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Are You Improving Your Selling System? (Or Repeating the Same Old Grind?)

by Michael Webb | * Comments (5)
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Some people have a choice in the way they approach sales and marketing: They can work IN the production system, or ON it.

Salespeople are inherently IN the system. Their job is to do the best they can to get prospects to a successful conclusion as effectively as possible.

Sales and marketing managers often view their jobs in a similar way. When they think of improving performance, they think of ways to get more (of the same things) done.

Figure 1 shows contrasts working IN your production system vs working ON your production system.

Figure 1

Manufacturing executives understand this quite well. Sales and marketing executives, and company presidents often don’t realize the difference, unfortunately.

Getting More Sales Output From Less Input

Automation is a great way to get more output from less input, regardless of what you are producing.

Every system has its limits, however.

  • Manufacturing:
    The fancy control system might balk when changing over to different products. The parts made the new way might not take paint consistently, or might become brittle after the product reaches the customer in some cases.
  • Sales and marketing:
    Bigger marketing campaigns and more customer “face-time” may not translate into more qualified prospects or revenue. Contact management software may save admin time for some salespeople, but does this translate into better sales?

Systems inherently have interdependencies that limit their productivity. Productivity can be improved only through a better understanding of how the system works.

Working ON the system means learning how the system works, so you can figure out how to get more of the good stuff and less of the bad.

Working ON the Sales and Marketing “System” is Profitable!

Examples of this are everywhere, once you get the hang of it.

  • Fewer Deals, Higher Quality

    One client’s salespeople struggled with a huge sales funnel and a dismal close ratio.
    The problem? Management assumed everyone knew what “qualified opportunity” meant. Not so!
    The solution? More precision in their qualification criteria produced a 300% increase in close ratio, because salespeople could prioritize more precisely.

  • Aligning How You Sell To How the Customer Buys

    Another client’s salespeople liked to do demonstrations because their systems solved lots of problems for people who used them. Yet they had to “get out the bulldozer” to push most deals further into the future every quarter.
    The problem? Executives who paid the freight had different agendas from those using the system!
    The solution? A sales process that prioritized interactions with decision makers over end users. More demanding on salespeople for sure, and a thinner sales funnel, as well as a 27% higher close ratio, and 23% reduction in cost of sales.

  • Gaining Cooperation From Salespeople

    A custom plastics company wanted to win “base hit” deals with lots of medium and small-sized customers. Salespeople liked to chase newer, bigger leads, yet were not making plan regularly.
    The problem? Salespeople followed up on leads at their own discretion, sometimes dropping small, uninteresting deals in favor of new leads from big, marquis prospects.
    The solution? Dispense five to seven leads at a time, and require salespeople to complete the process to a certain point on each in order to earn the right to get more leads. Salespeople started making their numbers regularly, forecast accuracy increased, and profitability of the company increased by more than 3%.

Its Time to Start Improving Your Selling System

You can’t improve "the system" by repeating the same old grind. That is working IN the system, where the ability to improve productivity is limited.

Instead, start by trying to understand your inputs and outputs. Everyone starts without much of a measurement system, but pretty soon it gets easier to measure things and analyze activities and results.

This is what helps you to understand the 20% of causes that produce 80% of the results. That's when you can start working ON the system - rearranging how the system works to maximize results.

Working on the sales and marketing system is the among most profitable work that can be done in a company – far more profitable than just repeating the same old grind!

Michael J Webb

April 7, 2009

5 Responses to “Are You Improving Your Selling System? (Or Repeating the Same Old Grind?)”

  1. Srinivas Darbha says:

    It's a great insight into WorkIn & WorkON (explained so wonderfully). For me WorkIn is like Efficiency and WorkOn is Like Effectiveness (Result focused),in a way,may not be exactly.

    Thanks and regards,

    Srinivas

  2. Michael says:

    Thanks, Srinivas. Efficiency and effectiveness have specific mathematical meanings. I'll have to look that up to see how those might apply to working in vs working on the system. Hmm...

    Michael

  3. Becky Smith says:

    Anyone who follows direct response marketing guru Dan Kennedy will agree totally with this idea. His missive "Work ON your business, not IN your business."

  4. Sean M Foley says:

    Great insight Michael. I am in sales and as I was driving to see my next cient I was wondering how Six Sigma would be applied in a sales process. I am currently in a Six Sigma BB certification program and am always trying to plug in the "formulas" to what I do. You are correct in that there are several aspects that are not quantifiable in sales. I compare these to suppliers in a manufacturing enviornment. (eventhough a company is neck deep in a Six Sigma deployment doesn't mean their suppliers are as well.) However, the measurable aspects within sales, I feel, are what really need to be addressed. There is no "magic wand" that any salesperson can wave to make the customer buy. Though the processes that get a sales force to the customer and the content of the "pitch" can be streamlined. Addressing the "Method" whereby the team goes to market may be the best way to apply Six Sigma within a sales team. For the last few months I have been thinking how to fit Six Sigma in what "I" do a sales rep (probably my first mistake being that it is not prompted from any upper management. My first inclination is to try and measure "who" my customers are and what % of them I have as customers. Of those "customers" what are they % of product mix do they have from our offerings and so on. As a small distributorship, and having been the best performing rep (up 19%) for Q1, I have 2 questions...1)How do I approach "the Boss" with my newfound performance and convince him that this is the way we "all" should do business? 2)Once I become certified as a Six Sigma BB, how do I find career opportunities within other sales organizations who seemingly haven't embraced Six Sigma. Or at least I haven't found any yet.? Thanks For your input on this topic.

    Respectfully,

    Sean M Foley

  5. Michael says:

    Sean,

    There is what you do as a salesperson to get sales results, and then there is the environment your sales team "lives in."

    These are two different things. As one of the production workers "IN the system," there is only a limited effect you can have "ON" the system.

    One of the most powerful things you can do is to make sure you scrupulously identify and articulate the concrete observable characteristics of your prospects as they progress through the sales cycle. This is the right way to do what the sales culture calls "qualification criteria," and the quality culture calls "attributes." You can begin correlating these attributes to the win/loss/no decision outcomes.

    It takes a while to get enough data to be meaningful (which is why you ideally need a team of people doing it). However, when you do, you'll learn some important things, and you'll have made great progress helping your team be more evidence based and scientific.

    You might just demonstrate some credibility building traits your boss and others in your company will appreciate as well.

    Hope that helps.

    Michael

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