Are Your Business Problems Rooted in Your Sales Process?
The lack of a sound sales and marketing process is responsible for a variety of business pains. Wild swings in order volumes around the close of accounting periods, for example, disrupt production schedules. Inability to forecast orders in the short term (or in the long term) can make planning efforts pointless.
These problems have deep roots that cannot be removed with discounts or incentives or punishments of any kind. The problems stem from the fact most companies still manage sales and marketing as functions, not as processes.
This isn’t a criticism of your company’s executives – everybody does functional management. It is still taught in all the best universities. Yet, until this philosophy is changed, your sales and marketing teams will not be able to break the self-defeating patterns that have developed over the years.
Now, every company is different, but generally the functional management approach describes a situation in which:
- The marketing department does good and reasonable "marketing activities" (which probably haven’t been proven to help salespeople sell), and
- The sales department is held accountable for generating the amount of revenue demanded by senior management (not the amount of revenue their process has shown the capacity to produce in their markets).
In this state of affairs the sales department is managed based on results alone (often in heavy-handed ways). Sales departments are left to their own devices to find enough prospects, make enough deals, and push enough product through the door. It is where their reputation for creativity comes from. Life is not too bad in a good market. Yet life can pretty much be hell on earth in a bad market.
Often, the incentives, discounts, and other tactics sales departments use to try to meet their targets end up robbing future business to make short-term targets. Worse, they end up training buyers to wait until the end of the accounting period so they can get discounts, bundled pricing, or whatever.
Managing the sales department for results causes these aberrations because it focuses people on the wrong problem. It doesn’t focus on customer problems we might solve at higher margins and a level production flow. Instead, it focuses on alleviating our short-term pain of making our numbers this accounting period.
Rather than learning how to change our process to improve its value, salespeople are paid to make deals that get people to buy something, anything, today. Yet, whose job is it to focus on the longer term goal of making sales easier? If the answer is no one, making sales just gets harder and harder instead.
How do you fix the problem? Just as if you had to straighten out a problem-ridden production plant, you have to start with the basics. In a production plant, you look at what is going on inside the four walls of your facility. What do we produce? What is our process? How can we break down the interim stages of production so we can figure out where our bottlenecks are, and deal with them appropriately?
In sales and marketing, you look at what is going on inside the customer’s business instead. What problems do they have? What workarounds have they tried, and at what cost? What stages do they go through as they struggle? Who is affected, and how can we help them?
The sales process exists in the field, and it has to be defined in the field, with your marketing and salespeople and their managers. They need to begin thinking of their work in terms of what they can do to create value for customers today, and what actions they can get customers to take today. In fact, a series of actions is the production result of effective sales and marketing. Placing an order is only one of those actions, and is usually driven by previous interactions.
Shifting to this mindset is every bit as valuable as the cultural shift that began in production plants twenty or thirty years ago. It means the sales channel does not (and should not) need to introduce aberrations in demand. It also means your company may have to deal with organizational change issues around the sales process, which can be tricky.
If this is of interest to you, there is a lot more to learn. In fact, I’ve written a book about it: "Sales and Marketing the Six Sigma Way." I think you’ll enjoy it!
July 18, 2006