Evolving Your Sales Process: The Four Stages to Becoming a Market Leader
Thanks to some of you for your calls regarding the weather here. We got lucky: The weekend storms hit south of us, in downtown Atlanta, and north of us, in the Cumming and Gainesville areas.
While the storms were coming through, I wanted to swap the cars in the garage. If one of our cars would be damaged by hail, it should be the old Mazda we’re saving for when Kira (our 15 year old) starts driving actively. Leslie thought the risk was low and resisted.
I prevailed, and 2 hours or so after the swap, the weather had cleared, the sun was shining, and there had been no hail.
Then, when I next looked up from my desk, giant hail was coming down in the backyard. I ran upstairs to find Leslie, and there, in the driveway, my car was getting pounded.
Ever wanting things in proper order, Leslie had returned my car to the driveway!
In a scene reminiscent of the Keystone Cops, we grabbed umbrellas and dashed out to re-swap the cars. The hail lasted a remarkably long time. Fortunately we avoided any real damage to either car.
I guess that goes to show the difference between perception and reality. Leslie hates it when I’m right, of course, but for a while it looked like I was wrong.
People (and especially businesses) need a clearly defined way of knowing the facts. They need to give it careful thought, observe how well their method performs, and correct the method when it errs.
This is one of the hallmarks of a good sales process as well. A good sales process is the result of sound thinking to identify what we know and especially how we know it. That insight is what leads to this week’s article.
I look forward to hearing your thoughts about it.
Until next week.
March 19, 2008
Evolving Your Sales Process: The Four Stages to Becoming a Market Leader
Children go through developmental stages as they grow up. They are physically and psychologically important, inevitable, and predictable. Similarly, customers go through stages in their buying decisions. And, sales and marketing organizations go through stages on their way to improving performance. These stages are all also inevitable and, fortunately, a lot more predictable than you may think. Understanding them helps explain what is holding your company back and what you can do to help it advance.
Stage One: Tribal Knowledge
This is the stage in which little thought is given to sales or marketing. It is characterized by:
- Minimal sales language, technique, sequence, or system in common
- Difficulty articulating the process
- Marketing operates independently from selling
- Service is seen as remedial at best
- Forecasting is weak (impossible?)
- Success is dependent on heroic efforts of certain individuals
This stage often exists when a company has the right product in the right market at the right time. Revenue and profits flow, and the sales process consists of “whatever it takes to get the business, and get it shipped.” So long as demand exceeds supply, companies in this mode can survive and profit. They have no need to get analytical about the customer, or anything else, unless their problems start getting too painful.
Assuming some level of market demand exists, the painful problems managements have focused on have been production problems. Process improvement methodologies (Lean, Six Sigma, and Theory of Constraints) emerged as a means of solving those production problems. The underlying ideas and logic of process improvement are right; they work. The biggest challenges are not the analytical or scientific ones; they are in leadership and organizational change.
Yet when some level of demand can no longer be assumed, companies feel pain from uncontrollable portions of the income statement (SG&A). Leaders can’t drive a sales and marketing strategy with confidence because their assumptions about the marketplace, their customers, their products, or their people are too often wrong. Conflicting world views of marketers and sellers cloud the problem. Predicting the outcome of any given initiative is difficult. Data with which to make informed decisions do not exist. Pressure to improve performance and accountability increases.
Whether the pressure comes from competition or from visionary leader, the only alternative is to begin working on the sales process (finding, winning, and keeping customers). When this happens, the organization moves into Stage Two of the evolution of their sales process.
Stage Two: Emerging Sales Process Awareness
- Someone articulates the sales process for the group
- The focus is on internal stages
- CRM or sales training may be tried
- Some improvements from common language
- Salespeople (and managers) ignore the process as they see fit
- Forecasting remains a guessing game
- Difficult to generate hard data
- Marketing remains focused on products and brands
- Marketing feels overwhelmed when drawn into tactical responsibility (like lead generation)
The person who takes the “bull by the horns” to define the process can be anyone. Sometimes it is a vice president. Other times it might be an analytical or outspoken salesperson or a team whose charter is to set up as sales training or CRM software. Often there is some improvement, people respond positively to more precise language about the sales process, and perhaps some of the new tools help them sell more effectively.
However, this critical first step is a frustrating one for most companies. Many make the mistake of assuming the sales process is “about what salespeople do,” and thus ignore the roles of marketing and servicing. Yet, if those roles aren’t somehow helping generate revenue, what good are they? Process definitions can feel oversimplified to salespeople, yet what is the point of increasing its complexity? Virtually every element of customer interaction depends on salespeople. Scratch the surface and the “sales process” is a bewildering mare’s nest of responsibilities and complications. And the company’s life depends on it! Often the company’s best and brightest minds live it and breathe it.
