Tag Archives: improving the sales process

Sales Process Productivity – 20 Questions?

Our previous post focused on applying the fundamentals of CI to the sales process, and included some proven best practices that can help boost field-day efficiency.

But the sales process extends well-beyond a day in the field, as it encompasses everything from identifying a lead to delivering a solution.

Considering this broad spectrum, it is really not surprising that the largest waste in most commercial and industrial organizations is lost gross margin that results from sales not made, sub-optimal pricing, and excessive costs in sales-related processes.

The first step toward improvement — that is, moving from “where we are now to where we’d like to be if everything were right” — is to identify specific areas of waste, and a good way to start might be to answer the following 20 questions:

  1. What is our current market share?
  2. What are our customers’ requirements?
  3. How well are we meeting these requirements?
  4. What would it take to truly delight our customers?
  5. How long does the sales process take from lead to sale?
  6. What is our lead conversion ratio?
  7. What were the top 3 reasons for lost sales over the past quarter?
  8. How many calls do our sales people make, on average, each day?
  9. How much time do we spend talking with uninterested or unqualified leads?
  10. How do we continually improve our sales team’s skills and habits?
  11. What percentage of prospects contact us first?
  12. How does this percentage (#11) compare with industry data?
  13. Does the sales process take less time to complete for inbound leads? If so, how much less?
  14. What is our response time to customer or prospect inquiries?
  15. How many customer complaints do we receive?
  16. How much time do our sales people spend interceding or responding to complaints?
  17. What is done with the information associated with customer complaints?
  18. How do customer complaints or how does customer dissatisfaction impact our ability to make sales?
  19. How often are discounts extended, and what is the average discount?
  20. Are discounts offered due to competition or in response to dissatisfaction?

Clearly there are many more questions and steps associated with analyzing and improving an organization’s sales process, but these twenty questions are a good starting point.

Sales Process Productivity

Previous posts have focused on applying the fundamentals of CI to the sales process, which tends to be a bit more complex than many people realize.

Leaving aside the “selling skills” or “charisma” associated with those perceived as the most successful sellers, when you consider the day-to-day activities required of a field-based or outside sales professional there are numerous pitfalls that can compromise productivity.

There are also some proven best practices that can help to boost field-day efficiency, which include the following:

  1. Pre-call planning: by planning each sales call in advance, in writing, sales people can position themselves to accomplish more in less time, thus increasing personal productivity as well as accelerating overall cycle-time. Not only will running more comprehensive sales calls increase efficiency, but the habit will also make a stronger, more positive impact on customers. Many who have embraced this best-practice report that their customers recognize the difference and, over time, become more willing to schedule meetings or sales calls, thus enabling them to more easily make more calls each day, an important part of the job as noted in the next bullet.
  2. Set a daily call volume goal. This may sound like an unnecessary step, but a surprising number of sales people are unable to quantify the actual  average number of sales calls they make each day. As author Jack Falvey has said, “Want more sales? Make more calls.” By setting a personal goal, which will vary depending on the nature of each territory, sellers are often able to self-motivate more effectively and make more calls per day.
  3. Geo-plan: by creating a strategic geographic or travel plan for each day, outside sales people can minimize drive time and optimize “face” time. The best plans will begin by creating territory quadrants and then mapping the locations of customers and key prospects. The rule-of-thumb is to avoid traveling beyond two quadrants in any given day, so when an appointment is set in one area, try to schedule meetings or plan to visit others in the same general region to enable a maximum number of interactions in a minimum amount of time.
  4. Bookend each day by scheduling an appointment early in the morning and another late in the afternoon. This will promote “staying the course” as opposed to deciding to drive back to the office early to do administrative work. This best-practice might also help to achieve item #2 above.

Improve Sales Too

It’s rare to find a business organization of any substance
that has not implemented at least some type of improvement initiative in their manufacturing, administrative, or service sectors,  whether it be the Conway approach, LEAN, Six Sigma, and so on.

But, as noted in a previous post, not as many have defined a sales process, nor have they taken the hunt for waste and the quest for continuous improvement into the realm of sales .

Selling is a process. The basic principles of work and process improvement certainly apply, and, just as these principles have brought about measurable gains in other sectors, so too, if properly executed, can they help those in the selling arena learn how to contribute more to the overall enterprise; how to work smarter, faster, and with more success.

These principles might also help a sales team stand out from the competition due to more effective execution.

By teaching the basic principles of studying, changing, and improving work and work processes to sales professionals, an organization can empower them to help themselves and the enterprise realize major (breakthrough!) accomplishments, such as:

  • Communicating at a higher level with customers
  • Gathering the “voice of the customer”
  • Interacting more harmoniously with internal customers
  • Selling more in less time
  • Managing key accounts more effectively
  • Increasing margins

As sellers learn more about the effects of continuous improvement, they will become better at translating the company’s true value-added message. They might even help to develop it!

As they become more educated and enthusiastic about the relevance of simple statistics, variation, and waste reduction, it’s likely that they will also become more effective at uncovering and expressing true customer needs.

And finally, a sales force so educated will more readily recognize the advantages of incorporating all of these principles into their daily sales effort. As a result, they will become more efficient. They will become more successful. Successful sales people stay on, sell more, and help the company grow more profitably.

Why not improve sales too?

10 Good Reasons for Defining (& Improving) the Sales Process

Have you formally defined your organization’s sales process?

In other words, have you documented the specific steps you or your sales team must execute to move from identifying a lead to closing the sale?

If so, are they the right steps?  Have you mapped the key objectives and activities for each step? How about measuring team performance on a step-by-step basis? Are people working on the right things? Have you identified the best opportunities for continually improving each step and, as a result, the entire process?

