustration in your sales team and, in the worst case, are responsible for
irrevocably losing hard-won customers to the competition. Of course, you are
now asking yourself how you can avoid this.
Align Sales Goals with Product Goals

Align your sales strategy with your company’s product strategy. In most compa-
nies, certain volume targets are set for the product, for example, in maritime ship-
ping TEU or in airfreight tonnages growth. Check for which routes these volume
targets apply. If, for example, the highest intended volume increase is announced
for the North American area, your colleagues are also most likely to support sales
in this respect if they win the corresponding target customers.
3.5 Weighting of the Incentive System 77
Furthermore, it is a good idea to invite the product managers to your sales

meetings or sales conferences on a regular basis so that the team always receives
an update on the most important product developments and questions about the
target customers can be discussed directly.
3.5 Weighting of the Incentive System
I will go into detail on the incentive system in the next section, but I would like to
point out here that you can use certain volume targets or product strategies won-
derfully for weighting in the incentive system. For example, if your product needs
more heavy loads (dense) for export to the USA from Germany next year, you
can incentivize volumes won on this route somewhat higher than on other routes.
The advantage for both parties is obvious: The product can increase the profit-
ability of the route as a whole, while the salesperson receives a higher bonus for
the same business. Furthermore, this keeps the bonus system “fresh” and makes it
varied, as different weights for the bonus are set each year.
3.5.1 Progressive Incentive System and Recognition
A true meritocratic leader advocates for a fair and above all simply designed
bonus system. Such an incentive system must be representable on a single slide
and understood 100% by every employee. You think these are simple basics?
Then I’m afraid I have to say that these two characteristics, in my experience,
apply to less than 20% of all incentive systems. Most bonus systems I’ve been
confronted with so far are too extrinsically focused and much too complex.
In addition, money has a very short half-life in this context: research indicates
a duration of only three months in which a higher salary or a more generous bonus
makes one happier. A further complication is that a higher salary or a higher bonus
is not a long-term factor for more happiness or greater satisfaction above a cer-
tain income threshold. Researchers Daniel Kahneman and Angus Deaton assume
that this mainly affects incomes of around 60,000 euros (Kahneman and Deaton
2010). Even if with record inflation (at the time of writing this book) the amount of
75,000 euros the amount isn`t an extremely high salary in most developped coun-
tries. 
Now you may be wondering how you can still have a positive effect on your
employees with a salary increase. It is important to note that, according to the
researchers, the amount of the salary increase must be at least 7%. Increases of less
than this can even have a negative effect, because an increase of, for example, 5% can
be perceived by their employees as not being appreciative of their performance. More
money alone is therefore only a very limited motivation tool. To achieve the desired
effect effectively, it must be cleverly combined with other, non-material incentives.
Everyone has a very specific idea of what an incentive system should look
like. Therefore, it is very important when choosing the incentive system that it fits
exactly to the values of your sales organization and to your corporate philosophy.
3.5.2 New Business Bonus—Extrinsic
This bonus should be limited to a maximum amount per customer (for example,
10,000 euros) to avoid that an employee focuses too much on a specific customer
and your customer portfolio is not diversified enough. However, the number of cus-
tomers with which he can qualify in the bonus system should and must be unlimited.
The underlying calculation is as follows: In any case, it is better that you have won
the new customer than if you had not, and thus a win-win situation arises for both
parties, namely your company and your employee who has won the new customer.
Consequently, the amount of the bonus payment is theoretically unlimited and
thus a real incentive for constantly improving performance is given. And yes, this
can mean that your employee may earn more than you or even more than your
CEO. In other industries this is quite common. So it is not unusual in Silicon Val-
ley for outstanding programmers to earn a seven-figure salary. The reason for this
is that software is extremely scalable and the return on investment in an excellent
programmer who helps a new product break through is extremely high.
Weighting between Sales and Net Profit

A proper weighting between sales and net profit is important in that too strong
a weighting of one of the two factors can lead to non-sensible growth: With too
strong a focus on sales growth, your salespeople will definitely want to win the
customer, no matter what. In addition, they can be positively influenced in their
plans by trends or developments for which they are not responsible—such as the
Suez Canal crisis, which, accompanied by a massive shift in demand in maritime
transport due to the coronavirus, led to a massive increase in freight rates. In this
case, sales even fell by 50% in volume, but still doubled compared to the previous
period due to the quadrupling of freight rates.
If, on the other hand, the incentive is too much on gross profit, this is also not fair,
as in most cases the sales have no way of influencing what the purchase price is.
3.6 Remove Typical Performance Obstacles from Your Path 79
So if your Procurement does a bad job negotiating with service providers (not
just in terms of rates, but also in terms of capacity), the sales will be punished
unjustly.
The solution lies in the fact that volume growth is given a central role, namely
on verifiable, newly acquired relations. Furthermore, as a sales manager you have
to clearly explain to your employees the difference between newly closed volume
and general growth in profit.
I myself was once at a key account training session, during which a business
development manager proudly announced that he generated ten times his own
costs per year. However, in the reports only the total profit of all his customers
was displayed, not the delta from the previous year to the current year, and it was
also not clearly specified how new business should be marked. Not to mention
that he didn’t even know how and by what factor the volume hads increased.
3.5.3 Bonus New Business Profit—Intrinsic
An excellent “soft” incentive, for example, is when sales employees with above-
average performance can qualify for administrative support, for example in the
form of an assistant. This contributes in a significant way to the fact that your top
salespeople can focus maximally on revenue-generating tasks.
It is also important that your employees are shown appreciation internally,
especially in larger or rapidly growing organizations. I constantly experience
that salespeople who have decades of experience complain that the appreciation
shown to them is left behind to a certain extent as the company grows.
Finally, I would like to emphasize once again that the bonus system must be
so simple that it fits on one DIN A4 page or one slide and is really understood by
every individual salesperson. This is of elementary importance and must not be
underestimated! In the course of the book I will also come back to the topic of
“team goals”, because often there is a team behind the individual salesperson that
has a certain share in the customer transaction. Figure 3.3 shows an example of a
simple bonus system.
3.6 Remove Typical Performance Obstacles

from Your Path
As already described, your employees are usually motivated by themselves. Make

sure it stays that way! Reinhard Sprenger has rightly recognized in his book
“Mythos Motivation” that employees are primarily demotivated by two things: by
KPI BONUS SYSTEM
1 2
Revenue Target Profit Target Margin
(Ex: 1-1.5 million euros p.a. rolling) (e.g. 10–15 % = 1.5–2.5 x
Cost-to-company factor base
fixed salary + fixed allocation)
As soon as one of these two targets is met, you are entitled to a bonus.
If profit = below x % ... However, this can be reduced if the other target
is not met.
3 4 5
Visiting Number of Team Goal
Targets Shipments
CRM (Internal
Customer Data
System) Maintenance Regularity (but max. 10 % and
e.g. 5/week on top)
(Visits must be made by
the 7th day in the new
month for the last month
be entered)
Conditions
Cap per customer 10,000 Euro (range from 500 Euro), but number of
customers unlimited. For key account customers possibly higher cap.
Continuous reporting (monthly): Turnover & profit per sales employee,

which is transparently distributed for respective country.
Bonus can be displayed on one page
Simple, effective and logical methodology
Much higher probability of faster new business growth
Fig. 3.3  KPI bonus system

3.6 Remove Typical Performance Obstacles from Your Path 81
processes and by the people around them (Sprenger 2014). Your most important
job is not to motivate your employees, but to create an atmosphere and an envi-
ronment in which they want to perform at their best on their own initiative and
find all conceivable tools to support them.
It is much more important that you always know what “demotivates” your
employees than that you are clear about what actually drives them. Your job is to
defuse process resistance (e.g. too strict and often meaningless requirements from
the tendering department or the legal department) and conflict-ridden situations.
You should also hold individual interviews with your employees at least once
a month in order to be able to grill them thoroughly and find out what demoti-
vates them. Often they do not dare to raise certain issues in departmental meet-
ings in front of their colleagues. For this reason, a team consensus achieved in a
meeting can sometimes be very deceptive!
Below are two examples from practice of process resistance. Some of them
probably already exist in your company!
3.6.1 Example Bureaucracy
Make it your top priority to free your employees from bureaucracy as much as pos-
sible. You say you get the requirements from headquarters or from your regional
management? Then it’s high time to “challenge” them in the positive sense.
Why do certain requirements exist and what purpose do they serve? Can it be
proven that the extra hours your employees have to spend on reports or long and
tedious tables are really worth it? Or are they solely due to an excessive control
mania, through which the few black sheep are to be identified, for which the great
majority of employees have to pay the price? A very good example of this are
manually filled out reports, travel authorizations and travel expense reports. Once
we turn 18, we are all able to take out loans, buy a house or a car and, in theory in
politics, even become Chancellor or President. So every sales manager should be
assumed to be able to decide on all business trips of his employees.
You can also take it one step further and, as Gary Hamel aptly describes it
in his book “Humanocracy”, create 100% “frontline ownership” by completely
eliminating the approval process for your employees’ business trips and giv-
ing sales the opportunity to independently plan and sign off on the trips of their
team members (Hamel and Zanini 2020). The only condition for this: The travel
expenses of all salespeople are visible in the intranet and are displayed in a per-
centage ratio to the new business profit generated. Radical? Certainly, but actually
achievable! In this way you can reduce the effort for travel expenses and their set-
tlement by at least 90%. To gain first-hand experience, you should start with this
project on a voluntary basis with a few employees, give them at least the choice!
If you spend an hour a week signing reports and each of your employees
spends two to three hours a month creating them (plus approval processes), this
adds up to several hundred hours a year for ten employees. However, in each of
these many hours, your employee could have been revenue-generating instead of
dealing with such a revenue-limiting and annoying task.
Calculate what your sales in relation to their own complete overhead costs for
travel expenses have caused in recent years. The result is certainly almost neg-
ligible. And with a new business target of twice to three times the own costs, it
should not matter whether 120 or 180 euros are spent for an overnight stay in a
hotel.
If you grant your sales employees such autonomy with regard to travel
expenses and relieve them of the annoying creation of actually useless reports,
you will be rewarded with another great advantage: You really make your
employees mature and grant them 100% responsibility. Isn’t that what we often
wish for, but only too rarely find in our professional life?
3.6.2 Example Pipeline Reports
In analogy to the 80–20 principle, it can be said that 80% of all CRM systems
(customer relationship management system) found in companies generate more
effort than they generate money. On the one hand, this is because there are too
many mandatory fields that are queried, and on the other hand, because there is
no uniform understanding of how to deal with the CRM. Although there is often
an SOP (Standard Operating Procedure) or corresponding training is carried out,
there are rarely globally binding rules.
In addition, it usually takes much too long to create a certain activity or to file
a visit report. However, the biggest problem is a lack of automation function and
connection to operational systems. Only few CRMs are able to do this, CargoW-
ise is one of the few good examples that are able to do this.
As a result, there are often complicated manual reporting requirements. The
most prominent example is the reporting of the sales pipeline, namely monthly or
quarterly.
Do not get me wrong—it is important for salespeople to regularly remind
themselves where they are currently, what the probability of completion and the
pipeline strength are, but usually too much irrelevant information is requested and
wrong probabilities are calculated on the basis of wrong assumptions.
3.6 Remove Typical Performance Obstacles from Your Path 83
A simple example: If a customer is visited, the probability of closing of most

pipelines automatically adjusts to 10 to 20%, when an offer is submitted to 50%.
However, this is nonsense, because the range is at the time of offer submission
from my experience 5 to 60% (!): 5%, for example, when an offer is sent to a
“non-decision maker”, 60%, if the recipient is actually a decision maker and if
prior to the offer submission, the meeting to discuss the offer was already agreed
(Fig. 3.4).
 Offers should preferably not be submitted to people where it is not

clear whether they are decision-makers. In this case, your team is
acting without any real prospects of success, and valuable energy and
time is wasted that could have been invested in more promising cus-
tomers.
These few but extremely effective KPIs put the sales department under intense
pressure and really help to make forecasting (predictions) better and more accu-
rate. So a very good pipeline can consist of just four to five KPIs—and “that’s
it”. Your employees will thank you for it and as a result will also be much more
focused on their work.
CLOSING RATE PROBABILITIES
35% Offer to verified economic buyer
60% There is a fixed appointment with the

Economic buyer, at which the offer is discussed
5% The offer has been submitted, but it has not been clarified
whether we are dealing with a decision-maker
Fig. 3.4  Closing Rate Probabilities

References
Hamel G, Zanini M (2020) Humanocracy. Creating organizations as amazing as the people
inside them. Boston, MA: Harvard Business Review Press.
Kahneman D, Deaton A (2010) High income improves evaluation of life but not emotional
well-being. In: Proceedings of the National Academy of Sciences of the United States
of America 107 (38), pp. 16489–16493. https://doi.org/10.1073/pnas.1011492107.
Sprenger RK (2014) Mythos Motivation. Wege aus einer Sackgasse. 20., updated edition.,
Campus-Verlag.
Studyflix GmbH (2022) Pareto Prinzip. Published by Studyflix GmbH. https://studyflix.de/
wirtschaft/pareto-prinzip-3898. Last access on 14th March 2022.
Tambe Neil (2013) W. L. Gore A case study in work environment redesign. Published by
Deloitte University Press. https://www2.deloitte.com/content/dam/insights/us/articles/
w-l-gore/DUP345_Case-Study_W.-L.-Gore_vFINAL.pdf. Last access on 19th February
2022.
How to Win and Retain Talent in the
Company 4
 In this chapter you will learn what really matters in the successful
search for talent and binding it to your company today. And we will
see why “Human Resources” plays a subordinate role in many compa-
nies. We deal intensively with innovative ways of recruiting and dispel
the myth of resource and skilled labor shortages. At the end of this
chapter you will know how to solve the skilled labor problem once
and for all!
When I started my career at Maersk and took part in the MISE management
trainee program, the then Chief HR Officer Bill Allen said the following words
during the graduation gala, which I will never forget: “The role of HR is gen-
erally massively underestimated. The Chief HR Officer should receive the same
powers as a Chief Financial Officer and thus be number two in the company!”
That was 2008, so just over 15 years ago, and his statement is truer than ever
today, especially in view of the increasingly acute shortage of skilled workers in
the logistics industry in recent years.
Let’s take stock: Hardly any topic is more important in the logistics industry
than attracting and retaining talent, regardless of level. At the same time, the inter-
nal importance of the HR department could not be more opposed to this finding:
It has degenerated into a purely internal service role and has no budget authority
whatsoever in most companies. This makes HR nothing more than an administra-
tive and support assistant. A respected colleague of mine, Alan Weiss, refers to HR
as “Hardly Relevant”. This may sound very provocative at first, but if we’re hon-
est, it’s true in practice. How did this come about?
For one thing, HR positions are usually filled by people who have no experi-
ence whatsoever from the various business units. However, these business units

