A Forty Percent Profit Increase With Fewer Proposals
You’ve spent over $75 with me. When the book arrived, I’m sure it landed on your desk with a thud.
Now my job is to make things as easy as possible for you. For example, a medium sized B2B company started working with me a few months ago.
Fast forward to today: They expect profits to increase by 40% this year. In their business that is almost $3 million annually.
This will happen while the team does less work – revenue will easily increase 12%, probably more, while they produce fewer quotations and proposals than before.
I thought you might enjoy their story.
A Sense of Frustration About Growing Revenue Profitably
Let me introduce you to Frank. He works for a 70 year old manufacturing company.
A few years ago they implemented some lean practices, and launched a hugely successful new product. Last year he was promoted to VP of Sales and Marketing. In his case that includes parts and service.
The group of sales engineers he inherited was talented, strong-willed, and somewhat frustrated.
It was their responsibility to deal with requests for quotes from every friend and acquaintance in the industry.
It wasn’t the lack of time for handling the emails, calls, and meetings that was frustrating.
It was the internal battles they constantly faced: “Why can’t we ship on time?” “Why has our quality gotten worse?” “Why do our prices have to be so high?”
When customers asked for something outside the company’s specifications, the sales team needed to request modifications or special designs.
Unfortunately, the company’s engineers and production managers were disinterested before the sale. They would approve or deny requests when they felt like it.
The struggle started after the orders came in. Production and engineering would reject the ones they didn’t like. Then the relationship between sales and manufacturing operations felt almost like war.
The Decision to Improve
Sales felt the pain of increasing completion around the world. Margins were frustrating. Forecasts were not reliable.
And Frank knew there was even more to the story. The sales team knew they had problems too.
Fortunately, the company was serious about becoming “Second to none among our customer’s suppliers.” The lean process initiative had shown striking results. They were committed to improving.
Frank thought applying lean process in sales and marketing could be huge.
One of his options was to keep working in the same manner as always. The same amount of time would pass. Why should results be any different than they had always been?
Why not try this new approach? The answer was easy. It seemed risky. He had no experience designing a sales process, much less setting up useful measurements. What if he screwed up?
- How could he possibly get the sales team on the same page with bitches and opinions flowing hot and heavy all the time?
- How could you tell what changes would create improvement? Where should he even start?
- Was increased discipline the right approach? Was it even possible?
Almost immediately after Frank started working with SPC, Inc., we gave his team a constructive new way to think about their problems. There was a way of reconciling different perspectives.
Even the perspectives of some of the other departments. It took a few meetings, and in the end they achieved a remarkable amount of internal agreement:
- They made the flow of sales opportunities visible.
- They now have a consistent way of prioritizing their opportunities.
- Forecast accuracy improved immediately.
Most importantly, everyone in the company now knows the point when customer specifications must be approved, or rejected. And that point is before the order is accepted.
Less time is wasted on internal battles. It is easy to see when a salesperson does a good job. More time is spent on the right customer deals. Less time is spent on the wrong ones.
They can see that profit margins will increase by an average of 1% this year. They expect a 10% increase in close ratios. That means nearly $3 million in additional profits for this company.
Steven, the Sales Director, said:
“Our sales process mapping work turned out fantastic. I can’t believe how quickly you got the sales team aligned to the approach, and how much we got accomplished in such a short time. Great work!”
Bret leads one of Frank’s four departments. The other three managers look forward to similar gains. Since they have a clear idea which improvements to focus on next, the sky is the limit.
Frank’s boss is the company’s president. They often present together in front of the rest of the management team and the board of directors.
Now, their projections and recommendations are based on honest evidence. No more guesswork. Less hedging. More confidence.
Where would you like to be in three to six months?
Hopefully you made the progress you wanted to in the last few months. The question is where would you like to be in the next three months?
The time is going to pass anyway. Is a sound process key to your success?
Do you need a breakthrough like Frank had? Do you need to align your sales team, like Steven did?
If so, please contact us to set up a time we can meet on the phone to discuss your situation.