We’ve found that those who place a strong focus on these things are able to execute the sales process much more effectively and, as a result, enjoy a number of advantages, which include:

  1. Consistent approach which can more easily be analyzed and continually improved, most often resulting in a greater competitive advantage
  2. Common language throughout the organization, facilitating more effective strategizing
  3. More consistent and diligent lead qualification, thus promoting efficiency and reducing waste
  4. More precise definition of transaction status and progress, thus more accurate forecasting
  5. More comprehensive need assessment, which promotes a consultative selling style and higher margins; better assessment also tends to bring-about a heightened responsiveness to customer needs, interests and priorities, and often yields larger average order size
  6. Heightened ability to incorporate the voice-of-the-customer into organizational decision-making
  7. Higher levels of conscious competence and team development
  8. Shorter sales cycles
  9. More natural closing
  10. A better customer experience, as the “diligent” execution promotes differentiation

Improving Sales

Imagine what it would be like if your company could make every sale!

How much revenue could be generated each year? How much profit? How much growth?

How would you manage it all? What changes or improvements to the current selling process do you think would be required for this to happen?

lowaimquote Of course it wouldn’t be reasonable to plan on making “every” sale, but as the James Russell Lowell quote suggests, it’s best to aim high!  But in an effort to do so, and when trying to answer these questions, most people discover that selling is a multifaceted activity, and identifying the waste that is common to the process is more challenging than expected.

To begin with, the physical work is tough to track because it’s done in different places (i.e., in the field, in showrooms, on the phone, etc.) under varying circumstances, and involves a constantly changing cast of characters (every customer is unique!).

In addition, standardized practices are not easy to establish due to regional variations in culture and acceptable conduct. And the appropriate “next step” in the process is constantly subject to change based upon several varying and unknown factors – how the customer or prospect will react to what’s put on the table, their decision-making process, communication gaps, and more!

But as is the case with all forms of work, once we sufficiently delve into the work involved in selling, we can identify waste and find tremendous opportunities for improvement.

Consider that all waste can be categorized in one of the following four ways:

  • Waste of material
  • Waste of capital
  • Waste of time
  • Lost opportunities

Over the years we have learned that the greatest waste tends to fall into the fourth category – the lost opportunities. These lost opportunities are most often due to sales that were not made, either because we didn’t discover the opportunity or because we lost to a competitor. Some of the lost opportunity can also be traced to sales we made at sub-optimum margin.

Over the next few posts we’ll look more closely at ways to improve the sales process and, in so doing, ways to reduce the number of lost opportunities.

Where is the Waste in Your Sales Process?

As you may have realized, the largest waste in most  commercial or industrial organizations
is in the sales area.

This perspective is explained in much greater detail in our handbook, Chasing the Waste Out of Sales,  But simply-stated, this waste tends to be a result of:

  • Lost gross margin that results from sales not made
  • Sub-optimal pricing
  • Excessive costs and unnecessary expenses in and affecting the sales process

Yet we’ve found that most companies working on process improvement tend to focus on manufacturing or administrative functions, either because they think there is more to be gained by improving these processes or because these are areas in which activity metrics and similar numbers are more readily available.

But the sales process can (and should!) be treated just like any work process; and whether you are a sales professional, sales manager or business owner, identifying and quantifying the waste in your sales process could be the best way for you to significantly impact this year’s revenue and profit numbers. To begin, consider the following questions:

  • How much time is spent speaking with or pursuing uninterested or unqualified leads?
  • How often are discounts given because of delivery delays or quality issues?
  • How often are discounts given as enticements because buying criteria are misunderstood?
  • How often are proposals rejected because they fail to align with customer needs?
  • How much time is spent expediting orders or handling errors?
  • How much time is spent dealing with customer service issues due to misunderstandings or fulfillment process complexities?
  • How much time is spent trying to collect on unpaid invoices due to incorrect addresses or discrepancies in the amount billed versus what customers expected?
  • How much time do sales personnel spend working on administrative tasks versus selling tasks?
  • How much money is spent on marketing materials that end up in the trash or don’t generate expected results?

All of the above-listed questions refer to process waste or, more appropriately stated, opportunities for improvement.

Of course other opportunities for identifying and eliminating sales process waste exist within account management or territory management plans, as evidenced by research presented in The New Rules of Sales Enablement, by Jeff Ernst, indicating that 65% of the average sales rep’s time is spent not selling .

In addition, beyond considering the number of sales calls that are made each day (we are keeping track, right?), what about the effectiveness of those calls?

What are the variables that impact the quality of each sales or business development call?

Why is it that some calls work out better than others, even when the customer profiles, needs and circumstances are similar? What causes the variation? How can we measure it? How can we reduce it, so that we can improve conversion rates of benchmarks such as calls-to-identified-opportunities or quotes-to-orders ratios?

If these questions have convinced you to take action, here are a few ideas for first steps:

  1. As with all improvement efforts, begin by gaining senior management’s backing and visible support.
  2. Gather data on sales-related activities to identify and chart waste of time, waste of material, waste of capital or waste resulting from missed opportunities.
  3. Use the charts to identify and measure direct and related process variation.
  4. Gather customer feedback to better understand how the process can be improved to better meet their needs and priorities. For example, we may find that our proposals are not being accepted because our offers don’t ideally-address customer needs; this would be a good thing to know so that we don’t decide to unnecessarily lower prices instead of improving our need-assessment process.
  5. Create a culture of improvement with the sales organization by raising awareness levels with respect to the above-referenced metrics and by measuring and rewarding desired behaviors.