https://doi.org/10.1007/978-3-658-39756-2_4
86 4 How to Win and Retain Talent in the Company
are decisive for the distribution of budgets, as they are responsible for the actual
value creation. On the other hand, the HR department is all too often left out of
important decisions or has only a passive role as a listener. As a result, HR is only
the executive and not the driving force. As CEO, you can change this by giving
HR the appropriate powers and involving them actively in decision-making.
A company is, quite simply, nothing more than a group of like-minded peo-
ple who stand up for the same goal and, as a result, sell products or services. At
the undoubtedly extremely successful Google, for example, applicants go through
three to four rounds, each with a committee of six people making the selection. If
just one of these people, in any round, vetoes a particular applicant, that person is
rejected! (Dragova 2020)
Don’t worry, you don’t have to be quite as rigorous in your selection if you
want to find very good employees. But I plead that you carry out the entire selec-
tion process over several rounds and as professionally as possible and make it
one of your priorities and by no means delegate or even outsource it. Because the
quality of the employees and the importance you attach to the selection process
are key factors in the later success of your department and your company.
By the way: A good and valuable question you should ask applicants if you
are looking for a manager is: “What do you personally see as your most impor-
tant task in this position?”
The most important task you have as a leader is to make sure you bring
together the best possible people and do everything necessary to keep them in
your company. Guy Kawasaki writes about this in his book “The Art of the Start”
that “A-people gather or hire A-people, B-people look for C-people, D-people
look for G-people, and so on, until a certain number of idiots are quickly found
in companies.” (Kawasaki 2015) Therefore, the insight and willingness of a
leader to always hire the very best talents—one or the other of which may even
be smarter than oneself—are fundamentally important for the success of a com-
pany.
Be honest: The number of salespeople who are average or perform poorly usu-
ally stands in stark contrast to the number of people who perform above average.
These are the “A-people” you would like to clone if you could. Wouldn’t it be the
logical consequence to do everything possible to find exactly these people? We
will see below that it can even be better not to replace a person who desires to
leave, but to shrink the team healthily until only the high performers and potential
high performers are left before expanding the team. In a sales organization, this is
of such significance because no other function in the company causes such high
direct and indirect costs.
4.1 Three Things You Need to Know Before You Hire a New Salesperson 87
4.1 Three Things You Need to Know Before You Hire

a New Salesperson
Most new hires are only a means to an end and turn out to be the wrong choices,
because: 98% of all sales organizations are too big! Yes, you read that right. Prob-
ably your organization is too. Let me explain this thesis with three points.
1. High-performers are extremely rare and must be retained as a matter of

necessity.
First of all, let’s define what “sales” means: This includes all people who have
a direct responsibility for results in new business and/or existing business
development. The salespeople who reach the highest heights are in the abso-
lute minority. However, they generate 80% or more of the total sales volume.
So you have a certain number of employees on your team who cost you more
than they bring in. This makes your sales team less profitable than it could be.
The trick is to bring the non-performing 80% to the same level as the 20%
top salespeople. You can read more about this in Chap. 3. The performance
champions are usually given too little attention. It’s like with a Basketball
team: They will always remain middle class and will never have the chance to
win the national championships if these high performers are not continuously
developed and supplemented by congenial, sometimes even expensive com-
petitors. The explanation for this is obvious: If you have one or two salespeo-
ple who significantly outperform the other team members, they will eventually
no longer be able to identify with the large majority of the team, or—worse
still—they will perform less well. The result is either an attrition to the compe-
tition, which becomes stronger as a result, or a more expensive, less optimally
performing sales team.
2. Working in a sales position must become a privilege again!
Being entrusted with a sales job is no longer a privilege today. Rather, sales
have mutated into a “commodity”. I have already warned in Sect. 1.4 that
logistics service providers are deteriorating into a commodity due to lack of
good innovations, and the same applies all the more to sales!
In my opinion, it should be just as difficult to enter a company’s sales depart-
ment as to get a middle management position with team responsibility!
Let me briefly explain this thesis: Most executives have a direct responsibil-
ity for results, which applies to every junior salesperson from the first day. A
salesperson, although not a manager in the original sense, has it even more
difficult: He has to “lead” several people cross-functionally, that is, to build up
the necessary support for a new large customer and, if the business is running,
to “sell” the customer internally.
3. The sales organization is too small.
And what about the other 2%? These are the companies whose sales organi-
zations are too small. Growth can only be achieved with a minimum number
of excellent salespeople and a continuous performance culture in which every
sales employee has to earn the right to work in sales again and again. The
motto here is to take a little more time to find the right person rather than to
hire someone just because there was no one else for the job.
It is truly not easy to find good employees. Companies that advertise sales or
key account positions either intend to enable growth through increased sales or
higher gross profit, compensate for poor performance through good new hires, or
to make up for the loss of a successful sales employee. Before we get into the rea-
sons for this in detail, it should be noted that all new hires have some important
things in common: They first of all represent additional costs for your company of
around 100,000 euros p.a. (salary, company car, bonuses, etc.), and often generate
a negative return on investment in the first year, as the person has to get used to
the new environment and find their way around. In many cases, an external com-
pany is entrusted with the search, whose commission in the event of a successful
placement (without the guarantee that the person placed will actually stay with
the company) is between three and four monthly salaries and which they receive
directly after the employment contract has been signed. This makes between
15,000 euros and 35,000 euros in addition to the salary and sales position.
What does this mean?
• Save yourself your new sales representative!

No matter how good and how thorough the selection process turns out, studies
and surveys show that only a maximum of 70% of all new hires turn out to be
the right “fit”, that is, that these people show good performance and stay with
the company for many years (Dickson 2021). In other words, around 30%
of all new hires turn out to be misfits, which means that not only the costs
for the personnel consulting are irrevocably lost, but also the first salary pay-
ments are made in connection with onboarding costs. This can quickly add up
to 100,000 euros per position. If you are forced to later terminate the contract
with the respective employee, this amount can even be significantly higher due
to severance payments. Unfortunately, the proportion of misfits is alarmingly
high in many companies, which is due to deficient recruiting processes or also
to bad personnel consulting firms. Therefore, the new appointment of a sales
4.1 Three Things You Need to Know Before You Hire a New Salesperson 89
position is potentially associated with enormous costs and risks. What is a

conceivable alternative to this?
• First of all, critically question whether the new appointment is really nec-
essary!
In my experience, I estimate that you can save the cost of a new hire in 50 to
60% of cases. It is also noticeable that the following reasons are decisive for
the new hire of vacant positions:
– Growth should be made possible by increased sales or gross profit. This
requires that the new employee actually achieves the targeted sales target,
which can by no means be guaranteed. A sensible alternative would be to
analyze the performance of the current team: How much sales and how
much gross margin does each of your field sales or key account managers
generate on average?
– According to the Pareto principle, 80% of sales or gross margin are gen-
erated by only 20% of the employees of the current team. This means: If
you hope for a measurable increase in sales, you have to hire an absolute
top performer who would quickly become part of the current top group or
who would be able to join this top group within twelve months. This may
be necessary, for example, if you have started a new product and there is
definitely market potential in a vertical market, but you have no one on the
team who knows this market. This makes the selection process much more
complex and demanding, as it is necessary to hire someone with years of
sales success and possibly poach him from the competition. That’s expen-
sive!
– My recommendation: Include your current top 20% top group in the
recruiting process. This applies not only to sales, but also to other depart-
ments. Successful people like to surround themselves with other successful
people.
– Do your top people perhaps know candidates who could fit in with you? Is
it worth it for members of your top group to actively help with recruiting?
Is there an attractive rewards system for this?
• A bad performance is to be compensated by a good new hire.
This is one of the most common reasons for a new appointment, but I also
recommend another approach here, because: If someone who has not even
covered his own costs in the past, resigns or is dismissed, this does not neces-
sarily mean a deterioration of the overall performance of the sales team. The
customers of this dismissed person can be easily re-assigned to the other sales
colleagues, as their utilization is limited due to the low sales. Often, these cus-
tomers can even be built up to large customers, as the success of sales often
depends on how it “humanizes” between the salesperson and the customer’s

decision-maker.
So it is worth asking whether you actually need to replace the person leav-
ing. You could also think about whether there are any other people in the sales
team who you could part ways with or who could provide more value in other
areas of the business. Everyone has certain predispositions and talents. Unfor-
tunately, it is often the case that these remain unrecognized, and sometimes
employees want to continue doing what they are not necessarily very good
at out of convenience or fear of change—such as staying in sales. This is not
least because this job has some perks like flexible hours, bonuses, company
car, etc. Therefore, consistency in approach is extremely important. On the one
hand, you can significantly increase the average performance per salesperson
because the same number of customers is now being served by a smaller team,
on the other hand you can reduce your annual costs by around 100,000 euros
with each person who does not remain in your team. Just imagine how high
this saving would be after ten years!
• The departure of a successful sales employee is to be covered.
This is, in my opinion, the most valid reason to really deal with a new appoint-
ment. Go into this entrepreneurial risk with a clear conscience, because after
all, your former employee belonged to the rare species of sales or key account
employees who bring in twice or three times their own costs. You definitely
can’t afford to do without such a high performer!
 During the search for personnel, you should intensively deal with the
question of why your former employee turned her back on your com-
pany, especially if she was a top performer. Make it your top priority
to find out!
In 80% of cases, this is directly related to the responsible manager, who either
alienated the employee through poor management quality or did not appreciate
his sales successes sufficiently. You will be surprised at how seemingly insignifi-
cant details can make the difference for a termination. Money is by far the least
mentioned reason for a departure. The remaining 20% are due to an unfair incen-
tive system, lack of career prospects or insufficient training programs.
Conclusion You can save yourself the trouble of having to rehire in the sales or
key account department 80% of the time. But if you are already looking, then
please do it right: It is quite clear that it should be “quality before quantity” and
that you should take a few more months to search (involving your top salespeo-
4.3 How to Structure & to Conduct Successfully the Job Interview … 91
ple) and assess the candidates, rather than taking a snap decision that might have
been avoidable. After all, you can operate much more profitably by taking a con-
sistent approach to underperforming salespeople using in-house resources.
4.2 What Really Matters When Hiring New Employees
Let’s now move on to the practical part and discuss how we can specifically find
out whether an employee really fits into your team and is also a true performer.
The following guide can also be applied to any other position outside of sales.
The biggest hurdle in a job interview is not to rely too quickly on one’s own
(gut) feeling, but to base the emotional element—which can often be very decep-
tive—on rational, evidence-based arguments using certain questions and the
answers that follow. In general, I recommend at least two rounds of interviews,
ideally three, always in the presence of a colleague (e.g. from the HR depart-
ment)— regardless of the references the applicant has, how long you have known
him and how urgently you need to fill the vacant position. The first interview that
you might have with your desired candidate in advance does not count as one of
the required interviews.
As far as the famous first impression is concerned, you can be fatally wrong,
whether in a positive or negative way. Surely you are looking for an employee
who shows very good performance over the long term, and therefore this consist-
ently very good performance must also be noticeable in the interviews.
Another advantage of the three rounds is that you get to know the candidate
better, and by building mutual trust, you ensure that the candidate critically
reflects on whether he still wants to occupy the position in question!
4.3 How to Structure & to Conduct Successfully the

Job Interview with an Applicant
Now let’s move on to the actual job interview: In general, you and the colleagues
present should prepare for each interview with the following questions:
1. Application materials: Have all the people who are participating in the inter-
view studied the applicant’s materials thoroughly, to ensure that they have
adequately considered this person? Believe me, this question is anything but
trivial! Too often I have experienced either as a silent observer or as an appli-
cant that the documents were leafed through for the first time.
2. Expectations of the conversation: What are your expectations and goals for
the conversation? A meaningful expectation could be to have an open conver-
sation; not an interrogation, but a conversation on an equal footing. Here is a
list of important questions that you and your colleague should ask yourselves
in advance:
• What is important to you, who is the ideal person, regardless of the infor-
mation in the job description? What do you want to see, and feel, so that
you can say with a clear conscience that this person fits you?
• What does the person in question need to bring so that you can really say
with conviction: “Yes, that’s her”?
• By the way, this question is also ideal for a preliminary interview with your
colleague, because it expands your horizon, because usually we are looking
for people who think like us. But it is often the people who think differ-
ently or even people who are smarter than us who really bring us and the
team forward!
• What goals do you pursue with the appointment, and what questions do
you think need to be answered in the interview in order to end it?
• Can you give us a case study that you can present to the applicant? This
could be a current sales challenge from everyday business or an imaginary
problem. With such a case study, it is always exciting and enlightening to
see how the applicant approaches the solution with which methodology and
approach.
3. Time limit: Set a time limit for the first conversation of 30 minutes. Believe
me, that’s more than enough! If you need more time, you are either not ade-
quately prepared, or you are dealing with certain issues twice. Conduct the
conversation always with two people, never alone. On the one hand, you can-
not possibly take important notes and stay focused in the conversation at the
same time, on the other hand, you can observe how the applicant interacts with
another person. Four eyes see and four ears hear more than just two. For the
second conversation, bring a possible future colleague of the applicant with
you, namely one who belongs to the high performers and the team players.
Because this person can probably assess the “team fit” better than you can
yourself. Not least, he will spend more time with the new applicant in the
daily business than you will in your function as a manager. It is also important
that this colleague is not in any relationship with the applicant. Tipsters are not
valuable here, it is better to have the neutral assessment of a person unknown
to the applicant.
4.3 How to Structure & to Conduct Successfully the Job Interview … 93
In the first conversation you should discuss the following questions:
• How high is the ambition of the potential employee to want to be counted

among the really best?
• What standards does the applicant set for himself and when is he satisfied with
himself and his performance?
• What specifically fascinates him about sales?
• What values drive him and how do they fit with the values of your leadership
understanding (as a direct supervisor) or—if this should not be the case—with
the company values?
• In this order: What demotivates the applicant, what motivates him? Can you
really offer him a motivating environment and equally motivating support
functions so that he is not demotivated?
In addition to the points you should clarify in the interviews with the job appli-
cant, you are well advised to find out the following:
• Numbers: Has the applicant contributed to revenue growth of more than

1,000,000 euros p.a. in the past or has he already achieved similar numbers
that you will require from him in his new position in other sales jobs (the
industry is irrelevant)? Which sources can confirm this to you independently
of each other? Bring a healthy dose of skepticism and have the calculation
basis explained to you in all circumstances. It is relatively easy to become
a “revenue millionaire” (especially in 2020 and 2021 due to the increased
freight rates!), but it is much more difficult to acquire new volume!
• Certificates and references: Here it applies that you should not trust any certifi-
cate that you have not written or at least co-authored yourself! Better and abso-
lutely necessary is therefore to talk confidentially with former companions or
the signatory of the certificate. If this is not possible for compliance reasons,
you should research on professionally used media such as LinkedIn who is
connected with your applicant. Afterwards, ask him if he can put you in con-
tact with two to three people at his former employers so that you can call them
independently and quietly. You think that sounds a little unusual? But it’s not so
much, because after all, you offer your potential customers to talk to your exist-
ing customers about the current quality of your services. Make sure you use this
principle, especially if you are about to make a commitment to the candidate!
Values, Drive and Ambition

Values are undoubtedly something very individual, but a pattern can always be
seen when excellent performing salespeople from different companies are com-
pared with each other. During my projects, I have gotten to know, spoken in
depth, trained, or coached more than 500 salespeople over the past years. In doing
so, I have identified two types of very successful salespeople..
The first group consists of people who are more likely to be lone wolves and have
a very individual way of often annoying others. However, their unyielding will
to succeed with the customer leads to outstanding numbers. They often make a
quick, arrogant impression on others, even if they have no intention of doing so.
The members of the second group create significantly more internal alliances,
and because of their good relationships, they are able to get important stakehold-
ers to not only support, but also to identify with significant customer deals as if
they were their own. As a result, they make a significant contribution to new busi-
ness. They are extremely friendly, very confident, and often give off a charismatic
impression.
So, what values unite these two groups? From my point of view, the four fol-
lowing criteria define the performance-DNA:
1. The absolute will to want to be among the best

