(601.01) GE Energy, Doug Terrell, Retired Head of GE's 43,000 Person Sales Organization.

(601.02) GE Energy, Doug’s Success Lessons: How to Sell to Senior Executive Decision Makers and Avoid the Commodity Trap of Lower Level Buyers* (DT)

(601.03) Part 1: Focus on the Revenue Side - Make Money for Them* (DT)

(601.04) Part 2: Faster, Bigger Paybacks than Your Competitors* (DT)

(601.05) Part 3: Becoming Part of Customer's Planning Cycle* (DT)

(601.06) Part 4: How Being Better on the Revenue Side Helps You be Better on the Cost Side* (DT)

(601.07) 35% Contribution Margin on $47 Billion in Services Revenue: How GE Avoids the Trap of Underrating Services* (DT)

(601.08) Incentive Systems Work: How We Increased Sales from $640 Million to $1.1 Billion in One Year, to $1.4 Billion the Next* (DT)

(601.1) GE Energy, Aero Derivative Turbines (jet engines in unconventional uses e.g. power generation, gas pipeline compression, ship propulsion). Grew Services Sales from $250 Million to $540 Million and Operating Profit from $18 Million to $95 Million in Two Years. Growth was 50% acquisition, 50% organic.* (DW)

(601.2) GE Energy, Aero Derivative Turbines. Keys to effective acquisitions included GE's well known integration disciplines, but also buying companies that were known to have opportunity for service optimization and profits (see other 601 success story details).* (DW)

(601.3) GE Energy, Aero Derivative Turbines, Key Services Contributing to Sales and Profit Growth: Reduced Jet Engine Refurbish Time from 6 Months to 2 Months. Dramatically reduced customer outage time. Also freed up 2/3 of refurb plant capacity, allowing for significant growth and cost reductions without adding capital investment.* (DW)****

(601.4) GE Energy, Aero Derivative Turbines. Key Services Contributing to Sales and Profit Growth: Alternative #1 to Customer Outages of 2 Months+. Leased a refurbished jet engine to customer while customer's engine was being refurbished. Reduced outage time from 2 months to a few days for swap out and a few days for swap back in after refurbishment complete.* (DW)

(601.5) GE Energy, Aero Derivative Turbines. Key Services Contributing to Sales and Profit Growth: Alternative #2 to Customer Outages of 2 Months+. When it was time for a customer's engine to be refurbished, leased or sold a refurbished jet engine to customer AS AN EXCHANGE UNIT. Reduced outage time from 2 months to only the few days required for one engine swap out (the customer's engine was now GE property and refurbished for another customer.)* (DW)

(601.6) GE Energy, Aero Derivative Turbines. Key Services Contributing to Sales and Profit Growth: Beating Competitors that are "Cherry Picking the Spare Parts Business". Sharp competitors could often reverse engineer high-wear parts and undercut GE's prices. By using disciplined, rapid feedback and quality improvement, with much information collected by the services units, GE was able to continuously improve the quality of high-wear parts and provide superior value to customers. This had the added benefit of causing competitors to frequently lose money on their investments in "cherry picking parts" strategies against GE.* (DW)

(601.7) GE Energy, Aero Derivative Turbines. Key Services Contributing to Sales and Profit Growth: Reduced Reliance on Normal Spare Parts Business, Parts Depots, In Favor of Refurbishment and Higher Value Services Contracts. The collective advantages of these services strategies allowed GE to move away from the commodity side of the spare parts business (where inventory dollars are often not used as effectively as elsewhere in the company.)* (DW)

(601.8) GE Energy, Aero Derivative Turbines. Key Services Contributing to Sales and Profit Growth: 5 to 10+ Year Service Agreements That Reduce Customer Risk and Beat Competitors Who Sell Low and Try to Profit On Repairs. Customer's greatest risk was the high cost of an engine failure, resulting in an outage. This included both expedited repair costs and emergency measures needed to cope with outages, financial penalties, etc. GE's service disciplines and ability to maintain the engines became so strong that it could predict long term costs and provide contracts that insulated individual customers by spreading risk among many customers and make a profit. As with other excellent companies providing long term service contracts, GE took on the risk in such a way that it profited every time a failure was prevented. This greatly benefitted the customer and was nearly impossible for a customer or competitor to duplicate. This led to higher margins and longer term commitments from customers.* (DW)

(601.9) GE Energy, Aero Derivative Turbines. Additional GE Strategies Contributing to Services Sales and Profit Growth: Certain industries such as this operate on a "give away the razor (the engine) and make your profit on blades (the services) model. Jet engines typically have a 20 year+ life. A strategy that GE has applied in many industries is "Provide a Technology Solution You Can Apply to an Installed Base (Yours or Your Competitors)." GE would also offer "Value Packages" and regularly think through offerings based on "Conversions, Modifications and Upgrades." Aero Derivative Turbines is one example of the financial results achieved from these strategies.* (BR)

(610) Mark Grant, former General Manager, GE Service Shops, GE Power Systems Marketing, GE Power Systems Engineering Services, GE Power Systems Six Sigma, Former President Cooper Rolls Royce, Former CEO Stewart and Stevenson. Former CEO Halcore Group.

