SPIF Tip #29: How Operational Excellence Solves Sales and Marketing Problems

I attended a monthly

meeting of the Executive Sales and Marketing Association of Atlanta’s recently. Several executives there lamented about the difficulties of sales prospecting these days. One mentioned his company’s salespeople had to make more than 500 phone calls to find one viable prospect. Others concurred. Once they had a prospect, a thirty or forty percent close ratio reduced the odds that much further.

Boy, did that bring back memories.

The prospecting challenges of then versus now

Years ago I sold minicomputers for a company that was smaller and nimbler than IBM, for a time. Our customers were small and medium-sized businesses. Our product was the first multi-user mini-computer to use the Business Basic language. Just like the kids today who get hired to sell for insurance, payroll services, or startup SaaS companies, we had to call people on the phone to find prospects.

At the time, I was thrilled to get a job in the computer industry. I was told I could make over a hundred grand per year. So to say we “hit the phones hard” was an understatement. Our sales process to was simple:

• “Dial for dollars.”
  Use your best phone prospecting skills to find someone who was going to buy a computer.
• Demonstrate our product.
  There was such as difference, we had a pretty good chance of winning at that point.
• Close the business.
  Do your best to remove any roadblocks preventing the customer from buying.

This approach grew the company for a while. However, by the time I started, the market was starting to mature. Since I had been a math major, I started keeping records for prospecting. Our falling productivity was visible almost immediately. As IBM caught up to us, it became harder and harder to make a living.

We sold what is now called ERP systems to manufacturing companies, and I wanted to learn the business. That motivation enabled me survive in the meat grinder for more than five years.

The company did help us by bringing in a really smart sales VP to drive the transition from selling machines to solving customer problems. I was nimble enough to make the transition, and I invested thousands of personal hours learning my customer’s challenges. Ultimately I was even elected president of the St. Louis Chapter of APICS.org. But that was just me. Most people didn’t make it.

Product innovation did fall behind, but mostly the company seemed ignorant of the critical prospecting problem. For years, less than 0.2% of prospecting calls yielded sales opportunities. When I left for greener pastures, the company’s senior executives were still telling new hires the same big lie: “The key to making $100k is dialing for dollars.”

Neither people nor entire companies can survive very long in that condition.

It doesn’t have to be that way!

If you don’t have a new, proprietary mousetrap the market is dying for, prospecting is always going to be a problem.

However, instead of accepting this fate, there is a way to lift sales productivity out of the gutter: Operational Excellence.

And today, with massive channels providing measurement feedback, it is becoming mandatory.

How does operational excellence improve sales – and specifically prospecting productivity?

By changing and improving sales and marketing management. Let us count the ways:

For example, studying various salespeople’s prospecting activities and yields would have revealed valuable knowledge about what was most productive.

For example, ERP systems are a complex sale. My APICs participation impacted my awareness and credibility in the local market. It also gave me knowledge of what operations, finance, and purchasing were likely to be interested in, which was crucial in qualified opportunities. How did my local prospecting yield compare to that of other reps? I had no idea, and the company didn’t care.

I worked hard on my phone skills, APICs membership, and public seminars. I even got in trouble a few times because a post-card campaign I devised was a little too clever. I creating things no one learned from except me. I can only imagine what a team of us could have created if we’d had a method structured for learning.

One of my sales managers worked this way, and his team was incredibly successful. A few rare individuals lead this way by instinct. Operational excellence provides the means for enabling any leader to do it by design instead.

What changes can you make that will result in improvement?

When salespeople – or their companies – complain of low prospecting yields, take a look at their commitment to operational excellence.

Are they relying on tradition, blind – but massive (and wasted) – action, and hutzpah?

Or are they attending to the voice of customer, understanding variations, systems thinking, methods for learning, and respect for people?

The trajectory of our civilization has shown there is no reasonable objective in the universe that can withstand persistent attack by a team of intelligent human beings.

It has also shown that this only happens in an environment where leaders demonstrate respect for what their people can contribute. This is especially true within sales and marketing.

And the good news is, there are thousands of companies and millions of salespeople out there who are hoping it will start happening soon.