This first value can be applied to many other disciplines. Look at champions
like Lewis Hamilton, Roger Federer and : What sets these three masters of
their craft apart? The will to be among the best or the best in the world! This
will is either present or not. You cannot increase it with extrinsic incentives,
nor can you awaken this will in someone. No athlete who is successful in the
long term pursues his sport primarily for the money, but rather mainly because
of his never-ending inner drive. That is why it is advisable to find out in job
interviews whether this disposition exists in your applicant. For this type of
character it is especially important to find an environment where he can
become or remain number one. This suggests that these people work harder
than others, appear more persistent, fight resistance longer and more inten-
sively, and almost never give up.
2. Passion
The passion to overcome the task at hand is almost a requirement for the sales
job. Because only if we are driven by this passion are we humans willing to
face resistance and work harder than others until we have overcome these
obstacles. Furthermore, passion in this context means that the sales job is more
than just a job, it is almost a calling.
4.4 Overcoming the Shortage of Skilled Workers 95
3. Courage or humility
Top salespeople are extremely brave because no customer seems too difficult
for them. They also have the ability to assess when the customer or the deal
is too big. That they are brave can be easily seen in them when they criticize
even when no one else dares to. High performers are sometimes very unpleas-
ant colleagues, because they address omissions on the part of management
directly and openly, and this also in front of others and in a larger group. You
have to deal with it and be able to properly assess such behavior.
4. Adaptability
This last value is extremely important for long-term success. For example,
before the pandemic, it was hardly necessary for salespeople to have excellent
skills in using virtual tools such as Zoom or Microsoft Teams. After the Corona
virus hit hard and forced salespeople in front of the screens for many months
(as well as their customers), it was a matter of quickly adapting and getting
up to speed in virtual communication technology. Such adaptability is also
required when your company is bought by another or you start with completely
new technologies. So ask yourself whether your applicant can and will adapt
quickly to a new scenario, or whether he is more inclined to stick to the tried
and tested.
I do not want to go into further detail here, as this book is not a handbook for
successful hiring practice. Always consider which questions fit your specific situ-
ation to find out the values that make up your candidate. Also, consult your HR
department and brief them as thoroughly as possible regarding the requirements
you have for your new employee!
4.4 Overcoming the Shortage of Skilled Workers
In the previous pages, I have emphasized the importance of a detailed preparation

so that the emotional element loses influence especially with the famous “first
impression”. Furthermore, the question arises how to get the currently widely
lamented shortage of skilled workers under control in the long term.
4.4.1 Solving the Skilled Worker Problem
Every single company in the logistics industry is asking the following question:
How can I solve the skilled worker problem in my company? When answering
this question, I will focus on commercial employees below, as this is ultimately

what this book is all about.
Just as there is a shortage of truck drivers, there is a shortage of qualified com-
mercial employees, and not just in sales. No matter who I talk to, the shortage of
skilled workers is one of the most pressing issues of our time. If you ask logistics
companies why the situation is currently like this, the bad image of the industry
is often mentioned. Furthermore, it is also repeatedly said that “in industry” (by
this, referring to the customers of logistics services) the pay is better.
It therefore makes sense to first deal with the question of what contribution a
company can make to image improvement. Here we are quickly the as yet imma-
ture field of Employer Branding. According to Ehmler, this is defined as follows:
“Use of a branding strategy to influence the way current and potential employees
see the employing company.” (Ehmler 2017)
An excellent and successful example of this is a campaign by one of the larg-
est local tram operator “Rheinbahn” in Düsseldorf, Germany. This company was
faced in particular at the beginning of the 2010s with a significant shortage of
skilled workers in bus and tram personnel. The management of the “Rheinbahn”
therefore decided on a clever campaign: at stops, the portrait of a train driver
was shown on large billboards (see Fig. 4.1). This campaign was deliberately
highly emotional. It gave very personal insights into various areas of activity at
the “Rheinbahn” associated with a story in which it was explained what drives
and above all makes the respective employee unique at work, but also outside his
work.
If one were to transfer such a billboard to a logistics service provider, for
example, the following campaign would be conceivable: The photo shows a sales
representative standing on the tarmac next to a giant cargo plane that has just
arrived and is carrying life-saving masks, vaccines, medical equipment or drugs
on board. The accompanying story could be designed so that it combines exciting
sales activities with a clear purpose, namely to contribute to the welfare of society
in times of the Coronavirus pandemic or to support humanitarian aid in times of
war.
On social networks such as LinkedIn, dozens of pictures could be published,
accompanied by short stories from proud salespeople and managers who also stand
next to large cargo planes. Why shouldn’t such a story also be made accessible to
a larger number of people? In addition, one could supplement such a story with an
operational employee who was instrumental in the smooth execution of this air-
freight charter. I am sure that many people who are not familiar with the subject
matter do not even know that they can do something like this at a young age!
Fig. 4.1  Example campaign of the Rheinbahn. (From Rheinbahn 2011/2012; with kind
permission from © Rheinbahn AG 2011/2012. All Rights Reserved)
It would be desirable for this campaign to be carried out on a larger scale, as

the German army “Bundeswehr” has done. The troops have similar problems
(poor image and lack of knowledge about the fields of activity) as the logistics
industry. Figure 4.2 shows an example that is simple, but provocative and pithy.
Of course, a “company” like the “Bundeswehr” has more than enough budget
to finance such campaigns. But think again about the example with the Rhein-
bahn. The company is indeed wholly owned by the city, but it is run largely on
a private-sector basis. The Rheinbahn makes just around 250 million euros in
sales per year (Rheinbahn 2021) and has nevertheless become known regionally
through its progressive campaign. And what is even more important: With the
help of this campaign, it has finally solved its shortage of skilled workers.
If your company makes significantly less sales, it is a wise idea to finance such
a campaign in partnership with other companies. Or you can calculate what the
shortage of skilled workers costs you each year or what you have in free funds
Fig. 4.2  Example
campaign of the
Bundeswehr. Translation:
EVERYWHERE GREEN!
EXCEPT HALF-BAKED!
Do, what really matters!
(From: Bundeswehr 2018;
with kind permission from
© Bundeswehr 2018. All
Rights Reserved)
available through vacant positions in the budget. The money for such a campaign,
which cost the “Rheinbahn” only in the five-digit range, is always well spent.
I have not seen an emotionally charged campaign of the logistics industry in
public space like that of “Rheinbahn” or the “Bundeswehr”. No wonder then that
employer branding in the logistics industry is still a bit of a damp squib. There
has never been such a high momentum for such a campaign as there is today:
Almost every consumer has experienced for themselves through the Suez Canal
blockage in March 2021 what it means when the world’s most important trade
route for freight ships is impassable and, as a result, Easter gifts and building
materials do not arrive. Furthermore, millions and millions of masks and thou-
sands of ventilators were procured and distributed at high speed—a logistical
masterpiece that was prominently and laudably mentioned by almost all media
at prime time. So an awareness of the systemic relevance of the logistics industry
has arisen. And this awareness is currently holding.
Finally, I would like to mention one last aspect, namely the widespread mis-
conception that years of sales experience within the logistics industry are required
for a successful logistics sales operation. We have already seen that today it is
above all about thinking not so much about products, but about solutions. Many
other industries have been doing this for years, for example the insurance, soft-
ware and pharmaceutical industries.
All of these industries, like the logistics industry, have a B2B focus (business
to business) and similarly structured teams, similar customer group sizes, mar-
kets, etc. Just as it is now commonplace to promote women into leadership posi-
tions and to hire disabled people, you should open your “candidate funnel” to
applicants from other B2B-dominated industries. There are numerous examples
of lateral entrants who, without specific logistics expertise, have achieved amaz-
ing results in a short period of time. The main reason for this is the right atti-
tude combined with a high willingness to perform and train. The attitude is much
more decisive for long-term success than the mere knowledge. This can be easily
acquired (not least through the inflationary knowledge available on the Internet),
and a good support network can ensure that the lateral entrant avoids beginner’s
mistakes. In addition, there are many successful examples of how companies have
learned by copying successful models from other industries.
When I talk to this approach with experienced managers or HR professionals,
it quickly becomes clear that they are in their own way with their outdated think-
ing. Just as in motorsport the philosophy was long “cylinder displacement can not
be replaced by anything but cylinder displacement”, so it was with the leaders for
just as long the guiding principle “experience can not be replaced by anything but
experience”. In motorsport, turbochargers and alternative drive technologies have
made this guideline obsolete. That’s exactly how it is with experience. Please do
not misunderstand me: Of course, experience helps a lot to manage certain dif-
ficult situations better and more calmly. But it is also true that innovation cycles
are getting shorter and changes are progressing more quickly. Certain long-term
experiences can lead employees to “experience prisons”, so that they are in the
way of an important change. So the one who does not even visit this “prison”
because of other industry experience can have a clear advantage, according to the
saying: “Everyone says it can not be done until someone comes along who did
not know that and just does it.”
An example: I know a lateral entrant in a large international, family-run logis-
tics company who previously worked in the hotel industry for almost ten years
and studied political science. This person has worked at a breathtaking pace and
is now one of the best salespeople in Europe at the logistics company.
You certainly nod in agreement with the approach of giving side-enterers a
chance, but I would like to “challenge” you here: How seriously do you really
look for suitable employees in other industries? How conscientiously does your
HR department or your talent recruiting approach applicants from other indus-
tries? Is the cross-industry approach also reflected in your job advertisements? 
Conclusion With a much more public-focused and effective employer branding

and with the conscious addressing of candidates from the IT, insurance and phar-
maceutical industries, you can massively increase your access to potential can-
didates. Finally, the “wisdom of the many” methodology shows how, thanks to
your existing workforce, you can not only increase the potential candidate pool
for corresponding positions by a multiple, but also increase the chances of suc-
cessful retention within the company.
4.4.2 Using the Principle of the Wisdom of the Many
I am often asked if I can also support the search for suitable sales staff. I gener-
ally refuse this, because I am a consultant and not a recruiter. Of course there are
colleagues who do both, but believe me: With such a philosophy you will achieve
at best average results, because headhunting and consulting are two completely
different disciplines that nobody can master equally well.
In the following I would like to “challenge” you a little bit with regard to the
commissioning of headhunters, because with no other external service as much
money is wasted as here: Before companies commission a headhunter, who often
charges three to four times a monthly salary (and in some cases half a year’s sal-
4.4 Overcoming the Shortage of Skilled Workers 101
ary!) as a placement fee, it is worth looking at alternative, much more cost-effec-

tive and even promising options.
The tactic of the network of many is particularly suitable when an important
position has been vacant for a long time. According to psychologist Corinna Hart-
mann, every person knows an average of 150 people and meets about a million
people in their lifetime (Hartmann 2021). Most of us are connected to profes-
sional networks such as LinkedIn with 200 or 300 and often more people. In our
circle of acquaintances we have 20 to 30 good contacts that we can call at any
time. So you can see how high the proportion of possible hidden potential can
be that slumbers in the contact lists of your staff. The question is how you can
use this pool of contacts for yourself. First of all, it must really pay off for the
person concerned to bring one or more of their contacts into play. I am often told
that there are certain incentive systems in the company concerned if a personal
recommendation leads to an appointment. But if you look closely, these are by no
means adequate financial incentives, as the following calculation shows:
Example
A company is looking for a key account manager and offers an annual salary
of just under 100,000 euros. A headhunter would receive 30,000 euros for the
successful placement, or about one third of the salary, while the placement fee
for an internal tipster would be limited to 1000 euros or even less. That’s of
course much too little!
It makes a huge difference if you tell your staff that the decisive tip that
leads to a placement will be rewarded with a five-figure sum. You will thus
motivate at least ten times more employees to thoroughly research a suitable
person in their networks. And yet you could save money and, for example,
only award half of the amount that would be due for a headhunter. The incen-
tive for your employees would still be high enough. ◄
Please also keep in mind that successful people typically surround themselves
with other successful, and sometimes even more successful, people. That’s
exactly what you do yourself. The same applies in particular to your sales stars.
Do you remember public crime shows on TV? The viewers prick up their ears
even more when a five- or even six-digit reward is offered which lead to putting
the culprit behind bars. The “network of many” has been activated by this show
for decades to boost the public search for criminals. So make use of this principle
for your recruiting.
Conclusion You can not only significantly reduce your costs in recruiting, but
also achieve a much better job placement and an improved binding rate of new
employees, because: your workforce knows best of all—and much better than an
external headhunter—which values count in your company and who fits into the
team.
And One More Tip in the End Involve your best employees actively in the job
interviews. They know very well who fits you and are a good counterweight to
the already mentioned famous gut feeling, which can prove to be very deceptive.
4.5 Retaining the Best Salespeople in the Company
I have now described in detail various ways and methods how you can find the
best talents for your company. However, you can only speak of long-term success
if these newly won employees also stay in your company in the long term. That’s
exactly what it’s all about.
Most companies, whether more or less successful, attribute their entrepre-
neurial success to a low turnover rate, which is regularly measured. In most com-
panies, this is not sufficiently differentiated, as there is no distinction between
“desired” and “undesired” turnover. Throwing both into one pot is a gross mis-
take, because especially in sales transformations or the increasingly frequent
change processes, it is inevitable that companies consistently separate them-
selves from people who, despite all measures taken, show no improvement or
no increased performance potential. In addition, it makes a big difference in the
assessment of a manager’s skills whether employees who do not or barely show
any performance versus true high performers resign from him.
Both measures can easily be collected by your HR department and verified
together with the relevant specialist department:
• desired attrition
• undesired attrition
The first measure (“desired attrition”) refers to people who, as already mentioned,
do not deserve a place in the company. This may sound harsh at first, but remem-
ber: every salesperson employed in a company in Central Europe results in costs
of about 100,000 euros or in the United States around 100,000 dollars—year after
4.5 Retaining the Best Salespeople in the Company 103
year. It may also be that people leave of their own accord who are not high per-
formers or who constantly cause unrest in the team.
The second measure (“undesired attrition”) is obviously much more painful.
While an attrition rate of 10 to 15% is not a cause for concern in the first category,
your goal in the second category should be to reduce its value to zero or to do
everything in your power to bring someone back who wants to leave undesirably.
Because in this category we are dealing with real high performers, who are often
precisely those who “keep the place together”, and who are simply indispensable
to you.
It is incredibly important to be very close to the feeling level and motivation of
this group, because while their members usually perform two to three times that
of a regular employee, this can be significantly more during crises. I even go so
far as to recommend giving these people more freedom and more money during
crises, so that they do not leave the company under any circumstances. It repre-
sents a gigantic return on investment for you if you offer such a high performer
20 or 30% more salary when he or she is already performing double or triple that
of a regular employee.
It is also a good idea to conduct a survey to determine which employees you
would currently assign to the first or second category. This will give you a better
focus on who you should pay more attention to. Of course, the second category
includes the top performers and the raw diamonds that, with a little more atten-
tion from you, with training, coaching, etc., can become the best performers in
the future. So:
 Get rid of the idea of looking too one-sidedly at how low your turno-
ver is, because it is much more important that the rate of undesirable
turnover is extremely low.
An excellent Offence alone does not win a Game!

