What Should the Sales Production System Look Like?
What Should the Sales Production System Look Like
in Your Company?
by Michael Webb
The goal of sales and marketing is to find out what customers in your market are most willing to pay for, and give it to them. Although initially potential customers may only “pay” you by giving their attention, their time, and their information, the goal of course is to get their money for your products and services.
This stream of customer actions (called the Customer Journey) is the product of sales and marketing work. Needless to say, a company that sells and markets well creates more value, often dominating its market. A company that sells and markets poorly does not.
If you accept the premise that sales and marketing in fact produces value apart from the product itself, the next question is, “What does doing sales and marketing well (or at least avoiding doing it poorly) really mean?”
The answer to this question is operational excellence: Value must be distinguished from waste. The work must be operationally defined so it can be repeated. Further, the flow of production must be made visible, so it can be observed, measured, analyzed, and improved. And perhaps most importantly, the people involved must be engaged to learn from their experience in order to improve their performance.
Needless to say, most companies today find operational excellence in sales and marketing easier said than done. One of the reasons for this state of affairs is the differences between the manufacturing production environments (where process excellence originated) and the sales and marketing environments which often tend to resist Lean process improvement:
The Production Environment
The Sales and Marketing Environment
These differences are real, and they must be addressed if your company is to bring process excellence to sales and marketing. The good news is that more and companies are measurably improving performance by operationally defining their terms, making the flow of deals visible based on live data from field salespeople and customers.
If your company has successfully applied process excellence to production and operations, you may be well positioned to apply it to sales and marketing. And there is more good news: production operations alone represent half or less of the typical profit-improvement opportunity within a corporation – sales and marketing is where most of the money is.
So, to help you envision what operational excellence in sales and marketing looks like, here are four cardinal principles that will make the future of your sales and marketing better than the past:
The Prime Directive is Value to the Customer
Process excellence is based on the idea that “the customer is king” – that giving the customer what they want makes the most money for us. Unfortunately, this view is not consistently held among sales organizations. Some people have been taught to think sales are something you do “to” someone else, a manipulative sort of work that benefits the seller more than the buyer. This may be true in some markets (fortune tellers, and taking candy from babies comes to mind).
However, there is honor in selling even humble things if you respect the win-win principle. Yet B2B sales organizations waste untold billions when they fail to follow simple win-win rules of right prospect, right time, right offer.
- Right prospect – Not all prospects are created equal. Nor can they all be sold. The essence of operational excellence is in identifying and acting on the specific 20% of the system that can create 80% of the benefit. This means learning not only which of your prospects are most likely to become customers, it also means learning which specific individuals within your prospect’s organization are most likely to be receptive, and which ones are not.
- Right location – Where are your prospects and customers when they first realize they have a problem to solve? Where do they look for information? From their trusty network of dealers and distributors? On the Internet? Do they ask their accountant or look to a professional group? Smart sellers place themselves in the most credible places where their best prospects can find them.
- Right time – At any given time, most of your prospects are absorbed in their own problems, most of which you cannot help them with. Yet, the only thing most traditional sellers can do is talk about their products. Much better to earn respect and trust with helpful information and assistance around their problems (related to your expertise), than to be a peddler, push your product, or drop your price.
- Right offer – The seller must be perceptive enough to recognize the stages prospects go through, and offer them something of value to them at that moment. Someone who is not a decision maker is usually trying to do something for a decision maker, and if you can help them gather relevant information, learn pitfalls, etc., you can get their attention and perhaps build a bit of trust that can be built on later.
Most B2B companies accept the idea they need a sales process. And obviously there is nothing new in the win-win principle. So, why are B2B companies so bad at getting their act together?
It turns out, people can accept the idea that salespeople should follow a process, and still treat sales, marketing, and servicing as separate functions, essentially as ends in themselves. Unfortunately, real live customers look at your company as a single entity, not as discreet departments.
If marketing is organized around products, sales is accountable for revenue, and service is expected to stay within a budget, each group will work its heart out to achieve its goals at the expense of the whole. There is no vehicle to learn how our interactions with them affect their context, problems, and challenges.
The key to sales and marketing in the modern age is understanding the system. Regardless of the sources of prospect traffic, whether their role is that of decision maker, end user, or something else, your interactions with them must respect the stages they go through, offering them something of value. If you design the sales process so customers will follow it, salespeople will follow it too!
Except in small businesses, salespeople generally can’t do this alone. A team effort combines complimentary talents (such as copy writing, search engine optimization, video production, public speaking, salesmanship, etc.) to create a powerful set of interactions making it easier for prospects to pay attention, prefer to spend time with your company and its salespeople, and ultimately to buy.
Learning to See Means Using Operational Definitions
The tricky thing about sales and marketing is the value created is usually invisible. How do you know if a new website or branding campaign is working? Is six months of a salesperson’s time calling on a prospect doing any good? We all bring assumptions and ideas about how our work should be done, but how can we know what really works?
Process excellence brings powerful tools to this party. Chief among them is the Operational Definition:
Operational Definition: A means of using language precisely to ensure that people working together use the same words to refer to the same observable characteristics in a common, consistent manner (based on evidence of the senses). When a measurement is generated, an operational definition specifies the procedure for doing so. Operational definitions are crucial in scientific and process improvement approaches.
What terms should be operationally defined? How about something as basic as who is the “Customer?”