It takes a while for things to sink in: “Well that ‘sales processes might work for some people, but it doesn’t work for me.” “It might work for little accounts, but not for big ones.” “Hey, I guess we really don’t understand what salespeople do.” “Our process actually makes it harder for salespeople to do their jobs, not easier.” “Maybe we should try to force some kind of compliance?” “So long as salespeople bring in the revenue, we’ll just have to deal with their lack of structure.”
The disconnect between the process definition and the real world means investments in CRM software, sales training, marketing campaigns, and product launches continue to “float” with unpredictable results. Executives are frustrated by apparent compliance issues with salespeople. Managers continue to manage “by the seat of their pants” (because they have little choice in the matter). The functional mindset makes changing things difficult.
Getting out of this stage of evolution is difficult because, while everyone agrees things need to change, nothing seems to work. Who knows what the changes need to be? People (and companies) find ways to live with the pain, until the pain gets too great. Competitive pressure can force companies to find an alternative or start shrinking.
When market demand is not assured, customers have the power: They have free will to do what they want to do. Fortunately, it is possible to gain insight to what they want and how they go about solving their problems. Eventually, when the pain becomes great enough, someone may begin paying attention.
If that person is an executive who can affect change, the company can move on to the next stage of development.
How to Turn Your Sales and Marketing Into a Lean Six Sigma Production Machine That Runs Like Clockwork (And Do It in a Way Your Salespeople Will Love!)
Stage Three: Sales Process Aligned with Customers
- Focus changes to the customer
- Process is designed backwards from the customer’s stages
- The process attracts the customer to take the next step
- Instead of “rushing” the customer, relationships are nurtured until they are ready to take the next step
- The customer’s actions/progress enable interim results to be measured
- The process begins generating reasonable data:
- Quantity/count and flow by stage
- Quality (observable characteristics correlated to likelihood of close, aka, forecast)
- Salespeople follow the process because they understand exactly how it helps them sell more effectively
Once people realize that everyone’s performance is going to be judged by the customer’s interim actions–what they do and what we can observe–clarifying the customer’s journey becomes urgent and meaningful. Marketing vs selling is irrelevant. If it helps the customer take a step forward, it is good. If not, it is waste.
For example, if media, newsletters, and teleconferences can be shown to educate more of the right kind of prospects to self-select, perhaps salespeople can avoid cold calling and other low-yield activities. More of the right prospects at lower cost to salespeople is good.
Changing the environment so that salespeople can actually spend more time selling (less time not selling) increases the spotlight on their effectiveness. This drives yet another improvement in culture: “How do you know the prospect is serious about this?” and “How do you know they have the kind of problem we can uniquely solve?” become more important than “How many people did you demonstrate and propose to this week?” Accountability for interim results (instead of amount of activities) ensures less wasted effort.
These improvements depend on precise use of language. To achieve these, each salesperson and marketer needs to examine their experiences, internalizing the meanings of words so they refer to the same aspects of reality. Getting everyone in the organization up this curve is hard.
Yet the ROI is huge. It establishes common ground between the interests of the customer, the marketer, the salesperson, and the company. It provides a concrete framework for distinguishing value add from waste (did more customers do what we wanted them to do or not?). It coordinates everyone’s skills and knowledge. It throws off enormous amounts of hard data, traceable to facts.
Once that happens, the next phase of evolution is not far behind.
Stage Four: Rapid Learning and Improvement
- Robust process management identifies characteristics of deals that flow faster
- New ideas, marketing, and selling tactics surface often from the field
- Improvements are well thought out, field tested, and deployed consistently
- The sales process evolves slightly ahead of the market and customers
- Sales, marketing, and customer service jobs are define with no discernible “gaps” or lags for customers
- All interactions add value in the eyes of the customer, often surprising them with new features
- The company is viewed as a “pleasure to buy from”
- The company commands a premium pricing position
At this point sales managers have a comprehensive view of deal flow, bottlenecks, and competitive opportunities. Sales managers can act like managers, selecting tactics appropriate to their conditions rather than just chasing deals. The nuances of the process become proprietary to the business, because the unique knowledge available and the competitive advantage that knowledge creates become obvious
CEOs no longer need to constantly check in on sales performance issues, because they already know the results, the reasons for the results, and have confidence that the right actions are being taken. Their “face time” with the sales and marketing lead team shifts to more strategic issues of far greater weight, such as improving the next product launch or creating better market intelligence.
This is the future, and it is a much healthier and happier world than what most executives have experienced in their corporate lives. Not because the work won’t be hard, but because it will be focused more on getting the right information to solve the right problems for the right people and less on the politics of personality and power.
Michael J. Webb
March 19, 2008