In my career as a consultant, I have met companies that already had a very good
sales organization or that we successfully transformed together over one to two
years. If sales are extremely solid, it is often the case that they are far ahead of
the performance of the customer-facing departments in terms of performance. To
counter this, as a business or sales manager, you need to go beyond your area of
influence and actively contribute to the creation of a similar performance culture
at the operational level.
Use the cross-departmental meetings for serious offers of help from your
side. You will probably often hear that one is either understaffed, working at full
capacity (especially in the crisis years since 2020) or simply cannot find good
people. The professional methods that you have learned in the previous pages can
be applied almost entirely to sales-related departments. However, you will have
to be particularly persistent here because some people will resist any help or criti-
cism from outside due to their egos. However, your persistence will pay off in
many ways. For example, you will massively reduce the risk of unwanted migra-
tion, which can be realized very quickly if the salespeople encounter operational
employees who are less performance-oriented and who may make mistakes that
alienate customers.
What would you do if, after months of hard work, you landed some great new
customers or expansion of existing business, but then find quickly that the busi-
ness is threatened because the operational level can not do what you have adver-
tised? There is nothing, and I emphasize nothing more frustrating for a salesman
than this scenario. Therefore, it is your duty to work for process improvements
in operational customer service. The following diagram provides an easy but
effective way in how you can rank your own efforts to achieve a true long-term
competitive edge: Reducing the undesired attrition rate towards zero and with
aformentioned methods filling vacancies with the best talent available as quickly
as possible.
4.5.1 Solving the Resource Problem at the Operational

Level
By the way, the resource problem often has less to do with the lack of staffing, as
is often assumed, but rather with a complete lack of differentiation in customer
service. Not for nothing, a business class passenger has been treated completely
differently for decades than an economy class passenger. And even here there is
still a distinction between premium economy and standard economy. How is it
with your A, B and C customers?
Consciously set yourself for a few days in the operational department and
go on a search for optimization. Paradoxically, a manager from another depart-
ment can often uncover potential much faster than the specialist department itself,
because often one can not see the forest for the trees. And feel free to invite the
customer service employees in your department.
In today’s world it is completely unnecessary and in most cases avoidable
that orders not arrive automatically (for example by e-mail) having then to be
entered manually into the operational system. Try to convince your customers to
use interfaces or connections to your booking system, so that orders are entered
directly and only once—the operational department will thank you. In addition, I
recommend that you carry out a general customer portfolio analysis in which you
critically carry out activity-based cost analyses (ABC analyses).
Due to the Pareto principle, it is the case that operational employees are 80%
of the time on only 20% of customers. Ideally, these are the 20% customers who
count as your biggest and most potential customers. However, reality looks com-
pletely different in most cases. I guarantee that you will quickly come across a
realistically feasible optimization potential.
Finding top-notch operational employees is, however, very difficult, but abso-
lutely necessary. So what is to be done when it is likely to take several months to
find a suitable candidate for the vacant position? The only effective remedy is to
work as efficiently as possible and to constantly pay attention to reducing one’s
own process costs. IT tools that measure these costs (for example, CargoWise)
also help. But you can also take a pragmatic approach earlier and completely out-
source certain activities to the customer. Prominent examples abound:
Examples
• DHL: The famous package boxes of DHL, with which the operational
activities of the counter staff were outsourced to the customers without
them really noticing, were sold to the customers as “new freedom” with
zero minutes waiting time. DHL knew only too well that the relevant per-
sonnel activities incur high costs, and was able, inter alia, to make the
package business much more profitable as a result.
• Motel One: The European hotel chain is a master of consistent business ori-
entation based on activity-based cost calculation. This starts already when
entering the hotel: As a hotel guest, you will have to approach the recep-
tion desk only once, namely only when checking in. Since mini bars in the
rooms are deliberately dispensed with (and also the room service), only the
room has to be paid, and this is done in advance. If the guest travels again,
he only has to insert the key card into a corresponding box after finally
leaving the room. This is advantageous for both sides: For the customer,
this procedure saves an enormous amount of time (we all know and hate
the long queues in the morning of the check-out, when it has to go fast),
and for the hotel, time-consuming cost allocations and individual invoicing
are eliminated. In addition, all drinks have to be paid for immediately at the
hotel bar; Charging them to the room bill is not possible (I tried it unsuc-
cessfully). In return, Motel One offers modern houses and extremely com-
petitive prices in above-average downtown locations. The chain has been
extremely successful with this business model for years. ◄
So get started! Optimizations are always possible!

And this is how it works: First of all, I would recommend that you playfully,
but quite seriously, call for a competition for the operational department and the
customer service, which can be sponsored from your sales budget, because the
improvements achieved benefit you and your team! And it is really a good idea to
mix the teams together so that both operational employees and salespeople work
together on the targeted improvements. The “wisdom of the many” also comes
into play here. But you can take it one step further and embed the search for opti-
mization potential in the incentive system so that the employees on the opera-
tional level are also involved. In this way, you gradually build up an excellence
environment and attract other departments. In your team speeches, you can of
course mention the examples mentioned above.
4.5.2 More Conflict Hotspots in Practice
Here are some more possible sources of frustration for top salespeople and how
you can deal with them.
Implementation of new Business

Nowadays, customers require a professional implementation approach when
awarding new business. More and more often, this implementation approach
is the deciding factor in the customer’s decision as to which logistics com-
pany receives the final contract for the new business and which does not. A
nice Gantt chart is no longer enough, there must already be a team that deals
with the required implementation. Due to the increased customer requirements,
the required implementation is also becoming more and more complex. It is
no longer just a matter of introducing the right people to each other, but it has
become a real showcase of how operational employees (because a bad implemen-
tation inevitably leads to bad service) move on the same level as sales.
The curse of many companies is that implementation is not taken seriously

enough, which is reflected in the absence of a corresponding department in
these companies (which partly generate more than 500 million euros in sales)!
In practice, it is usually the case that the salesperson has to take care of the
implementation himself. This may work, but the quality can never be guaranteed
that a corresponding department with the necessary know-how would achieve.
However, since a highly professional and methodological approach is required,
the creation of such a position or department is recommended.
This implementation department should be in close exchange with the Ten-
der Management. Former good Tender Managers are also good implementers in
practice because, due to their previous job, they are able to keep a lot of balls in
the air. Not to be forgotten is that the responsible person gains experience with
every successfully accompanied implementation and thus avoidable errors can be
increasingly reduced in the later course.
You may be of the opinion that a salesman’s work is only done when he has
implemented the acquired business. Theoretically you are right, but in practice
many salesmen are overwhelmed by this. In addition, it distracts them from other
important tasks. The reason for the overload is simply that project management
skills are required for an implementation, especially for a more complicated
business, and a lot of detailed work is necessary. However, these are skills that a
salesman does not need to shine in his daily work.
Conclusion Do yourself a favor and create a corresponding position for imple-

mentation. Your salesmen and especially the operational level will thank you for
it. Just the saved hours that are needed for the eternal discussions about the finger
pointing in case of a quick loss of business will quickly amortize the costs for
this position. Furthermore, customers explicitly demand more information about
the implementation approach just before awarding large contracts. Of course, it

makes a better impression if you can introduce new faces to this.
And do you still remember the excellent environment that a professional foot-
baller sets before signing a new contract anywhere? A salesperson finds such an
environment with you when you have your own highly qualified implementation
personnel. Do not underestimate the attractiveness that such a support function
brings with it! And last but not least, you will noticeably reduce the avoidable
customer attrition in the first twelve months after the business is concluded.
Attitude of Operational Employees in Loss-making Customer Shipments

Another point of contention is often an operational employees’ excessive involve-
ment in sales or commercial matters. Here is an example:
Example
A salesman wins a new airfreight business. He had to offer very aggressively,
and only because the customer has a very high volume of shipments, the busi-
ness is worth it with the rather low profit per shipment. Because: The actual
processing of the shipment succeeds significantly faster than with irregular busi-
ness, even if this is absolutely considered to generate more money per shipment.
Many operational employees are instructed to check the profit at shipment
level and to intervene if the result is correspondingly bad. So it can happen
that the operational employee wants to increase the rates unilaterally or is not
as enthusiastic about the processing because, from his point of view, the ship-
ment does not make sense. ◄
Prevent this by really providing all relevant information to the operational

employees and the operational management who will be responsible for your cus-
tomer! Only in this way can trust and a good form of cooperation arise.
Ambition of the People

We have devoted ourselves very extensively to personal ambitions. While the will
to belong to the best is priceless and must be given high priority in the course of
the application process, it is all the more important that you pay attention to the
fact that this intrinsic motivation level remains high. This is influenced by exter-
nal factors (even if the inner drive is somewhat stronger), such as the operational
and accompanying environment during implementation, whether promises or
commitments have been kept, the way in which management is dealt with, etc.
4.6 Which Skills will be Required in the Future Hybrid Sales 109
Just as people change in private relationships, people also change in professional

relationships.
Therefore, ask your team the most important question in this context: “What is
currently demotivating you?” And do this at regular intervals. By involving your
employees in the above-mentioned challenges (slow staffing, insufficient perfor-
mance of the customer service department, etc.), they will increasingly name spe-
cific topics and individual points to you. In this way, the creation of a long-term
positive performance culture finally succeeds, which no employee wants to miss
anymore.
4.6 Which Skills will be Required in the Future Hybrid

Sales
To conclude this chapter, I would like to take a brief look into the future. As you
may remember, I have already mentioned four basic values in Sect. 4.3 that are
absolutely essential for long-term outstanding sales success (this is true today and
will still be valid in 100 years):
1. Unconditional will to be among the best

2. Passion
3. Courage
4. Adaptability
Everything that can be digitized will be digitized at some point. This also applies
to sales activities. The Coronavirus pandemic has shown that challenges that
apparently cannot be mastered in a virtual way can indeed be coped with in this
way—regardless of whether it was possible to check how it would have happened
in an analog way. Seven- or eight-digit deals were concluded purely virtually,
and even I, with my extremely person-related and thus analog profession, have
been able to conclude various orders purely virtually or predominantly virtually.
It is quite clear that a good, trusting analog conversation can never be replaced by
a virtual dialogue or copied into the metaverse, “a virtual space in which users
move using avatars and in which they can influence and use virtual artifacts”
(Bendel 2022).
In the process, I have realized that while personal exchange is to be preferred
in case of doubt, the “analog” share by which a deal is concluded is massively
overestimated by many salespeople—all the more so during the current Corona-

virus pandemic. Just because you haven’t closed a big deal purely virtually so far
is no proof that it is not possible. It is only a mental limitation that the salesperson
has imposed on himself.
But salespeople have to adapt much faster to new or changing customer needs
and requirements and, above all, to changing framework conditions than their col-
leagues. In addition, a salesperson’s willingness to train in the use of new tech-
nologies such as artificial intelligence and new IT programs that make the sales
process even more efficient and faster is essential. Therefore, I consider cour-
age and adaptability to be particularly important for future applicants (regardless
of which position they are applying for). We humans are much more adaptable
than we think, and we have adapted very quickly to the “new normal” in times of
the Coronavirus pandemic: Companies have quickly switched their machines to
mask production, events have been held digitally, and so on. When we want to be,
we are one of the most adaptable species on our planet. That’s exactly what you
should keep in mind when it comes to sales.
But how can you trigger or train this adaptability? The answer: By putting
more pressure on sales to sell new and more innovative products to customers
and incentivizing them significantly. Or by giving sales a very big challenge that
is impossible to master with the existing systems, but only with a radical rethink.
Furthermore, cross-functional skills are more in demand than ever, and that’s
where communication comes in.
As more and more takes place on a global level—virtually and above all
in English—the communicative skills of salespeople must be continuously
improved. The problem is well known to us all: The older you get, the more dif-
ficult it is to improve your own communication skills. Nevertheless, our voice
and our appearance, that is how we appear to other people, are by far the most
important instruments to uncover hidden customer needs. Coupled with power-
ful customer data systems, new products can be created before the competition.
Few salespeople are aware of this. You can also make a contribution by offering
appropriate training and deliberately requiring the achievement of the challenges
described above.
References 111
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Bendel O (2022) Metaverse. Definition: Was ist „Metaverse“? Published by Gabler
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bericht.pdf. Last access on 19th February 2022.
Cross-Selling and Hidden Customer
Needs—The Sales Turbo 5
 95% of all sales organizations fail in the adaptation of cross-selling

strategies and their implementation. Cross-selling has many advan-
tages, and not least, a cross-selling oriented organization increases
customer loyalty and makes your company much more innovative.
How this demanding transformation of your sales into a long-term
successful cross-selling organization succeeds, I explain step by step
in this chapter. On the one hand, we go into the concept and on the
other hand into the implementation phase. We also deal intensively
with customer needs and how to anticipate them. Because only if your
company manages this faster than your competitors, will you always
stay one step.
5.1 How a Dream Becomes Reality
Imagine you could increase sales by 20 to 30% from your existing customer base,
and achieve this at almost negligible acquisition costs. Too good to be true?
Hardly any other topic is given such a large strategic importance in sales
organizations, and yet it is usually implemented quite badly: We are talking about
cross-selling (short: X-Selling). Cross-selling means that two salespeople who
are assigned to different divisions introduce each other to an existing customer in
order to increase sales through the sale of products from the other division.
This is one of the safest and at the same time most favorable ways to increase
sales to existing customers—with extremely low acquisition costs and dispro-
portionately high probability of closing. The reason for this is that the customer

https://doi.org/10.1007/978-3-658-39756-2_5
114 5 Cross-Selling and Hidden Customer Needs—The Sales Turbo
already has an existing relationship with your company and does not have to
build trust (with the associated costs).
Unfortunately, reality often looks different. While one may agree on certain
sales or volume targets, create- a common pipeline and then get started, disillusion-
ment can quickly follow, when the desired success does not materialize and the
joint selling is characterized more by mistrust or insufficient commitment on the
part of the sales department than anything else. Does that sound familiar to you?
In the following, I set out three factors that will decide whether X-Selling
might work for you:
5.1.1 Creating a Culture of Togetherness
Many companies initially invest a lot of time in creating standardized process

descriptions in order to document the cross-selling process and define rules for it
(for example, who retains customer sovereignty through time, how the procedure
is to be carried out with regard to bonus payments generated from the jointly gen-
erated business, etc.), and in doing so they overlook something essential: namely,
to initiate the necessary behavioral changes to create and anchor a culture in the
sales organization that makes cross-selling possible, successful and above all sus-
tainable cross-selling in the first place.
If your company has different divisions or departments that are assigned to
different teams and only sell this one particular product, it will inevitably be the
case that one team generates more sales than the other. There can be many rea-
sons for this: a better market position, a larger sales team, a better performance
promise, a better reputation, etc. The members of the more successful sales-gen-
erating team will hardly feel obliged to help the other team. Why should they, it
would only mean more effort for them.
5.1.2 Making Employees Part of the Solution
The task must be clearly and unambiguously specified from above and its execu-
tion supported. So this is about the what. Unfortunately, however, the how is often
also determined from above, and that is the cardinal error. It is absolutely essen-
tial, first of all, to clarify in a joint workshop what advantages the two sides will
derive respectively from the changed procedure.
Let the how be defined later by the employees affected by the measure.
In most cases, they can assess much better what works and what does not in
5.2 The Importance of Hidden Customer Needs 115
‑cooperation, because they already know each other well. The more successful
sales-generating team, for example, can benefit from the weaker team by surpris-
ing them with clever new product ideas. This can make the already large cus-
tomer even more diversified and above all reduce the dependence on one sector.
Covid-19 has made it abundantly clear to us how important it is not to be depend-
ent on one sector and thus to achieve increased resilience.
In this phase, it is especially important to bring skeptical employees on board
as early as possible. Set a clear goal and connect it to clear measures! If certain
employees continue to be recalcitrant, the fundamental question arises as to whether
they would rather pursue their own agenda rather than that of your company, and to
check whether they are compatible with your company culture or simply obsolete.
5.1.3 Regularly Review and Update the Cross-Selling

Process
Think of your new cross-selling process as an MVP (Minimum Viable Product).

