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Denon: Growth through sales territory optimization

Denon: Growth through sales territory optimization

Following the success of its HEOS product line, Denon faced the challenge of introducing a new sales structure. GfK worked with Denon to create a new sales structure aligned with the available regional market potential. Particular emphasis was placed on helping Denon meeting the needs of its customers and quickly implementing the new structure.

Denon Deutschland is a leading provider of high-end entertainment system and is considered a trendsetter for multi-room systems. Alongside the established brands Denon and Marantz, the HEOS product line offers high-resolution audio via streaming or app. This expandable, wireless music system responds to the latest consumer demands by offering easy-to use controls and the ability to synchronize with mobile devices. Denon approached GfK with the desire to create a dedicated sales structure for HEOS so Denon could meet consumers’ needs and respond to a rapidly evolving market.

GfK spoke with Frank Lenzkes, Commercial Manager of Denon Europe.

Mr. Lenzkes, could you talk a bit about how your company is structured? 
Denon is committed to innovation and the art of modern engineering in the area of high-end audio and entertainment systems. Our product portfolio includes the brands Denon, Marantz and HEOS. As a manufacturer, we sell our products through a large network of retailers in the consumer electronics sector. Our outside sales force team deals directly with this retailer network.

What prompted you to approach GfK?
The success of our multi-room product line HEOS and the associated hiring of five new outside sales force members for our German-speaking markets inspired reflection on how we wanted to offer products in the future. Up to that point, we had been committed to a single sales team for our three brands.
The trend toward networked devices continues and is one of the fastest growing markets in consumer electronics. To meet the demands of our customers and provide the best-possible service, we decided to create a dedicated sales structure for our HEOS brand. We wanted to do this first in Germany and Austria.

Because we regularly use GfK data to evaluate our performance, we opted for a geomarketing solution from GfK.

What were the key considerations?
Key factors for us were creating five sales territories for Germany and Austria as well as taking into account the turnover potential of retailers. We wanted our outside sales force to be able to tap the existing market potential in an efficient and balanced way. We also needed a rapid implementation of the new structure so our employees could begin working with customers using the new regional assignments.

How did GfK respond to these needs?
After agreeing on the optimization goals, GfK analyzed Denon’s customer and turnover data in conjunction with data on market turnover potential and additional criteria such as postcodes, customer classifications, employee places of residences, and so on. GfK then calculated the best regional structure based on these factors.

At a workshop, we evaluated Denon’s regional market exploitation on digital maps. GfK then proposed a layout for the territories that would allow for the best possible exploitation of regional potential. Next, we fine-tuned the proposed structure to ensure the continuance of long-standing customer-employee relationships.

We then reached a consensus to implement this structure as quickly as possible. We were successful in this endeavor thanks to GfK’s careful planning and efficient time management.

What’s your impression of the results? 
We’re very happy with the results of the territory optimization, which already bore fruit within the first two months following the implementation. Even in just this short time, we observed an increase in the number of households using our products. Our employees now know the regions with the highest potential and can target their efforts more strategically and plan customer visits more efficiently. This allows us to further our commitment to keeping our customers’ needs at the heart of our business.

And we’re also able to set more realistic goals based on solid data rather than a mere gut feeling.

We would gladly choose GfK for our future optimization needs and can also enthusiastically recommend their goal-oriented consultancy to others.

We thank you for the interview, Mr. Lenzkes.

About Denon
Founded in 1910, Denon is one of the world’s largest manufacturers of high-end audio and home cinema products. The company is passionately committed to technical innovation and the art of engineering. Denon products are sold through an extensive consumer electronics network.
More information at www.denon.com.