How Lean Is Your Sales Process?
“Lean Thinking” (by James Womack and Daniel Jones, Free Press, June 2003) helped galvanize a radical approach to managing manufacturing organizations that smooth’s out production flow, making it far more productive and responsive. Inevitably, some people wonder if “Lean thinking” could apply to sales and marketing—whether it could smooth out customer order levels and make demand more
“There are basically two ways to think about leaning the sales process,” wrote Jim Womack in answer to a reader’s question: “One is to examine the process itself—how sales are made and orders handled.” The other is to look at the artificial “incentives built into most selling processes” that cause uneven demand, such as bonuses to salespeople and discounts to customers.
Although he is correct, there is much potential in examining “how sales are made” that Jim didn’t address. Doing it right synchronizes with customer needs in powerful ways that drive higher profitability. This article will provide a brief introduction and some examples.
Sales and Marketing Problems Waste Energy and Profit
Unfortunately, wasteful sales and marketing activities tend to happen in companies everywhere. Here is a list of things customers would probably not be willing to pay for (muda):
- Developing and launching products that fail to address real customer needs. (“We’ve got too many blue widgets in the warehouse. We need you to sell blue widgets, darn it!”)
- Advertising and “brand awareness” campaigns that create no measurable customer response. (“Our competitors are spending a million, so we better also do it to maintain ‘parity.’”)
- Talented marketing communications people writing product-focused collateral and newsletters that nobody reads.
- Marketing campaigns and trade shows that generate large numbers of “leads” that do not get followed up by salespeople (“Why don’t salespeople do their jobs and follow up?”) and are not qualified prospects in any case.
- Salespeople chasing “anything that moves” in their territory, thus spending time selling to the wrong prospects.
- Salespeople spinning their wheels generating proposals that do not get customers to buy.
- Service departments that repeatedly see the same customer complaints that could be eliminated if the product were improved, and yet that information never seems to make its way into the requirements for new products.
Chances are you’ve seen one or more of these problems in your company. Sales and marketing departments are trying to bring in customer orders, and of course they want to do it as efficiently as possible. No marketer wants to release bad products. Campaigns and tradeshows sometimes do produce qualified prospects. Yet despite all the brainpower, hard work, and resources expended on these important business functions, the problems still happen. What can be done to solve this dilemma?
How Lean Is Your Marketing and Selling Today?
Lean thinking addresses this dilemma by posing an extremely interesting question: “What value does your process create for the customer?”
As a sales manager in 1989, when I first asked myself this question in regard to the sales process, I distinctly remember the feeling of hairs standing up on the back of my neck. I didn’t know the answer then. However, I do now, and you need to know it too.
One of the primary problems of sales and marketing today is that they continue to be viewed as separate, independent functions. Lean manufacturing is united by the principle of eliminating what the customer will not pay for.
Sales and marketing should be defined by the same purpose, don’t realize that failure to look at these functions as the integrated system. Once you realize that prospects and customers pay for things with attention, their time, and their information long before they will pay for them with their money, you see that anything that does not cause those actions is waste.
To the extent that your ad campaigns don’t generate a response, and your salespeople’s proposals don’t generate customer agreements, you are generating waste. By definition, you are not giving customers what they want.
How to Solve this Dilemma
The way to solve this dilemma is to realize that everything you do to find, win, and keep customers should be creating value for them, and that value should be measured in terms of the actions those customers take. They are the productive results, the evidence that value has been created.
What would it look like if your company’s sales and marketing processes themselves were valuable to your customers all by themselves (i.e., apart from your products and services)?
Here are some examples:
- Your company’s marketing communications, advertisements, and newsletters would address urgent, felt needs of your prospects and customers. They would contain application examples and credible cases from your customer base, because prospects want to understand the results your customer’s experience.
- Your interactions with prospects and customers would be designed to sort them into various channels according to their specific interests, level of need/urgency, and influence/ability to make decisions. This enables you to provide more of what they are specifically interested in and less of what they aren’t interested in (or can’t do anything about).
- With this level of insight into your market, you can help people take the actions that move prospects toward solving their problems while also moving you toward a return on your investment. Perhaps you steer all but the most qualified opportunities away from your expensive sales force to lower cost-conversion techniques, such as Web pages. Or, perhaps you systematically install proven lead generation processes in additional geographies to help more of your distributors and manufacturer’s reps take advantage of the market opportunities in their area.
- Salespeople have tools helping them assess the quality of their leads and opportunities and have specific and proven approaches for dealing with variations in the quality of the opportunities in their pipeline, leading to a more predictable sales forecast.
- The right prospects would look forward to getting some of your salespeople’s time (and in some cases, potentially even be willing to pay for it), because they know their time won’t be wasted, and no one will be twisting their arm to do things they don’t want to do.
- Customers who buy your products and services would be so delighted with your company’s commitment to their success they would readily provide testimonials and case information for use in you lead generation efforts.
If this sounds like a dream world, think again: one or more of these characteristics are apparent in any truly successful company’s marketing, especially if it is long lasting.
Creating value for customers in the most efficient, effective means possible is the essence of Lean.
Michael J. Webb
July 31, 2007
I agree to all statements above. One topic seems to be overlooked all the time. Compensation and benefit plans of either the sales or marketing department don´t allow for a close aligment of processes. Marketing executives will earn more money if they increase brand awareness and leads. Regardless of the sales capacity and the quality of the leads. Only a process organisation where it is regardless if one works in marketing or sales will overcome the problems described above.