If you have thought it through to at least 70 to 80%, just start. But always keep in
mind:
 Perfectionism is a weakness, not a strength!
You can create a version 1.0, 2.0, 3.0, etc. of the cross-selling process, similar to
how software or phone manufacturers do. The more experience you gain and the
more mistakes you make and learn from them, the better and more robust your
process will be. It is only important that you continuously improve this process
and that there are certain people—from both sales departments—who monitor it.
In the following section, we will deal intensively with how a successful cross-
selling organization can also be implemented for you. For this we rely on experi-
ences from dozens of cross-selling projects—by the way also from other industries.
5.2 The Importance of Hidden Customer Needs
We first distinguish between three types of needs:
1. existing needs
2. anticipatory needs
3. new needs created by new products/innovation
While existing needs are relatively easy to satisfy and bring no competitive
advantage, I would like to introduce a new approach to anticipate needs faster and
above all more thoroughly: by systematic cross-selling.
Anticipatory needs are, simply put, the differences between what a customer
wants (and also expresses), and what he actually needs, but doesn’t know or
doesn’t express. This only works if a certain level of trust is given and the cus-
tomer perceives an adequate competence on the part of the service provider.
In addition, many customers have only a very rudimentary understanding of
what you as a service provider can do. This is because your customer only associ-
ates you with one product—and recommends you to others accordingly—if you
have only successfully sold one or two products in recent years. The problem
with this is that the customer denies you the ability to “do” more than just this
one product or this one service. The paradox is that it becomes more and more
difficult to convince the customer of further product purchases in other categories
the longer he is your customer. So you can’t start cross-selling early enough!
Example
You do a medium seven-figure annual turnover with a customer, mainly in
the processing of an international spare parts business. This consists of thou-
sands of airfreight shipments and several hundred sea freight shipments every
year. Now you know exactly that this customer will re-tender an eight-figure
contract logistics business every three to four years. Your company has a
very strong contract logistics division, which, however, also includes its own
sales organization as an independent business unit. Your customer may be
aware of this, but he primarily sees you as an expert in the international spare
parts business. Since the next tender will take place soon, it is time for you
to travel together with a contract logistics expert to your customer and talk
about this business. If you succeed, in addition to the obvious advantages of
higher sales and increased profits for the other business unit, you will have
the immense advantage that it will gain completely new insights into the busi-
ness: What exactly happens to the urgently needed spare parts shipments once
they have arrived in the warehouse? How long does it take until they leave
the warehouse again in the direction of the end customer? You will quickly
come across optimization potential. If you address this potential proactively
with your customer, you will recommend yourself as almost irreplaceable in
the long term, because you are faster and better than he is in anticipating hid-
den needs in addition to the possible optimizations, and you can further tailor
the service to his needs. ◄
5.2 The Importance of Hidden Customer Needs 117
There are dozens of such examples, and it is amazing and at the same time chill-
ing how little of a priority cross-selling is given in practice.
Basically, successful cross-selling depends on the following factors, which we
will examine in more detail (see Fig. 5.1):
1. The basic understanding of the customer needs of the other business unit
2. A high intrinsic motivation of the sales staff of both divisions
3. A matching and dynamic incentive system that disproportionately rewards
cross-selling success for both sets of salespeople in both tangible and intangi-
ble
4. A serious, passionate desire of management and sales to promote cross-selling
and to enforce it against resistance
SYSTEMIC CROSS-SELLING
4. Business and sales

management seriously
LONG-TERM
promotes cross-selling
3. Dynamic incenve system

for cross-selling products
2. Intrinsic movaon of the

SHORT-TERM
sales force
1. Understanding of customer
needs
Fig. 5.1  Systemic cross-selling

At this point it should be noted that cross-selling must not be mixed up with
upselling but must be sharply distinguished from it! Upselling is much less team-
oriented and is usually easier to accomplish than cross-selling. When upselling,
a salesperson sells the entire product range of his company to the customer, thus
gradually increasing both sales and product volume. This can be done with the
help of internal experts, for example with an IT solution product. It is important
that when upselling, a salesperson or a team from the same business unit makes
the sale. The sale is not made by two salespeople, each from a different business
unit. If this is the case, we speak, as already mentioned, of cross-selling. Unfortu-
nately, up- and cross-selling are still often confused with each other.
For this reason, the first step towards a systemic cross-selling organization is
to develop a generally accepted definition of the term “cross-selling”. If this term
has been too negatively associated in the past (for example, by a series of failed
cross-selling initiatives), you can simply rename it. For example, one of my cus-
tomers changed it to “system selling”, which allowed the team to make a fresh
mental start.
It is quite possible that your company only has one sales organization that
works across the various business units. For example, if your commercial organi-
zation functions as an overarching corporate internal unit. If that is the case—
congratulations! You are further than many other companies because they usually
have a separate sales organization for each individual business unit.
If entirely different product categories are sold within the same distribution
organization, the cross-selling approach is also the key to significantly higher
organic growth and, of course, the uncovering of hidden customer needs. One of
my projects from last year is given as an example here:
Example
The engineering company employs a total of 300 salespeople worldwide, but
only 20 of them in Germany. These are in turn assigned to two separate busi-
ness units: on the one hand the electrical engineering unit (“A”), on the other
hand the drive unit (“B”).
The sales team of business unit “A” offers almost exclusively individual,
tailor-made solutions with average sales cycles of nine to twelve months, while
the sales team of business unit “B” offers mainly finished products. Their
sales cycle is significantly shorter and is only two to four months. The manag-
ing director of unit “A” was strongly influenced by meritocracy, the managing
director of unit “B” was strongly influenced by autocracy. Both business units
had repeatedly tried to successfully implement cross-selling in the past, but this
always failed and the fronts hardened from time to time. However, it was clear
5.3 Determination of the Cross-Selling Potential 119
to all those involved that every customer who buys drive technology also has a
need for electrical components. You can imagine that the task of developing a
cross-selling mechanism that enables sales to grow by a double-digit percent-
age was not an easy one. ◄
5.3 Determination of the Cross-Selling Potential
The cross-selling potential of your sales organization is much greater than you
think! At the beginning I compared the potential with the invisible mass of an
iceberg (see Fig. 5.2).
Various studies come to the conclusion that a sales organization can increase
its sales by a factor of 5 or 10 on its own if it consistently pursues a cross-selling
approach (Schmitz et al. 2014). In order to grow so strongly on its own, start with
the following simple current state analysis:
Analyze the sales of the 20 largest customers of the respective business unit.
Next, find out what percentage of the maximum possible total customer sales you
have already acquired. We divide the total customer sales as follows:
• Category A: Total customer sales generated with products from your business
unit (= upselling)
• Category B: Total customer sales generated with products from the other busi-
ness unit (= cross-selling)
You will notice that you can grow organically by a multiple factor on average.
However, be realistic in your efforts and set the goal to complete 25% of the sales
that would actually be possible in the next 18 months in category B. Of course,
you should also set the goal to continue growing in category A, not least because
this is the daily task of sales (regardless of cross-selling).
You need an initial realistic but ambitious goal. If you don’t have that and
there is no corresponding system behind it, you will achieve 0 to max. 5% sales
growth. With the system that I will explain to you below, you can realistically
achieve 25 to 35% sales growth. This is the average value of the cross-selling pro-
jects that I am responsible for (see Fig. 5.3).
The biggest advantages of cross-selling are obvious (see Fig. 5.4):
• higher return on sales for the sales organization

• improvement of the “customer retention rate”
• better basis for a change in culture
• increased ability to innovate
Fig. 5.2  Metaphor for cross-selling potential. (From Tavani, Romolo 2022: Iceberg in the
Arctic Ocean floating; with kind permission from © iStock by Getty Images. All Rights
Reserved)
Let me explain these points briefly: If the sales organization generates 25 to 35%
more business on its own, it will of course be much more profitable. The so-called
Cost-to-Company factor, which states the ratio of one’s own costs to gross rev-
enue generated, not only increases individually, but also as a team. This gives
you additional resources that you can use for new positions, training initiatives or
other purposes.
The “customer retention rate” is gaining in importance in times of increasing
competitive pressure (see Chap. 1, where I have addressed the strongly increasing
competitive pressure from the shipping companies). Cross-selling is a powerful
lever in your hand: It becomes much more difficult for your customer to switch
to the competition, because he will not get the “cross-selling offer” and the added
5.3 Determination of the Cross-Selling Potential 121
ORGANIC GROWTH INCREASES THROUGH CROSS-SELLING
With an exisng
If everything remains unchanged systemic cross-selling
sales organizaon
REVENUE INCREASE ADDITIONAL

REVENUE
Fig. 5.3  Organic growth through cross-selling
value of your competitor so quickly. And even if he were to obtain one of the two
products you have sold so far from another provider, you would still have a foot
in the door with the second product you sell him.
The third point concerns the change in culture: The ability of companies and
in particular sales to work with more agility, faster and more team-oriented on
innovative solutions is becoming increasingly important. A cross-selling transfor-
mation is a very valuable opportunity to implement this approach. Without the
right culture within the sales organization, any cross-selling initiative is doomed
to failure (we will focus on this point in the case studies).
If the change in culture within the sales organization succeeds in creating a
strong, value-driven organization, there is a high probability that the other depart-
ments will be carried along by the “contagion effect”. In this way, sales can set in
motion a change in culture throughout the company.
The fourth point, the increased ability to innovate, follows from what has
just been described: A company’s ability to innovate depends heavily on how
customer-oriented the company is. Cross-selling is extremely customer-oriented,
CROSS-SELLING ADVANTAGES
Higher
"Return on Sales"
of the sales-
organizaon Improve
"customer-
retenon rate"
Basis for
cultural change
Higher
innovaon-
capability
Fig. 5.4  Cross-Selling advantages
because one can only be successful if one really deals in detail with the needs
of the respective customers of the other business unit. In addition, there is the
requirement to acquire new knowledge about unknown customer needs.
By the way, I can guarantee that cross-selling teams will bring new product
ideas to the table on their own, which have arisen in conversation with the cus-
tomer or have been inspired by it. If there is then an effective feedback to the
research and development department, the innovation capacity will certainly
increase.
With all four advantages of cross-selling, the financial side effect will almost
take care of itself, namely a significantly higher gross revenue growth with simul-
taneously decreasing sales costs. This effect is illustrated in Fig. 5.5.
The field at the bottom right is the target to be achieved. Depending on the size
and depending on the conditions of the cross-selling initiative, this takes between
twelve and 24 months.
5.3 Determination of the Cross-Selling Potential 123
One possible starting point for the company in question is that, in fact, no
efforts have been made to date to cross-sell (let alone any systematic approach).
This does not initially create any additional costs for sales; but of course no addi-
tional gross profit can be generated either. I have referred to this starting position
as a “missed opportunity” in Fig. 5.5. There is certainly enough potential for cus-
tomer cross-selling, but it is not being used!
CROSS-SELLING PERFORMANCE CHART
NEGATIVE POSITIVE BUT

Costs of the sales organizaon
HIGH INVESTMENT/ POTENTIAL FOR

CASH BURNER IMPROVEMENT
PEAK
WASTED
PERFORMANCE
LOW OPPORTUNITY
BREAKTHROUGH
LOW HIGH
Profit growth
Fig. 5.5  Cross-Selling Performance Chart

In the second possible starting point, there are indeed efforts to cross-sell, for
example through joint customer visits. However, due to the poor or incorrectly
set up cross-selling process, high costs arise for sales. In short: a lot of actionism
instead of concerted, consistent action. In such a case, we speak of a negative
investment, that is, a cash burner, which quickly leads to frustration on the part
of all parties involved, contributes little to management support and increasingly
hardens resistance. As a result, it is all the more difficult to successfully carry out
a cross-selling campaign in the future.
Many of my customers, with whom I carry out cross-selling projects, quickly
achieve the first success thanks to an implementation mechanism Objectives Key
Results (knows as OKRs) thought up by the salespeople under my guidance and
reach the top right field within six to twelve months. Certain key elements of
this mechanism are described in the following “how-to” guide, especially from
Sect. 5.4.2. onwards. Success also occurs within the team that uses the adapted
bonus system, and a noticeably better understanding of the products and customer
needs of the other business unit ensures that the salespeople are intrinsically moti-
vated to participate.
After that, it is necessary to become more efficient in cross-selling and to
continuously improve the processes in order to reach the bottom right field after
about twelve to eighteen months: a well-oiled and extremely powerful cross-sell-
ing machine will then have become a reality.
5.4 Practical Guide: Creating a Systemic Cross-Selling

Organization
Before we turn to the admittedly quite difficult task of cross-selling transforma-

tion, let’s first look at typical cross-selling killers that lead to failures in practice.
5.4.1 The Five Biggest Cross-Selling Killers and How

to Avoid Them
Interestingly, the vast majority of cross-selling initiatives do not fail due to a lack
of willingness on the part of the relevant team, but of management. Below I pre-
sent to you the five most common reasons that are responsible for the failure of
cross-selling initiatives.
5.4 Practical Guide: Creating a Systemic Cross-Selling Organization 125
Cross-Selling-Killer Number 1: Goal Conflicts between Business Units

It is especially important when cross-selling to know the goals and motivation of
the other business unit very well. If this knowledge is lacking, misunderstandings
or prejudices can quickly arise. For example, the declared goal of one business
unit may be to grow in defined markets. The motivation behind this may be that
new salespeople have been brought on board to achieve this goal. However, the
leader of the other business unit may think that his colleague can only achieve
this through cross-selling, because he has already successfully played these focus
markets with his unit, which his colleague has not dealt with so far. Same goal,
different approach.
Cross-Selling-Killer Number 2: Leadership Style of the Business Unit Leader

In principle, there are two types of leadership styles under which 99% of all
leaders fall: the autocratic and the meritocratic leadership style (see Sect. 3.1).
I explain the topic of sales leadership and the two leadership styles in detail in
Chap. 3. Here is a brief description of the two styles once again:
Meritocratic versus Autocratic Leadership Style

A meritocratic manager puts the team’s interests above his own interests
and sees it as his most important task to make every employee entrusted to
him as successful as possible. He ensures the necessary freedom and crea-
tivity of his employees.
An autocratic manager is the exact opposite. He has great difficulty del-
egating tasks and trusting his employees, and often keeps them on a very
short leash. Independent thinking is allowed as long as it serves the inter-
ests of the autocrat.
For long-term successful cross-selling, a meritocratic leadership style is essential.

So if the head of your business unit has a very strongly autocratic leadership style,
this will often restrict the independent creative work of the salespeople with their
colleagues that is required for cross-selling. In such a case, I would advise you
to choose another business unit for the cross-selling transformation and to leave
that one, no matter how great the potential may be, to the side. Even science is of
the opinion that a transformative leadership style is significantly more likely to be
successful in cross-selling campaigns than a transactional one (see Schmitz et al.
2014). External support in such an undertaking can help break down certain block-
ing e attitudes more quickly because an external person can lead the project con-
sistently and without any prior history in a politically neutral manner. And believe
me, this is really hard work with an autocratic head of a business unit. The follow-
ing example was exactly such a situation: I was commissioned by an extremely
competent, through and through meritocratic leader with the cross-selling project
and came across the leader of the other business unit with an entirely opposite
character, namely an old-school autocratic manager, who at the beginning of the
process neither contributed any of his own ideas nor allowed any independent work
by his people, until I finally convinced him. This meant that in certain situations I
had to take a hard and resolute stand against his resisting behavior because he con-
stantly tried to influence his people in their search for ideas and creativity.
Cross-Selling Killer Number 3: Different Sales Volumes of Business Units

You will inevitably find a disparity in both the team and sales volume of the busi-
ness units that jointly engage in cross-selling. This is less of a problem for two meri-
tocratic managers. However, if your colleague behaves in an autocratic manner as in
the example given above, objections will quickly be raised such as: “I have to take
care of my (much larger) unit first, so show me what I can gain from using my own
resources as well as those of my team.” This attitude is extremely short-sighted, not
only because the view “I am more important than the other because I am bigger”
is outdated, but also because existing large customers have further growth potential
through cross-selling into the other business unit. This problem must be addressed
consistently and from the very beginning of the cross-selling transformation, in full
view of the team, so that no one thinks that one sales team needs the project more
than the other. Salespeople tend to imitate the behavior of their leaders!
By populating the core team equally with representatives of both teams and dis-
tributing the tasks evenly, you avoid any imbalance and make it clear that each
team is of equal importance.
Cross-Selling-Killer Number 4: Lack of Reliability during the Project

Above all, enthusiastic managers and salespeople are very good at starting things
(and indeed doing so in a structured and professional way), but they quickly let
their efforts drop when the initial euphoria has passed and day-to-day business
with its (often only apparent) priorities gets in the way.
Pay close attention to the degree of reliability shown by all participants during
the project duration, in particular with regard to the agreements made, such as the
estimated dates and tasks to be completed. Of course, it can always happen that
something comes up, but in such a case the team must be informed by the person
concerned in advance and proactively, so that the pending tasks can be distributed
differently.
In such a project as the implementation of the cross-selling approach, the
wheat is quickly separated from the chaff, that is, the unreliable from the reliable
colleagues. This affects managers and salespeople alike. I have often observed
that salespeople work much more reliably in the project than managers, who are
supposed to be role models.
If you observe unreliable behavior, address it immediately, preferably in front
of the group. The resulting embarrassment has the beneficial effect that the per-
son concerned does not want to be humiliated in front of the group again and
therefore reflects their behavior thoroughly after this unpleasant experience. Good
medicine rarely tastes good, but it works all the better!
You may be wondering why I am emphasizing this point. I am doing this
because routine sets in at some point during every project and because of lack
of consistency and reliability, momentum is lost. This is also one of the reasons
why most projects take longer than originally planned. So be the top “reliability
watchman”. It will pay off for you.
Cross-Selling-Killer Number 5: Ego-Power Games and Unsolicited Influence

