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By Michael Webb
You can achieve quick sales improvements if – and only if – you know which part of your sales process is broken, and how to fix it. Let’s take a quick look at how poor business managers go about this, and then examine the right way.
What part of your sales process is broken? (And how do you know?)
Most businesses don’t actually know what part of their sales process is broken, they only think they know. For example, I once worked with a senior executive who told me:
“The problem with our sales process is ...
they need time and territory management training.”
His statement was loaded with errors. His first mistake was naming a solution instead of a problem. His second was having no data to back up his assertion. So, he was left to act on gut feel.
On his feeling he implemented the time and territory training. Sales did not increase. In fact, sales went down. Money was wasted. Time was lost. Confidence in his leadership was shaken. This sort of thing happens all the time in sales and marketing, unfortunately.
To know which part of the process is broken, you need data about the flow and quality of sales opportunities. If you don’t have this information, it means learning what is happening as salespeople pursue their live sales opportunities. Sales opportunities are similar to the flow of inventory in a production plant. However, to get that information and to position yourself to put it to good use, you must first do a bit of foundational work. It is not difficult, but it does take a nose for data as well as for value, and some knowledge.
Here’s an outline of how to go about it.
Sales Process Improvement #1:
Identify the Value Stream
The most crucial thing that must be understood, whether in a production plant or a sales operation, is the flow of value (what Lean would call the “value stream”). In a sales process, that tells you why customers and salespeople do what they do or fail to do what you expect them to do.
To begin with, you must identify the stages of customer-facing work. Customer value is defined by the Customer Journey: the stages your customers go through as they attempt to solve their problems. When you know the stages customers go through, you can define the necessary sales work more precisely, and find reliable measures around the flow of sales opportunities. Those measures will give you the data you need in order to know what’s going on in your sales process.
There are three high-level stages in the flow of daily sales work: finding, winning, and keeping customers. These stages parallel the Customer’s Journey. Generally speaking, the Customer’s Journey consists of understanding the problem, prioritizing the problem/solution, and solving the problem. (The specific details of the actual work within these stages and on this journey vary immensely across industries and markets.)
This concept alone can help you go a long way toward diagnosing what to fix in your sales process. For example, it can help you distinguish value added from waste:
Aligning what your company does to help your prospects and customers buy is a crucial step toward eliminating waste and improving close ratios. One chemical company got salespeople to stop sending samples to any prospect with a pulse by simply requiring that basic qualification criteria be met first. Of course, salespeople objected. Then close ratios improved by 20%. In the right circumstances, similar results have been achieved by raising qualification requirements for product demonstrations.
If the problem is not enough deal flow, or low quality deals, it is wasteful to offer promotions and discounts to buy. On the other hand, if there is enough deal flow and you aren’t converting deals into customers, it makes no sense to try to generate more deals. Unfortunately, companies tend to react to poor sales results based on what they have done in the past instead of what is actually happening in the market. It costs them a fortune.
In an effort to focus salespeople on prospects that are “sales ready” rather than “tire-kickers,” some companies attempt to institute lead generation and nurturing campaigns. Salespeople, especially at distributors, often resist this kind of change, because it feels like something is being taken away. They feel the more deals they are involved in the more likely they are to get some orders.
However, this is a training opportunity for their leaders and managers. After all, the job of sales is to ask questions that uncover real value for the customer and for the seller, not to chase mere possibilities. Not all sales opportunities are created equal. If salespeople cannot find a way to increase the quality of an opportunity, they must be trained and incentivized to walk away. Else, waste and time cannot be reduced.
So, what does a high-quality sales opportunity look like? This brings us to Sales Process Improvement #2.
Sales Process Improvement #2:
Define Observable Characteristics of High and Low Quality Opportunities
Salespeople know they need to qualify their sales opportunities. Yet they have rarely defined the quality of their opportunities with the discipline required for proper quality management. The “quality” of a sales opportunity is another way of saying the “likelihood of your sales effort being successful.”
What does a proper definition of the quality of a sales opportunity require?
The scientific method depends on facts and evidence: observable things. Can salespeople come to an agreement about the observable characteristics which make their sales opportunities more or less likely to close?
Discussions about observations regarding prospects’ characteristics are usually quite engaging for salespeople. They typically learn from each other and gain insights about their common sales challenges.
For example, the stage of the Customer’s Journey can be defined in terms of actions the customer takes. Characteristic statements and behaviors of decision makers, coaches (or sponsors), and blockers (or gatekeepers) can be observed. So can characteristics indicating the prospects’ “pain points” and their level of need for your products and services.
Simply put, defining the observable characteristics of deal quality can have a huge effect on improving your sales process and its results:
Salespeople embrace this approach when they can see how it helps them sell. Best of all, once they define and apply a set of criteria to their prospects, they will learn from the experience and want to improve the criteria. Smart managers leverage this desire by enabling salespeople to record their observations via a scoring check sheet (sales trainers sometimes call these “opportunity planners,” or “account planners”). Analyzing data collected in this way drives much insight to the sales process. For example, there are usually one or two questions that have far more impact on the outcome than salespeople realize. This observation-oriented approach is also the secret to incredibly accurate sales forecasting, and the resulting base of information opens doors to many other improvements.
What kind of improvements? This brings us to Sales Process Improvement #3.
Sales Process Improvement #3:
Using Data from Field Operations to Improve
The sad fact is most businesses are currently “unconscious” of what salespeople (or distributors, resellers, and other channel partners) are actually doing to produce orders. Until they have defined their value stream and the operating definitions of their terms, there is no way they can know what is going on in their sales process.
Once they have identified the value stream and elevated the language salespeople use to learn about their daily sales work, they are positioned to begin making data-driven decisions about the location of impediments to sales, and how to remove them.
Once you have identified the value stream, and you have proven out specific measurements telling you where the impediments are, you can shed light on the target. For example:
As we said in the beginning: if you don’t know where the problem in your sales process is, you won’t be able to fix it.
However, if you have common business sense and a nose for data as well as for value, you can likely find quick solutions to your sales problems.