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When markets, technologies, or personnel change, sales departments that have run well for years can have a rough time. When too many deals go to “no decision,” and no one can predict which accounts will buy, the traditional “black-box” mentality of the sales department becomes a problem that needs solving.
Of course salespeople do their best to explain what is happening via their stories and anecdotes. Unfortunately, that usually doesn’t solve anything. Worse, these situations are typically not their fault. They are the legacy of the culture that worked in the past.
Yet, there is a way to see inside the sales black box. And like an X-Ray, the results it makes possible are far better than most companies can achieve without it.
One simple change enables this new capability. It is a hallmark of scientific approaches – the operational definition. Operational definitions are an exact description of what words refer to in reality or the procedure used to derive a measurement.
The perfect place to apply them is with qualification criteria. Poor salespeople ignore qualification, and good salespeople obsess about it. Unfortunately most sales departments do not know why they should operationally define them, or how.
Traditional approaches focus remedially on the salesperson. They apply frozen rules to remediate selling behaviors.
Operational definitions provide a standard for observing actual sales opportunities. They assemble everyone’s data into a picture of the system no individual can see. This helps remove the subjectivity traditionally associated with sales. The structures and processes it reveals within the sales funnel enable corrective action that works. This approach illustrates how companies can diagnose a sales funnel like a doctor diagnoses the human body.
Engage the Team
A team begins by confirming what is working, and not working about their current approach to qualification. Then they brainstorm everything they can about their prospects that is a) observable, and b) that might make them more or less likely to buy.
Their criteria should cover anything the sales team thinks is important, such as the prospect’s demographics, location, their urgency or need, access to decision makers. The team then organizes the questions into a list, with a sequence of possible observations from lowest to highest probability of winning the business. An example is below:
- What is the prospect’s decision-making process?
- We don’t know their decision making process
- We know only part of their decision-making process
- The main contact is only one of the many people involved
- A committee has been formed, and our contact has influence
- Main contact is the decision maker/signing authority
A salesperson simply selects the answer that most closely matches their prospect’s situation (as by clicking a radio button). In the background, software can convert their responses into a number, from 1 to 5. The sum of the answers for all questions in the list is a number indicating the quality of the account or sales opportunity.
Sales teams are generally surprised at what they learn. For one thing, since they worked together to create it, the criteria represents a better theory than anyone could have come up with on their own. For another, it is specific to their market and their products and services, unlike most sales training criteria.
This ability to compare and contrast their opportunities reveals more nuanced insights into what other salespeople have learned.
Align the Team
The higher the quality score, the more likely the prospect is to buy. This means sales opportunities can be prioritized, ensuring the best ones get the right amount of attention.
Inevitably, the new prioritization differs from salespeople’s gut-feel approach. Low scores on questions about the customer’s decision making process, the urgency of their need, or their coaching relationships focus salespeople’s attention. Like a checklist, the format points out tactics for improving their chances to win business. Naturally, salespeople try to improve their scores. Their behaviors become more aligned. This alone has a powerful effect on productivity.
What they do not yet realize is that converting their observations into numbers is a profound capability. When enough assessed opportunities have closed, a statistical analysis can be completed. This reveals correlations among the questions that cannot be seen through traditional methods.
This is where the X-Ray comes in.
Change the System
The initial list of qualification criteria are often more than 85% accurate in predicting which accounts will buy. However, the likelihood of buying does not gradually increase with the quality scores. Instead, there is a “tipping point” – a narrow range of quality scores above which there is almost 100% chance of winning the business, and below which there is almost no chance. And there is an even more important result.
If a salesperson has done everything in their power to increase the scores on an opportunity and it is still below the tipping point, this is evidence to walk away. Where sales resources are stretched or productivity is low, eliminating low quality deals from the pipeline is a major productivity booster.
Most importantly, the statistics indicate changes that could create improvement. Questions with low correlation to outcomes can be dropped, reducing the amount of information salespeople must collect. In addition, some questions show reverse correlations, indicating the presence of confusion or missing factors.
That was the case with the example above, about the prospect’s decision-making process. Oddly, the data showed the last response (“Main contact is the decision maker/signing authority”) did not indicate likelihood of winning the business.
Discussions with sales people revealed the team’s first attempt had missed the point on this and several other questions. A redesigned question is shown below (underlines indicate improvement over the original question):
- What is the prospect’s decision-making process?
- They don’t know their decision-making process
- They have one, but we don’t know it
- We have partial understanding but they won’t share more
- We have partial understanding and the will share more
- We fully understand their decision process
The revised qualification criteria achieved repeatable forecast accuracy of 94%. Further, the data also revealed market segments that were responding differently to the company’s value propositions. This provided clues for making the sales process more effective via interactions on websites and in social media.
Operational definitions are one of many areas where the quality and productivity sciences provide powerful tools that make sales easier. Rather than process for process sake, these tools enable sales and marketing teams to identify work they should stop doing, which releases time for work they should be doing.
Process excellence is not about memorizing rules and implementing tools mindlessly. It is a body of principles that engage your people’s minds to discover better ways of winning more of the right customers, at higher margins and lower costs.