Now we come to the Cross-Selling-Killer par excellence, which is related to the
point “Leadership style of the business unit leader” in that autocratic leaders like
to bring up the topic of corporate policy within the project. This is usually done
out of a need for recognition or a need to satisfy one’s own ego. Quickly, the idea
of another is sold as one’s own or influence is taken on certain areas in the project
for which the sponsor (i.e. the leader of the business unit) is not responsible. An
example from practice:
Example
I remember well the first jour fixe, after the project had been divided into indi-
vidual parts (called “MECE Buckets”, more on that later) and the responsibilities
had been assigned. Each bucket team had to present how it wanted to structure
the project work in the following weeks and what it wanted to focus on. With one
bucket team it was about the product understanding and the development of a
training concept, which was occupied by one salesperson of both business units.
After the bucket leader had started with the presentation, the autocratically
inclined sponsor/leader of the other business unit immediately threw in that
the subproject had to be structured in this way and not otherwise, because the
training concept would not work otherwise. I observed the proceedings for
a while because I wanted to know whether he would be contradicted by the

bucket team, as he could not give any good reasons for his approach. When
no contradiction arose, I intervened and reminded him (in front of the whole
team) that, firstly, mistakes are allowed and, secondly, we do not judge the
procedure, but rather only the result (if it ever comes) and thereafter we can
give constructive criticism. In addition, his way of proceeding would inhibit
creative thoughts and have a negative effect on the motivation of the team.
After initial grumbling, he finally agreed with me. You can see that you also
must actively deal with uncomfortable situations; this should be done as early
as possible so that the participants really feel that they are allowed to think and
work freely.
The big problem with more autocratically led business units is that the
independent creative thinking of employees is barely desired if at all, so that,
even if the corresponding freedoms are granted, hardly any relevant results can
be expected. The effect then looks like this in practice:
When I had a follow-up conversation with the aforementioned bucket team,
the sales representative of the autocratically run business unit pointed out sev-
eral times that certain ideas had to be discussed with the leader of his busi-
ness unit in advance. I explained to him several times that, with this project,
people from the front line would be deliberately involved who, regardless of
what one considered to be allowed, others were allowed to express ideas in
order to ensure the best result for the project. After a while, the free creative
activity worked better. The following observation was also interesting: When
the aforementioned leader of the business unit was unable to participate in a
regular meeting due to illness, the bucket leader flourished! ◄
You can probably imagine what happens behind the scenes in this business unit
on a daily basis if the relevant leader already shows such behavior during the pro-
ject work.
In the example described, the bucket leader became active immediately. But
that is not the case with all employees. With some, it is not enough to remove the
cage. You may have to encourage them several times to spread their wings and
take to the air.
Finally, I would like to point out a power game that is often experienced and
observed especially at the beginning of cross-selling projects on the way to suc-
cessful cross-selling with this last obstacle: the deliberate withholding of impor-
tant information.
Example
In one of my projects, it was about comparing the already existing bonus
systems with each other in order to define a better system that would fit both
business units well. While I received all the necessary information from one
(meritocratically led) business unit (of course with blackened names), the
information output from the other unit dragged on for several months. First it
was said that there was no relevant information, then I was told that for data
protection reasons, I could not receive a copy in which the names of the par-
ticipants had been made unrecognizable. Finally I received the information I
needed from the global CEO. I need not point out that the relevant business
unit was autocratically led.
This counterproductive behavior was an expression of a lack of self-confi-
dence and a completely outdated self-understanding of an executive. It is simi-
lar to a doctor’s visit: I cannot expect my doctor to relieve my shoulder pain if
I refuse to make my shoulder physically available for an examination. ◄
5.4.2 How to Implement Cross-Selling Based on Six

Central Success Criteria
Let us now come to how you can specifically turn your sales organization into a
strong cross-selling organization. First, I would like to ask you the following ques-
tion: How much of an airplane’s fuel do you think is consumed by the time it
reaches its cruising altitude shortly after takeoff? It is—depending on the type of
aircraft—between 50 and 70%! It is quite similar with the introduction of cross-
selling: Just at the beginning it is necessary to overcome very large resistance and
to resist forces that want to preserve or restore the original state. The greatest resist-
ance to the implementation of difficult projects (such as cross-selling) can be over-
come by knowing the intrinsic motivation and values of the key players on the team
very precisely. In practice, this is often never considered let alone being addressed.
This guide is based on a consulting project I recently carried out for a machine
engineering company. This company, which you already know from Sect. 5.2,
consists of two divisions in Germany: Division A deals with electrical engineer-
ing, Division B with drive technology. Division A generates sales of around
20 million euros per year, while Division B generates sales of around 90 million
euros per year. The company has started several cross-selling efforts of both divi-
sions in the past five years, all of which have failed. The result: a certain amount
of frustration among all those involved and a considerable amount of skepticism
COMPARISON OF BUSINESS UNITS
Category Division A Division B
Product group Electrical engineering Mechanical Drive technology
Turnover p.a. Eur 20 m Eur 90 m
sales force 6 FTE 18 FTE
Duration sales cycle 9-12 months 2-4 months
Sales reports to Division Manager Division Manager
Main customer industries Textile, Recycling, Logistics Wind power, recycling
Fig. 5.6  Comparison of Business Units
towards the idea of taking the topic up again (which is unfortunately often the
situation in companies, possibly also in yours). Figure 5.6 shows a comparison of
the two business units.
You can see in this table that there are significant differences in terms of sales
and sales cycle duration. At first glance, one might assume that Division A needs
this initiative more than Division B and should therefore invest more resources in
the project. However, this is an error in thinking and a typical trap that most com-
panies quickly fall into.
In this example, it is the case that the growth of Division B has been stagnant
for years, while Division A is growing dynamically. Division B needs new growth
opportunities, especially in terms of profitability, while Division A needs to con-
tinue to grow in terms of sales in order to generate economies of scale.
(1) Target Image Development and Project Phases

First, as a division manager or BU sales manager, you need to develop a target
image together with your business unit colleague that specifically describes the
state of the desired cross-selling organization. If you are completely at the begin-
ning with regard to cross-selling, it is very advisable to divide a project into two
phases, namely into the
• Concept phase and the

• Implementation phase.
In the concept phase, the foundation for the eventual cross-selling sales organi-
zation is first laid: What is the definition of cross-selling? What are the neces-
sary requirements for a successful scaling, etc.? In the implementation phase, the
implementation of the agreed measures is then started on a certain date.
Let’s now start with the first steps of the concept phase. First, ask yourself the
following questions:
• What is our goal with cross-selling?

• Why do we believe that cross-selling will lead us to our goal—and better than
other initiatives?
• How do we recognize and notice that we have achieved the goal?
Please note the following point: Be careful not to formulate numbers as goals!
It is much too early for that, especially since you first have to deal conceptually
with the foundation of a cross-selling organization. It is extremely important that
you think everything through thoroughly with your co-pilot, who sits in the same
plane next to you at the start, so that you can later speak the same language in
front of your teams. In the case at hand, I was commissioned by a business unit
manager who wanted to “force” his counterpart, the other business unit man-
ager, through the engagement of me towards his “own luck”, because he would
have never worked with an external expert of his own accord. My client was well
aware that the situation was so difficult that it could simply not be solved without
external help. So at first I concentrated on providing a real and honest alignment
of interests between the two business unit managers, which then took a little more
time than originally planned.
As I said, ideally you do the preparation work with your sales or management
colleague beforehand. This consists in the development of the target image already
mentioned and the results criteria by means of which you can determine whether
the target has actually been achieved. The following questions will help you:
Questions for Developing Target Image and Result Criteria
1. Goals = Impact
• What results do you want to achieve here and why?
• How would your organization change through this project?
2. Metrics/KPIs = Measures of Progress
• How will you know when you have achieved your goal?
• Have you already taken metrics/measures that you want to apply?
Once you have thought through the goals and results criteria, it is
important to think about what value it all has (the purpose). The value can
include tangible points (for example, more sales, more profit, less depend-
ence on large customers, etc.), but also intangible ones (for example, a
improved reputation within the corporate group, less undesired attrition,
etc.).
3. Value = Result
• How will the realization of your goals affect your final result?
• What are the material effects after achieving the goal for your organ-
ization?
• What will these results mean for your organization?
• Who in your organization has the most benefit from achieving the
goal?
For working out these three topics, you will need one or two mini-workshops
with your colleague. By all means involve an external sparring partner here who
can help you in a politically neutral way to thoughtfully consider these points.
It is important that you distinguish between impact, outcome, output and input
here so that you can clearly delimit the three topics from each other. The impact
is the final state, i.e. what results from the objectives, the outcome and the output
result from the indicators, and the added value is the output from the project activi-
ties. The indicators are very important because they embody both the compass
and the common thread running through the ongoing project. Now it is a matter of
working through the indicators at the highest possible speed. If they are all accom-
plished, the project is finished.
The indicators can be determined both objectively and subjectively. An objec-
tive indicator in a project to increase cross-selling sales is simply the meas-
urement of the monthly hit rate, i.e. the probability of conclusion. From an
improvement in this indicator higher sales automatically follow. A subjective
indicator is, for example, the observation of the management as to whether an
increased intrinsic motivation for the cross-selling measures in the sales team can
be observed (and manifests itself, for example, in more joint customer meetings).
The following example in Fig. 5.7 illustrates how you can distinguish between
impact, outcome, output, and input in relation to the “input” of a sales training.
Let’s get back to our case study with the machine engineering company:
Together with the sponsor, I had agreed on the following objectives, success crite-
ria, and value added:
1. Goals
• Creating a strategy-action plan with concrete, time-limited measures and
actions (short-/medium-/long-term) to maximize additional sales revenue in
selected industries through cross-selling
• Ensuring the consent of all sales and business development employees who
are involved in the implementation to successfully implement the plan and
all initiatives that arise from Goal A, combined with a mechanism to suc-
cessfully cross-sell in the long term
EFFICACY MEASUREMENT EXAMPLE OF SALES TRAINING
Category How this is measured Frequency
Input Sales Training Regular frequency
Output Sales competence increases, Monthly measurement

e.g. through the adopon
and applicaon of new
techniques and tools.
Outcome "Hit Rate" increases / Monthly measurement

Number of A-Level Opps / or quarterly measurement
Quality of contacts with
decision-makers increases
Impact Sales increase Measurable in 6 months
Fig. 5.7  Efficacy Measurement Example of a Sales Training

2. Success criteria (selection)
• Fortnightly/monthly: All internal project responsible persons, consisting of
the sales employees of both departments, show a strong sense of responsi-
bility for this project through active support in the project meetings.
• The strategy and concept are carried by all affected sales employees and
are characterized by relevant input from the sales team.
• Personal protocol: A tailor-made, dynamic incentive system for cross-
selling efforts has been created and finds the approval of all affected sales
employees.
• Personal protocol: Management can observe a strongly increased intrinsic
motivation of all affected sales employees who support the cross-selling
efforts.
3. Value (selection)
• Future additional sales growth through uncovering of unused potential
• Efficiency gains through sharper cross-selling processes
• Increased motivation and resilience of the team through this new project
• Improvement of the reputation of the business unit within the corporate
group
• Improving the visibility in the market in order to attract better talent in the
future
• Better customer relationships through the introduction of additional prod-
ucts and as a result a lower rate of attrition
• Reduction of the management’s time expenditure for the settlement of con-
flicts which have arisen in the past due to inefficient cross-selling efforts
In the first three months of the project, it is important that you exchange progress
of the project with your co-sponsor in the form of a regular meeting every seven
to 14 days. The basis for this are the success criteria and the question of where
you have made progress and what needs to be done in the next two weeks up to
the next regular meeting in order to make further progress. After the first three
months, you can increase the intervals for the regular meetings to 14 to 21 days.
In order to choose the right focus for the core team composition and the
appropriate thematic focus in the next step, it is recommended to conduct a short
survey of your team on the topic of cross-selling. Either let your questions be
answered anonymously in an online survey, or—and this is my clear recommen-
dation—conduct personal interviews with approximately ten people from differ-
ent hierarchy levels of both business units. The duration of the survey should not
exceed 30 to 40 min per person.
Here are some examples of questions I ask in the context of my projects:
• What are the two to three most important sales-relevant topics and challenges
you will be dealing with in your role in the next few years?
• Please give us a rough description of the structure of your sales organization:
number of sales employees, functions, employees with direct customer respon-
sibility and in the back office, number of sales managers.
• How many full-time employees are involved in developing new businesses in
your organization? How many full-time employees are involved in managing
existing businesses?
• Which CRM system does your company use, and how highly do you rate the
quality of the current CRM customer data on a scale of 1 to 10 (1 = very low,
10 = very high)? If your number is between 1 and 7: Which important data is
missing or could be improved in your opinion?
• How highly do you rate the importance of your department and its percentage
share of sales in the following areas on a scale of 1 to 10 (1 = unimportant, 10
= extremely important)?
– Growth of existing business in 2023
– Development of new businesses in 2023
• What is your willingness to enable cross-selling, that is, to grant access to
your customer data and contact base to the other department? Where do you
see the biggest hurdles in developing cross-departmental or cross-border
cross-selling in Germany? If your willingness is low: Why is that so, and what
would have to change to positively influence your willingness (for example,
regular cross-departmental meetings, incentives, etc.)?
• What can you do personally in the future to enable cross-selling across both
business areas? Can you name any additional meaningful initiatives or require-
ments in the German organization to make this possible (for example, regular
exchange, formation of a steering committee, etc.)?
• What monetary potential (profit or sales growth) do you see when your area
begins cross-selling?
• How much gross profit and sales are generated by cross-selling today, and
with which business unit have you had the best experience with mutual sales?
• Are there currently any financial incentives for you or your sales team to sell
products from the other division to your customers?
• What else would you like to add?
(2) Core Team and Project Foundation

Make the best salespeople from different divisions true cross-selling owners!
Think about—together with your co-sponsor—who are the best qualified and
brightest minds from the sales organization that should be part of your core team.
I recommend choosing two to three people from each division.
More important than the sales experience acquired so far, the position and the
length of time with the company is attitude, more precisely: the openness and
the passion for finding solutions to problems, the tendency to want to listen more
than to talk oneself, and the team spirit. Furthermore, it is important that these
are people who already have a certain basic understanding of the other business
unit and who may already be able to show previous cross-selling successes. These
can also be employees who have only been working for your company for a short
time, but who can bring extremely valuable experience from their previous job.
Once you have selected the people who seem most suitable to you, it is time
to arrange a first meeting in which you introduce them to the project basis—the
goals, performance criteria and added value agreed with the head of the other busi-
ness unit. The aim of this meeting is to agree on a common direction, to determine
the project responsibilities within the team and to distribute the first tasks.
In order to agree on a common direction, it is quite worthwhile to deal with
important and critical questions. Here is an example catalog that I also used in the
case example mentioned:
• How do we define cross-selling, and how do we recognize it?

