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How Many Sales Process Steps Do You Need to Analyze Data Effectively?

by Michael Webb | Comments (0)
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Gary Barnes posted the above question on the Linked-In Group “Sales Science”. He added,

There seems to be an age old struggle between operations and sales on how discriminating a sales process should be. The more sales steps the more insight operations and sales leadership can gather on the current pipeline, but the more steps that are in the process the more updating sales reps have to do. "Do you want me selling, or entering data," is what we hear from sales reps. What are your thoughts on minimum number of steps that should in a sales process to have a minimum amount of discrimination?

When someone says “Do you want me selling, or entering data?” you can be sure you have approached the sales process problem in the wrong way. Whether in sales or in manufacturing operations, a process only works if it adds value for the people doing the work.  If it doesn’t help salespeople sell, the process is wrong. Period.

The objective of manufacturing is to meet the specification. The objective of sales is getting someone you may never even meet to take an action - to pay attention to you, for example, and ultimately to give you their money. These are very different things, which is why manufacturing operations has such a hard time understanding how sales and marketing works.

However, they both are production systems, and so can be improved.  In manufacturing it is the flow of raw materials, work-in-process, and finished goods. In sales and marketing it is a minimum of three steps: finding, winning, and keeping sales opportunities. The key issues are to be able to identify the quantity and quality of the flow of sales opportunities in a way that actually helps salespeople sell (and does not hinder them).

Quality is the observable characteristics of sales opportunities that makes prospects more or less likely to buy from your company.  The flow of deals requires tracking the input (e.g., number of sales opportunities meeting a certain minimum quality criteria), and the output (e.g., number of deals won, lost to competitors, or lost to no decision) in a given time period.

The first problem is sales and marketing people are asked to focus so much on the end result, they are not very analytical or precise about how the work is done. They usually have no idea why they should be measuring any of this. As they start being precise, analytical, and measurement oriented, there is a great deal of learning and improvement that happens. For example, the common language that develops increases the consistency of how salespeople deal with their customers (and showcases the problems from being inconsistent, such as trying to close poor quality deals, or screwing up high-quality deals). For another example, a process approach can prove the case when the root causes of salespeople's problems are outside their department and out of their control).

The key is, no matter what level of sophistication your organization's people are, they can get better. Improvement never stops, and process methods enable everyone to focus on the kinds of data and evidence that actually enable that improvement.

I have never met a professional salesperson who did not respect this approach when done properly, led by sales and marketing people themselves to generate respectful agreement about how their job should be done. I have met many salespeople who (rightfully) are fearful that their company will screw things up by forcing a misguided process on them. It is unfortunate, but most companies fail to take the kind of rational approach I describe, and so design their CRMs, compensation programs, sales training, etc., quite poorly.

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