(610.1) Value Pricing Win: Grant was responsible for 25 value-priced sales of steam turbine services in one year. These sales averaged $4 million revenue and 50%+ margin. The best example was Brunswick Paper, where the GE team identified $7 million per year in annual savings and was able to charge the customer $6 million while earning $5 million in margin*. (MG)*

(610.2) Stewart and Stevenson, oil, gas, power industry services provider and manufacturer of vehicles for U.S. government: Grant led growth from $6 per share to $35 per share at sell-out over four years.* (MG)*

(610.3) Halcore, manufacturer of ambulances: Grant led stock price improvement from $4 per share to $27 per share and sell-out over six years.* (MG)*

(611) Jane Mills, a Mechanical Engineer with Proctor& Gamble out of college, spent her first 15 years learning to optimize manufacturing environments for General Electric Industrial Control Systems, Emerson Electric and Fisher Controls. Rose to running a $140 million P&L with five divisions, 1,000 sales and operating staff and 18 sales rep offices.

(611.1) Saftey-Kleen Success: As Senior VP, built Western Division and Canada to $200 million (25% of company total). While company was exiting bankruptcy, brought her division from a loss to #1 revenue and EBITDA (>10%) among the divisions for five out of six years. Mills attributes much of her success to applying the disciplines of lean manufacturing to services and sales.

(602) Heidelberg (Heidelberger Druckmaschinen Ag, printing press manufacturer, $3.1 billion sales in 2010) Summary: 44% of Revenues From Services. Products consistently sell for a 20%+ premium over most competitors. Corrected profit leakage in service agreements. Invested in remote monitoring, other technology, resulting in better profits and extensive additional services sold to customers. Heidelberg added a “consumables” business that added 12.5%+ to U.S. Sales. (Public financial statements, HBR article, BB)*

(602.1) Bill Best, 31 Years with Heidelberg, retired in 2009 as Senior Vice President responsible for $180 million+ in Services Sales ($600 million+ total product and service revenue in the U.S.) Associate started as sales rep. Ultimate responsibilities included ten Regional offices, all Regional Vice Presidents and Regional Service managers.

(602.2) Major U.S. Commercial Printer Success Story: Closed initial order for $14.5 Million, charging approx. 20% more than next lowest price competitor. Customer ultimately purchased $40 million+ in product and $10 million+ in services (approx.). Key technical / solution edge that won the business and kept it for 20+ years: Heidelberg designed custom printing systems / solutions that produced high-precision color output needed by the customer. Additional services that mattered: (Not all services applied in this case. Listed below to assist in understanding Heidelberg's strengths.) (BB)*

1. Pre-sales design / engineering of printing solutions (sometimes extensive, usually done at no charge.)

2. Process / Application Improvement Consulting (Evaluate what customer trying to accomplish and recommend best approach. Might include services, products, process / productivity improvements, plant workflow / layout, etc.. Sometimes performed for fee, sometimes free as part of sales process.)

3. Off-Site, Pre-training for Press Operators (discovered extreme value in early training, before operators are in the rush of normal 24/7 press operations).

4. On-Site Training for Press Operators

5. On-Site Training for Maintenance Personnel

6. Installation (Rigging)

7. Time & Materials Repair Service

8. Some Sophisticated Service Contracts, Possibly Guaranteeing On-Site Service within 24 Hours (an important differentiator because low price competitors do not have enough field service people to match these commitments)****

9. Remote Diagnostics / Monitoring (e.g. A feeder was not engaging. Remote Diagnostics fixed the problem by having the operator reset the delivery tray, saving the customer $8,400+??? in down time).

10. Removal and Resale of Old Equipment (de-rigging).

11. Refurbishment of existing mechanically sound equipment with new electronics, et. al. (while competitors try to sell new equipment only).**

(602.3) Associate’s Best Sales Tools & Techniques:

(1) A book showing a picture, name and address of every field technician and technical support person in the US that was available to help and support the customer****.

(2) Cost justification models based primarily on up time and full utilization of the press (including all costs of ownership, so customer would not look just at the lowest cost press)**.