• Why is there—despite a high number of potentially suitable customers and
sub-product categories in both Business Unit A and Business Unit B—cur-
rently no cross-selling?
• Where do the business models of the two business units differ, and where are
there similarities?
• Which is the strongest market for both business units?
• In which areas does cross-selling make the most sense?
• What does our competition do differently to us?
• What are the conditions for both business units to emerge as winners from this
project?
• What are the conditions for quickly exploiting the short- to medium-term
cross-selling potential?
If these questions are answered, you have captured the current state in its core
aspects. To now divide the project sensibly, use the MECE (“Mutually Exclusive,
Collectively Exhaustive”) principle again, which you already learned in Chap. 2.
It is important here that all result criteria are mapped. This ensures that no meas-
urement has been forgotten.
The most important thing you have to do at the mentioned first workshop is
to think with your core team about which subthemes or subprojects Cross-Sell-
ing consists of and who is responsible for further project work as MECE Bucket
Leader.
In Fig. 5.8 you can see all relevant MECE buckets applied to our case study:
Now ask the core team who would like to voluntarily lead a bucket as a bucket
leader in the coming months and who sees themselves as part of a sub-team and
in which bucket. I recommend that one person lead no more than two buckets and
contribute to two to three buckets in the team. This way, the project can be dis-
tributed very well on six to eight sets of shoulders (2 × Sponsor and 4–6 × Core
Team). It is important that there is a balance between the business units in terms
of bucket leadership, as well as ensuring that each bucket team is really staffed
with core team members from both divisions!
In our case example, it was the two sponsors who took the initiative and pro-
cessed the incentive system as an independent bucket. So both were not only
MECE EXAMPLE
Incentive System
Sales and Customer

Organisational Process and
Structures / Vertical Product
Resources Compatibility
CULTURE
OF
COOPERATION
Data Product,
Availability Expertise
and Access and Training
Fig. 5.8  MECE example

actively involved and were hierarchically equal to other bucket teams in the pro-
ject, but it also made sense in that an incentive system can only be released by
both. Alternatively, however, a salesperson can also be assigned to this bucket in
order to give important impulses with regard to the incentive system.
Now agree with your core team on a frequency with regard to the Jours fixes
at which it is about giving information on the progress in the respective bucket.
It is not so important how much the team progresses in which bucket at what
speed, but rather it is decisive that you make progress, which resistance occurs
and how these can be eliminated by means of team support. Not infrequently, a
positive competitive culture arises from the Jours fixes, in which no bucket team
can be too lazy and lying on the couch since the last meeting, but rather everyone
is striving to contribute actively to the success of the project. Furthermore, the
team become real owners, and a real change towards a cross-selling culture can
be observed in practice.
Create an overview of the responsibilities of the individual bucket teams. Now
it is about getting data for the individual buckets. How this data looks should
decide the respective team, possibly with the help of an expert.
It is also useful to develop a rough schedule. Important: Here, make a con-
scious decision to forego complicated Gantt charts or sophisticated plans that
map out the entire project over several months. Plans are too static and have the
big disadvantage that you spend too much time working on the listed tasks and
evaluating progress, instead of asking yourself at the regular Jours fixes whether
you are actually making progress with regard to the result criteria (independently
of the tasks, because they are only a means to an end!). The planning of the next
two weeks until the next Jour fixe depends on the progress achieved. This keeps
you on course and spontaneously manages obstacles that arise (believe me, they
will occur) along the way (see Fig. 5.9) Be sure to avoid planning horizons longer
than two to four weeks!
As a final point, you should now consider how you can communicate effi-
ciently with the team during the project. Please refrain from using e-mail and
similar tools. The most successful tools are interactive ones such as Microsoft
Teams or Slack. Teams has the advantage that it is already included in your Office
365 package (if this is not the case, you can purchase the program cheaply) and is
very easy to use. All communication can take place in a kind of chat room, where
files can also be stored.
I recommend setting up all MECE buckets as folders that everyone involved
has access to. This way, each bucket team can see what the other team is work-
ing on. And another advantage of this approach: complete transparency and thus
equal opportunities for everyone.
FURTHER PROCEDURE AND TIMING
1 2 3 4
Finalisation as-is Focus Interviews Action Plan Conclusion
analysis
Completion of the 1:1 Interviews Project work "Pressure" test

reports KPI's
Group Adjustments
Checking logic and Workshops Project work of
data gaps further MECE Final assessment
Rating Buckets
Feasible
implementation
Week 1 Week 1-2 Week 3-5 Week 6-8
Fig. 5.9  Further Procedure and Timing
Now that you have established the project basis, it is important to keep the fol-
lowing issues in mind so that the project really becomes a success.
 And remember: work together and always pull in the same direction!
I guarantee you that either you or your sponsor colleague will be the stronger
than the other in support of the cross-selling project. The reasons for this disparity
are manifold. For example, there are people who enthusiastically get new projects
going, but after the first resistance quickly lose interest (especially if they under-
estimated this before the project started) and then give “daily business priorities”
as flimsy reasons why they stay away from agreed meetings and no longer adhere
to agreements.
Or you have to deal with a person who develops other ideas during the pro-
ject and demands that everything runs according to his ideas. You can prevent such
behavior by consistently pursuing progress management and also by openly nam-
ing deficiencies. In the case described, it was the case that the larger business unit
felt exploited because the use of its own resources benefitted the results of the other
business unit. Here it was helpful to again clarify the goals and the added value and
to distribute the sub-project management evenly between the business units.
It can also happen that the sponsor has nothing to do with individual subpro-
jects on paper, but intervenes in an unsolicited and undesired way. In this case it
is important to address it as often as is necessary and to be aware that real pro-
gress and groundbreaking ideas can only arise in cross-selling if the employees
are given the opportunity to develop freely. Therefore, make your sponsor days a
top priority that is adhered to without ifs and buts. You should make this clear to
your sponsor colleague in no uncertain terms.
During the course of the project, you will very quickly gain greater under-
standing of your colleagues and, in addition, discover further potential for other
projects. I always do it this way with my projects: I agree on two different jour-
fixe categories with my customer, once at sponsor level and another at core team
level. These meetings are “sacred” because only through them can we really find
out whether we are staying on the right track and managing the project correctly.
But now to the most important “buckets” that have to be ticked on the way to a
successful cross-selling organization.
(3) Understanding Regarding the other Business Units/Training

This topic—and also bucket—is probably the most underestimated. In the note-
worthy cross-selling study by Christian Schmitz from the Ruhr-Universität
Bochum which has shown that cross-selling initiatives fail above all when there is
a lack of understanding of the product and customer needs on the part of the sales
department with regard to the other business unit (Schmitz et al. 2014).
Ask yourself what the current state of knowledge is in your sales organization.
Are there adequate further training measures that every interested sales employee
can or even must access? How much interest does your sales team have for solu-
tion selling? Only if we really understand something and also know how we can
be successful in a discipline, will we really embrace doing it. After all, nobody
likes to play golf without knowing how to hold the club and hit the ball. It is
exactly the same with cross-sectoral sales. In my experience, however, it is the
case that in 90% of the companies there is either no or only an inadequate choice
of corresponding further training.
It is therefore important that an inventory is taken of the other business unit’s
knowledge level and also of how “solution-oriented” the sales department cur-
rently is. In our case example, we assessed the sales team of the “Electrical Engi-
neering” business unit as very solutions-oriented. This was not entirely s urprising,
since the customer needs require a high degree of customization for most prod-
ucts. However, in the “Drive Technology” business unit, it turned out that the
sales department sold more “products” than solutions. Since cross-selling focuses
on the sale of tailor-made solutions, upskilling in solution selling in this business
unit was urgently needed.
In addition, other stakeholders should be involved, for example pre- and after
sales, customer service and other customer-oriented units. They often get to know
exactly what challenges the sales department is facing in the business units and
what initiatives it is taking. They also contribute significantly to the success of
cross-selling.
(4) Incentive System and Process Description

It must pay off for sales to take the cross-selling approach seriously. Every deal
closed in cross-selling must be significantly more lucrative than a deal of com-
parable size in its own division. Keep in mind: 60 to 70% of the kerosene is con-
sumed by the time an airplane reaches its cruising altitude. So don’t be too stingy
with the incentives!
A well-structured bonus system also clarifies what share the sales representative
of Business Unit A, who introduces a sales representative from Business Unit B
to his customer, has. The latter closes the deal mainly, but Sales Representative A
must also benefit from it.
Experience shows that it is better not to install a completely new incentive sys-
tem, but to extend the existing system by a cross-selling component, because often
there are too great differences in the performance evaluation of the respective busi-
ness unit, since the products and the tariff structure are completely different. For
the sake of fairness, it is also advisable to do this at the beginning of a year.
If you are entrusted with this bucket as a sponsor, feel free to include top
salespeople in this task and ask them what would really motivate them to close
more cross-selling deals. Perhaps it is not just extrinsic incentives that drive them,
but also intangible incentives such as internal appreciation or support from back-
office staff, etc.
Here too, research shows that the classic trap is to rely too heavily on material
incentives as motivation (Schmitz et al. 2014). This may initially seem surprising,
but the fact is that money has a relatively short half-life in practice. As already
mentioned above, a cross-selling organization must be characterized by a trans-
formative (rather than transactional) leadership style. This always has the team
success in mind. It is conceivable here, in addition to a relatively rational bonus
system, to define certain awards, annual competitions, etc. in order to adequately
appreciate successful cross-sellers internally. Furthermore, it can be mentioned

that for the absolute top cross-sellers, trips with the family are organized.
(5) Culture and Values

The right culture, as you probably suspect, is a prerequisite for the long-term
success of the cross-selling transformation. Without an atmosphere of together-
ness, without a culture of joint effort and overcoming individual egos, cross-sell-
ing remains wishful thinking. We humans are, after all, much more selfish than
we usually think, and we also make significantly more emotional decisions than
rational ones. The good news is that you already have people around you, ideally
those of the core team, who are already participating in the cross-selling trans-
formation simply because they know and, above all, believe that it is the “right”
thing to do.
A culture of togetherness is created through regular meetings, both virtual and

face-to-face, and through the certainty that one can always speak openly and con-
structively about shortcomings and mistakes. And: to be able to rely on the other
or—better said—the other business unit. Always!
Values are closely linked to this. You approach this in such a way that you
first of all understand how strong the culture of togetherness is today and where
it needs to be improved. For this you should again hold individual conversations
with a pool of ten employees.
Here are some values that were defined by my esteemed colleague Matthias
Kolbusa in his book “Management beyond Ego” (Kolbusa 2020):
1. Openness = the sincere desire to want to understand others

2. Trust = the conscious assumption of the risk of being hurt or disappointed
3. Courage = to say or do without filter what is right in view of the situation
4. Reliability = adhering to or renegotiating agreements in a timely manner
5. Speed = the desire to achieve goals or tasks at the maximum possible pace
This list does not necessarily have to match your organization, but you will cer-
tainly find yourself and your company in some of these values. Help your bucket
team by giving the participants these values and then asking them to explain in
writing, with a conscious and emotional bias, which values shape their personal
understanding of the task. You should do this yourself once. The understanding of
the task states which values are the basis of your work. The following questions
will help you to do this concretely:
• What are your personal core values?

• How do they affect your actions at work?
• What do you do when you see someone else acting in contradiction to your
values?
Once you’ve done that, determine the values for the rest of the sales team. Indi-
vidual conversations are inevitable for this, otherwise the salespeople might con-
sciously try not to talk to you about such a personal topic. However, it is even
better to carry out a workshop on the value theme together with the rest of the
team.
Once the values are defined, you can trigger them consciously in your com-
munication with the team. For example, if you launch an innovation competi-
tion, focus consciously on the topic of “courage” by honoring the bravest but best
ideas that are also quickly implementable (= the value “speed”).
(6) Organizational Structure

The most talented team is of no use to you if the lineup is not right. Cross-selling
can be significantly impaired or accelerated by the organizational structure of the
sales teams. Let’s look at our example again:
Example
There are two separate business units, each worth 20 and 90 million euros in
annual revenue. A total of 24 salespeople are employed in these two business
units. The question now arises as to whether the two units can be merged into
one.
There are a variety of legal and operational hurdles to such a project, and in
this case it was not so simple, as the smaller unit still had product development
and various supply chain functions. However, a unified sales management has
the decisive advantage that only one cook is in charge in the kitchen and not
two cooks arguing about the preparation of the dish. ◄
In general, I recommend building a single sales organization for up to 30 to 40

employees. This can act as a cross-departmental and cross-regional unit indepen-
dently.
The bucket team in our case study designed two organizations: on the one
hand, an organization that was embedded in both business units, but could still
cross-sell better (for example, by aligning the geographic sales areas), and on
the other hand, one that was completely rebuilt and could act independently of
the business units. In both cases, it is important that the team think about the
s ales-related functions, so that the new sales organization structure does not act
inefficiently and completely detached from these. The team then discusses which
design is more sensible and easier to implement.
(7) Customer Data Access and Customer Data Systems

This point, like the “Understanding of the other business units” point, is often
either overlooked or y dealt with too quickly. A uniform data platform is abso-
lutely necessary, by means of which a smooth exchange of customer data and
communication between the two business units can take place. We live in an age
in which important information is provided to us via the Internet at breakneck
speed and with great transparency. Consequently, the internal customer data sys-
tems should do the same. The following questions help to unify the customer data
systems:
• Are both business units working with the same CRM system, or are there two
different systems? It is absolutely advisable to use the same CRM so that the
information remains in the same system.
• If the same system is used: What access rights does sales of Business Unit A
have to the customers of Business Unit B? If there are any obstacles in this
regard (e.g. due to missing or insufficient user rights), these must be removed.
• What user competence is given in the respective business units with regard to
the CRM system? There will definitely be a disparity in the competence of
different users. Here it is recommended to build a bridge to the bucket “Under-
standing of the other business units / training“. Then training for the super
users can be organized at the same time. A super user is a person who masters
the system as an expert and is later available as a contact person for the team.
• Which customer information is entered, which mandatory fields are there?
These should also be standardized.
(8) Compatible Vertical Markets and Customers

The last bucket concerns the specific development of the cross-selling customer
potential that can be raised in the medium to long term. Although this is a little
ahead of the implementation phase of the project, it is necessary so that one does
not think too late about specific customers who can be concluded in the short and
medium term. Furthermore, this bucket is less abstract than some of the others,
so this is a nice complement to the other “pieces of the project”. Proceed as fol-
lows:
How to Determine the Cross-Selling Customer Potential

First, define your five strongest vertical markets in which the two business
units are represented.
Next, check if you can find any overlaps between the two business units.
If you find such overlaps, for example in the automotive industry, then
define your
• ten largest customers in terms of volume and sales, and

• those ten customers who have increased the most in volume over the
past twelve months.
Then go into a critical dialogue with the other business unit: Which of
these customers has the ready potential to buy more products from the busi-
ness unit? Where are there currently needs that cannot yet be satisfied by
your unit but can very well be met by the other BU? Are there any exam-
ples of successful cross-selling deals in other countries and if so, in which
industries have they arisen?
When working on this list, it is above all the quality and not the quan-
tity that counts! It makes sense to think of about ten prospective custom-
ers per business unit that you want to approach together in the next six to
twelve months. This gives you a total of 20 prospects. If each prospect makes
an average of 250,000 euros to 500,000 euros in sales, you are looking at a
growth of 5 to 10 million euros in sales that you could generate on your own
and 100% organically!
In general, I would like to emphasize that each defined prospect should already
be doing business with at least one business unit. It is significantly easier and
cheaper to sell a completely new product category to an existing customer, for
which you were not so well known in the past, than to start from scratch. Unless
these are customers who are about to close a deal in one business unit and who
you consider to be “cross-sellable” quickly due to your knowledge.
The measures that are now to be developed by the respective buckets in the
coming weeks and months should be systematically recorded using the SMART
(Specific, Measurable, Attainable, Realistic, Time-Bound) methodology. Usually
this phase takes one to two months. This ensures the same qualitative standard
with regard to the list of measures, which is also linked to a time horizon—in
preparation for the implementation phase.
In Fig. 5.10 You will find an example of how a SMART overview of such
measures looks in practice. Each bucket leader presents his overview to the other
colleagues during a later fixed appointment. Important: Make sure that each
bucket leader adheres to the format, as experience has shown that some people
prefer to choose or change the format given. In addition, the following questions
help to specify the measures in more detail:
• What are, in your opinion, concrete, time-limited measures to improve the cur-
rent situation?
• How can we measure the improvement?
• What is required (support from management/financing) for the measure to
work?
ACTION PLAN TEMPLATE: NAME YOUR MECE BUCKET

(FOR "CULTURE OF COOPERATION")
Recommended Regular monthly system

action
Meeting of the entire sales force to improve the culture of cooperation
Category: Short term

Short, medium
or long term
Capturable Minutes are taken after each meeting.

