Miele outsourcing sales team to agency, moving to key account management system

Strong consumer demand: Michael Jeanes.

Miele Australia MD Michael Jeanes.

Due to the changing nature of the Australian appliance industry, which has seen Miele consumer points decline from over 650 to only 400 over the past two years, the German company has decided to restructure its sales team.

The company will be integrating a new key account management system, supported by merchandising staff from third party agency Demoplus, in advance of the release of its new W1 and T1 premium laundry appliances in the first quarter of 2015.

Demoplus describes itself as “Australia’s original face-to-face marketing agency connecting brands with consumers, one experience at a time”. Miele plans on deploying Demoplus staff, after rigourous training, to its retail touchpoints to assist in the merchandising of products and the closing of customers during the sales process.

Miele Australia managing director Michael Jeanes told Appliance Retailer that this is not a cost cutting measure and the company is changing how it allocates its sales force budget in order to maximise the return on investment. Jeanes said that by spending the money through Demoplus instead of on salaried employees, Miele can increase its ‘on the ground’ sales force by more than 50 per cent.

Two appointments have been made as a result of this restructure: Owen Holburn is heading up the Key Account Management division and Cameron Stow is the new Head of Field Force. These appointments were effective 24 November 2014.

In a letter sent to Miele’s Chartered Agents on 19 November 2014 (see appendix at bottom of story), director of sales David Woollcott explained why the German brand, which sells its major appliances under a pro forma agency system, was making these changes.

Following an extensive review of our MCA field team, we are embarking on an organisational change programme in the coming weeks to reflect the trends in the market and the needs of our valued retail partners.

As you will have noticed in recent years, retailer consolidation has gathered pace resulting in wide scale point of sale closures, mergers and acquisitions on a scale not seen before in the Australian consumer goods marketplace. In order for us to maintain our position as a leading supplier of domestic appliances and the brand of choice for Australian consumers, we must adapt to the new order of the marketplace.

The idea for this change stemmed from Miele’s floorcare business, which is sold outside its agency system, in a more traditional wholesaler to retailer process. Jeanes told Appliance Retailer that Miele had been using a pilot program focused on its vacuum cleaners to effectively combat Dyson’s expansion in the market. Dyson has been so good at merchandising and demonstrating through 2014 that it has taken share of all its rivals, Jeanes explained, but in areas where Miele had ramped up its third party in-store presence, the German brand had held off the English challenger. This is the system that will now be expanded and rolled out through the Chartered Agents to sell major appliances.

“We’ve learnt from this and we’re really upping our ability to put more of those people on the ground to execute (our strategy),” Jeanes said in an interview with Appliance Retailer. “We’ve lost 29 field representatives and next year we will be reinvesting into 50-plus, depending on what promotions and what we need to do throughout the year; it’s a flexible field force merchandising resource.”

Woollcott added that he doesn’t envisage Demoplus staff taking a leading role at the premium cooking stores, because that is where the retailers have really good specialist employees already on the books. “This is more in the transient environment of the mass merchants or an area where you just need a concentrated focus for a period of days, weeks or months to drive a promotion,” he said.

This author is on Twitter: @Patrickavenell

A copy of the letter sent by Miele to its Chartered Agents.

A copy of the letter sent by Miele to its Chartered Agents. (Appliance Retailer watermark added)

Update: An earlier version of this story listed David Woollcott’s name as Michael Woollcott.

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