An agenda is shared before each meeting.
In addition, specific measures are allocated.
In each meeting the result of the previous meeting is discussed.
The participant discipline can be tracked.
Attainable Yes, because the meeting can be held either in person or virtually.
Due to geographic distribution and possible emerging pandemic
restrictions, team members should be able to participate
virtually at any time.
Realistic Due to the monthly frequency, the meeting should be

coordinated with the workload.
Time-bound A schedule is created for the entire year in which specific,

recurring dates are set in each month.
Fig. 5.10  Action plan template

5.5 The Implementation Phase of Cross-selling 147
If all buckets have conscientiously filled out this SMART plan and documented
their progress adequately (for example, interview content, customer potential
lists, etc.), you are ready for the implementation phase! In my projects we use the
SMART methodology as a basis to then create OKR’s (Objective Key Results)
with the core team. OKR’s are far more sophisticated than merely SMARTs,
because they do measure the efficacy of Actions and even SMART Actions. They
usually run over 6 months, whereas you really need 2 full OKR-Sprints so that
they become second nature to the team. OKR’s have been in existence since 40
years but enjoy now a Renaissance in performance-based projects.
We won’t go into further detail in this book but remembering those as an
implementation add-on is important.
Conclusion You now have a practical eight-point guide at hand that you can use
to complete the concept phase within three to four months. Especially when the
organization is mainly characterized by work in the home office and personal
meetings are rare, it is particularly important to meet in person at regular inter-
vals. I recommend at least three workshops with mandatory attendance (at the
beginning, after half of the concept phase and at the end), which take place once
at one business unit and once at the other (if the locations are geographically sep-
arated from each other). Furthermore, it is advisable to conclude these meetings
with a joint lunch or dinner, which is alternately paid for by the “host” business
unit. Do not underestimate the hard currency “trust”, which can be developed
much better through personal meetings.
5.5 The Implementation Phase of Cross-selling
It is important that the implementation phase is not started too early, no matter
how great the temptation may be. People are good at “doing”, but much less good
at really thinking something through and, above all, arriving at the right measures
on a factual basis. Since the practical implementation has the greatest potential
for value creation, but must be adapted very individually to your company due to
the large number of factors, I can only show you a general way below. Neverthe-
less, this will be very valuable for your organization.
The good news in advance: The more successful you have completed the con-
cept phase, the easier the implementation phase will be. Therefore: Do not start
the implementation phase until all result criteria have been checked off together.
And don’t hesitate to extend the first project phase by a month if you find that you
are not making as much progress as originally assumed.
When the concept phase is completed, the same principles apply to the imple-
mentation phase:
1. Adapt your goals, result criteria and added value for the implementation
phase.
2. If necessary, expand or reduce the core team. In this new phase, it is essential
that you have “finishers” in the core team in particular, that is, employees who
have finished things in the past, are very process-oriented and patient, but at
the same time also assertive.
3. Consciously allow yourself a time horizon of at least nine months for the
implementation phase, because that’s how long you really have to stay on the
ball until it (almost) runs by itself.
4. Disassemble this phase again according to the MECE principle. The previous
MECE buckets provide a good orientation or remain valid, only underpinned
by other, much more practical measures. However, in most buckets (e.g.
organization, training, etc.), it is the case that these must be completed in the
implementation phase in particular. This is particularly important in the “val-
ues” area. Only if the cross-selling values that you have defined in the concept
phase have really been internalized can you really work seriously and consist-
ently on the implementation. So always keep an eye on it and don’t forget that
95% of companies fail at cross-selling. These companies have less of a “will-
power problem” and “idea problem” than an “implementation problem”!
Typical stumbling blocks or mistakes occur during implementation:
1. Underestimating the time required: Implementation is not a sprint and not

shorter than the conceptual phase. Rather, it is exactly the other way around:
If you take the necessary consequences and carry out what I describe below,
implementation is possible, but clearly a marathon. It is important to really fin-
ish this one. If you are negligent along the way, the implementation phase will
be much more difficult. Imagine that you have successfully arrived at the base
camp of Mount Everest, then completed the altitude training and the ascents to
base camps 2 and 3, and are now ready to tackle the final stage to the summit.
2. Lack of endurance: The conceptual phase makes up 20 to 25% of the total
distance to be covered, so that at the beginning of implementation there are
still 75 to 80% left. That is why it is so important to pay attention to the right
composition of the core team, that is, to make sure that conscientious and
enduring people are involved who want to and can overcome resistance.
3. Celebrate early successes—quick cross-selling success and early comple-

tion of the customer potential list: You will be surprised, but it is quite pos-
sible that you start with a bang and the cross-selling success comes sooner
than expected. Suddenly, the customer potential list worked out in the concept
phase is already worked off because the relevant customers are already com-
pleted after only a few months. In this case, it is important that you always
remember to provide enough replenishment in good time and see quick suc-
cess as an opportunity to intensify your efforts even further.
4. Lack of customer involvement in the improvement process of cross-sell-
ing: This point is related to the previous one. Make it a habit to analyze the
first cross-selling successes in detail, so that you know exactly what convinced
the customer and which errors were committed, but hidden by the euphoria
of the achieved success. An example where you can only find out which error
the team made with the help of an individual customer survey (“Post-Celebra-
tion”): The customer was thrilled with the solution and bought it—possibly
only because it was (as yet) not offered anywhere else. However, he criticizes
the lack of coordination of both salespeople in the communication with him
and in the presentation to him.
5. Too slow scaling of cross-selling across the board: A key part of the imple-
mentation is to ensure that a cross-selling culture arises across the board.
While the basis for the future organization was laid in the concept phase and
the core team fought together for it, it is now about transferring this “spirit”
to the rest of the team. In our case study, only 25% of the entire sales team
belongs to the core team. The task now is to convince the final doubters and
foot-draggers. Please do not underestimate the negative influence of certain
old-timers or permanent complainers who would rather hold on to the tradi-
tional than to adapt to the new. The saying “He who does not keep up with
the times goes with the times” has been proven time and again. For example,
when e-mail arrived and also with the smartphone. Sooner or later we had to
adapt. It is similar with cross-selling. Therefore, you can also use the imple-
mentation phase as a test of who really fits you in terms of attitude. If, despite
your and the core team’s best efforts, recalcitrant foot-draggers remain, you
only have one option, namely to remove them from the team.
Let’s briefly return to the goals, results criteria and added value that need to be
adapted for the implementation phase. It is worth taking the time to redefine these
together with your co-sponsor, which should now be much easier than at the
beginning, as you have probably developed a better understanding of the future
cross-selling organization in the meantime. In addition, it is advisable to involve

the core team in this process. Here is an example of how this could look:
• Goals (adjusted):
– Maximizing margin and earnings growth in new business, particularly
through cross-border cross-selling in strategically relevant business units
– Creating a long-term, self-sustaining cross-selling performance culture
• Success criteria:
– The split or the degree of cross-selling share of the existing business
between Business Unit A and Business Unit B increases continuously
through a higher number of newly won cross-selling projects.
– The sales team of both business units now has a greatly improved compe-
tence with regard to the products or services of the other unit.
– The ratio of costs to profit improves and is measurable on a quarterly basis.
– The average factor of the generation of one’s own Cost to Company per
salesperson increases.
• Value (selection):
– Revenue increase by x million euros p.a. (was determined in the concept
phase) through increased cross-selling activities of product area X
– Increase in sales in the focus verticals Business Unit A and Business Unit
B, additional basis for possible future growth
– Reduction in customer churn rate through upselling of several different
product groups
Now start to implement the defined SMART measures from the concept phase
into the implementation phase—coupled with additional measures–, to carry
them out and above all to monitor them. For this purpose, regular Jours fixes are
required, which should take place every two weeks. It is recommended that these
measures be managed by the bucket leader in the respective bucket, possibly
involving the extended team.
For the second bucket—“Training and product understanding”—this can mean
the following:
1. In order to determine the training needs of all salespeople, a virtual survey is

carried out, which is completed by a series of personal interviews.
2. The focus areas and scope of the training (one-time or multiple) are defined.
3. It is determined which of these topics can be trained by internal resources (for
example product or CRM training) or by external (for example Solution Sell-
ing/Consultative Selling etc.).
4. Internal and external trainers are identified.

5. The training will be started within four to six weeks.
6. A feedback process takes place in order to continuously check the quality of
the training and to identify any potential for improvement.
Furthermore, it is important that you celebrate cross-selling successes as a team.

Make it a point to highlight what has worked well and how other salespeople can
be successful in a similar way. It is also conceivable that you award a “Cross-
Selling Award” once a year as part of a corresponding event.
Instead of giving the best salesperson a cash prize, you could also consider mak-
ing a certain budget available to him or her, which he or she can distribute to inter-
nal stakeholders at his or her discretion. Combine this with a sales conference that
you hold twice a year. This will ensure that you are always close to the “motivation
pulse” of the sales team and create an even more effective team performance culture.
Finally, let’s come back to your customers: With the experience you have now
acquired on how to behave in times of the Coronavirus pandemic, the safe imple-
mentation of face-to-face customer events should no longer be a major problem
for all parties involved. Hold at least two customer events per year in which you
talk specifically about the cross-selling successes achieved, for example in dia-
logue with one of your customers on stage. There is nothing more convincing
(not only for your customers, but also for your team!) than the positive statement
of a customer who, together with you, speaks about the outstanding success and
added value of a tailor-made product created as part of cross-selling.
In addition to your existing customers, you should especially invite “hot”
potential customers who are about to close or have such a great cross-selling
potential that you should give them access to your exciting events from the start.
Imagine that one or more of these potential customers gets into a conversation
with one of your enthusiastic cross-selling customers. Then you just have to stand
by and watch what magic unfolds. Invest additionally in an interesting guest
speaker from science or sports. This makes your event even more exciting and
above all more desirable.
It’s great if you’ve created an outstanding cross-selling organization. If the
cross-selling engine is really running smoothly after nine to twelve months, you
should monitor the process for another six to nine months as sponsor and, if nec-
essary, in cooperation with an external consultant, to ensure lasting success. And
even better and essential for the much-desired low attrition rate is if you extend
this culture to other related departments or your entire organization. Be the one
who actively drives this project forward, even if it goes beyond your actual area.
You will “recommend yourself“ for even bigger tasks!
References
Kolbusa M (2020) Management Beyond Ego. Teams in der neuen Arbeitswelt zu
außergewöhnlichen Erfolgen führen. München: Ariston.
Schmitz C, Lee Y-C, Lilien GL (2014) Cross-Selling Performance in Complex Selling Con-
texts: An Examination of Supervisory- and Compensation-Based Controls. In: Journal
of Marketing 78(3), pp. 1–19. https://doi.org/10.1509/jm.12.0421.

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Alexander

Sales and Business

ISBN 978-3-658-39755-5 ISBN 978-3-658-39756-2 (eBook)

Responsible Editor: Manuela Eckstein

March 2022 Felix Wenzel

This book is the distillation of my knowledge, my experience gathered in

Düsseldorf, Alexander Nowroth

1 Upheaval in the Logistics and Sales World: Five Trends You

3.1.2 Characteristics of a Meritocratic Leadership Style . . . . . . . . 66

5.1.2 Making Employees Part of the Solution . . . . . . . . . . . . . . . . 114

 This chapter gives you an overview of the market environment and

1.1 Trend 1: Disruption Causes Tension

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden 1

In addition, service in the logistics industry leaves much to be desired. So at

that other large shipping companies—as so often with other groundbreaking

The Existence of Many Forwarders is in Danger

Of course, the market is much too large to be dominated by shipping companies

 Many shipping companies have grown strongly in the last twelve to

1.2 Trend 2: Exponentially Accelerated Change

 “Strategy eats planning for lunch, right after breakfast!”

THE LOGISTICS INDUSTRY IN 2023

WE ARE THE FIRST

Fig. 1.1 The logistics industry in 2023

1.3 Trend 3: Sales Struggles with Bureaucratic

1. Revenue-generating tasks (e.g. customer visits, pipeline formation, customer

I estimate that the revenue-preventing avoidable tasks can make up to 50% of a

THE 4 BIGGEST BUREAUCRACY MONSTERS AND TURNOVER INHIBITORS

Fig. 1.2 The four biggest bureaucracy monsters and sales inhibitors

1.4 Trend 4: Sales Becomes More Digital

 Interestingly, the Coronavirus pandemic has not led to a digitaliza-

1.5 Trend 5: Closing Rates and “Hit Rates” Gain

1. Continuous, rolling measurement from the last four quarters

a. Closing Rate and Hit Rate

Calculation Example Hit Rate

• Last 4 quarters: 15 Tenders

In other words, if a customer awards a total of 15 million euros and

c. Sales Team’s Engagement with the Achieved Numbers

• How strongly is my customer portfolio geared towards a particular prod-

Hamel G (2014) Manage Change in a Hyper-Changing World. Published by Tim Ragan.

 What distinguishes a bad from a good and a good from an excel-

2.1 Why a Good Business Model is Essential for

First of all, it is important—as with so many things—to come up with a clear

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden 17

 The business model is the heart of a company. It describes how a

Without an excellent business model, a logistics company is not future-proof. It

The Three Business Model Categories

• Category 1: Highly capital intensive

 A missing or insufficient further development of the business model

A good diagram that really shows everyone the danger of an exponentially

• CO2 emissions caused by humans,

LINEAR VS. EXPONENTIAL GROWTH

Exponenal Growth Linear growth

Fig. 2.1 Linear vs. Exponential Growth

 Take a close look at the needs of your customers!

• What feedback is currently being provided by all functions in direct customer

2.2 The Business Models in the Logistics World

2.2.1 Category 1: Capital-Intensive Shipowners

Market Share Overview or the Oligopoly of the Top Five

COSCO Group 12.9%

CMA CGM Group 12.4%

Evergreen Line 5.2%

HMM Co Ltd 2.9%

0% 2.5% 5% 7.5% 10% 12.5% 15% 17.5% 20%

1.1 Trend 1: Disruption Causes Tension

1.2 Trend 2: Exponentially Accelerated Change

Fig. 1.1  The logistics industry in 2023

1.3 Trend 3: Sales Struggles with Bureaucratic

Fig. 1.2  The four biggest bureaucracy monsters and sales inhibitors

1.4 Trend 4: Sales Becomes More Digital

1.5 Trend 5: Closing Rates and “Hit Rates” Gain

2.1 Why a Good Business Model is Essential for

Exponenal Growth Linear growth

Fig. 2.1  Linear vs. Exponential Growth

2.2 The Business Models in the Logistics World

2.2.1 Category 1: Capital-Intensive Shipowners

Fig. 2.2  Market share of shipping companies. (Source: Statista 2022)

2.2.2 Category 2: Less Capital Intensive—Carriers

Operang margin 8.2 7.0 26.9 6.5 5.1

Operang income $ 940,437 766,692 796,563 700,260 670,163

Fig. 2.5  Expeditors International financial results. (Source: Expeditors International of

Fig. 2.6  Financial results of Kuehne + Nagel. (Source: Kuehne + Nagel International AG

Fig. 2.7  ABC Analysis Procedure

2.2.3 Category 3: Rising Stars—Start-Ups

2.3 How to Adapt a Business Model

2.4 How to Check Your Business Model for its

Fig. 2.8  MECE Case Study Wedding

2.5 Defense of the Business Model against Related

2.6 Derivatives from the Business Model Adaptation

2.7 Interview on the Topic of Record High Freight

3.1 From an Autocratic to a Meritocratic Leadership

3.1.1 The Unfair Balance of Power and Force

3.1.2 Characteristics of a Meritocratic Leadership Style

3.2 The Basics of a Performance Culture

3.2.1 Smoothing Disproportionate Performance

3.2.2 The Right Sales Team Size