Suppose one department in a company (say, the sales department) thinks the customer is an executive at an end user who makes a decision to accept a proposal for your products and services. Meanwhile, suppose another department in your firm (say, the marketing department) thinks the customer is the person at the distributor who signs the check to pay your invoice. Ultimately, this disconnect produces collateral no one reads, products no one buys, and frustrations all around.
It goes without saying billions of real dollars are lost annually to ignorance around Operational Definitions. Unfortunately, those losses will continue until the ignorance is wiped out.
It can be said that process excellence in its entirety is about enabling groups of people to improve their understanding of reality – i.e., their Operational Definitions. Qualification criteria, work instructions and training materials, sales proposals and pricing, data gathering and reporting systems, all these require a common, respectful agreement on the meaning of the words being used.
Faster Funnels Make More Money
The point of every production system is to maximize your ability to produce what people want. The more you’re your products and services please the customer, the more profitable the cash flow you can generate for your company and employees. Operational excellence in its entirety is a means to this end.
Consider what happens in B2B sales models that require salespeople to do everything – beat the bushes to find the right prospects, nurture the relationships, discover their needs in-depth, prepare in-depth proposals, reach decision makers, present value-laden offers, respond to customer requirements, ensure necessary follow up, handle complaints, get referrals, and on and on.
If you set out to design a system to prevent the seamless flow of value, and one that would maximize inconsistent responses to customers, it would be difficult to do a better job of it.
An essential trait of an effective sales and marketing system is the rhythm and flow it generates from the market that pulls throughout the organization:
- Market and Voice of Customer research and experimentation reveal where prospects might be found (what key words or trade journals to advertise in, what companies’ salespeople should call on regularly, etc.). It can also reveal what offers can attract the highest quality sales opportunities.
- Generating a predictable flow of qualified sales opportunities is a crucial competitive advantage. (Most companies whose marketing departments attempt to generate leads unfortunately suffer from the functional orientation described above, and so fail to take advantage of this potential.)
- Your prospects experience useful interactions designed by you to help them along, build trust, and make it easy for them to talk to your salespeople when the time is right.
- Your salespeople’s time is spent with prospects that are ready to talk with them, not with prospects who are not ready or who fail to meet minimum criteria.
- Salespeople’s goal isn’t to close the business at any cost, it is to ensure the customer’s problem can be most effectively solved – and that the value proposition is thoroughly clear to the right people – thus maximizing margins and perceptions of value.
- When the decision is made, the people and resources are in place to smoothly help the customer transition through your products and services (thus maximizing margins and customer satisfaction).
The flow of leads, opportunities, and deals above only works if it is embodied by observed information from customer-facing work across the organization – not someone’s theoretical estimate or average but actual customer actions and statements collected in a timely manner. Only with this information can marketers, sellers, and servicers learn how to do their parts to optimize the flow of value.
Now, admittedly taking the above scenario literally could be impractical for lots of companies. There are lots of reasons the entire customer relationship needs to be managed by a single mind, for example. There are lots of situations where business conditions are not conducive to assembly-line thinking. Even if you did accept it as ideal (and I’m not saying you should), a company can only accept so much change at one time.
The point is to improve your method for generating value and reducing waste. Process improvement provides the methods for doing so. In addition, deal flow connects to take time in the production system and is a crucial aspect of sales and marketing.
Changing How Work is Done Requires a Specific Method
“It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.” Charles Darwin
The real issue in most companies isn’t in their sales and marketing or manufacturing processes. It is in how they create and drive change to begin with.
- Have you ever worked for a company for some years, left to work somewhere else for a few more years, and then returned? If you have, you likely experienced some “déjà vu.” Usually, the chronic challenges people were struggling with when you left are still raging as though nothing had changed when you return.
- On page one of his classic book “Kaizen” (McGraw Hill, 1986), Masaaki Imai told the story of Japanese executives returning to visit US manufacturing facilities twenty five years after their first visits in the 1950s. The Japanese were stunned to learn these facilities had not changed in all that time.
- Likewise, as a consultant I have lead teams of marketers, sellers, and servicers to redesign their processes, only to be dismissed by my client after this assignment. I watched dismayed as implementation failed to happen. I learned this was as common place in sales training, CRM software, and six sigma training as it is across all types of management consulting. Within a few years of completing my first book, “Sales and Marketing the Six Sigma Way,” I realized I needed to change how we worked with clients to prevent this from occurring again.
Most business leaders find it difficult to create real change in their business. Part of the reason, of course is that it is hard. There are so many moving parts, so many personalities, so many pressures in any business it is a miracle things get done at all.
However, part of the reason also is that managers expect their organizations to change, yet they do not provide an explicit means of doing so. This is nowhere more important than in sales and marketing, where the company’s oxygen supply is at stake.
Children and adults learn best by doing, so long as they also take time to reflect and analyze on their experiences. Likewise, a sales and marketing production system requires an explicit method of doing that reflecting and analyzing.
Becoming the next sales dynasty in your industry does not mean making wholesale changes over night. It means doing experiments consciously, making sensible incremental changes that work, and doing it faster than your competitors. This is a rational approach that happens through deliberate acts of checking, acting/adjusting, planning and doing at all levels:
- at the salesperson level (e.g., preparing to call on a customer)
- at the sales team level (e.g., achieving respectful agreement on how to prioritize sales opportunities)
- at the level of the entire company (e.g., deciding where to begin applying an improvement effort in their business)
This is also called the Deming Management Cycle, and should be at the heart of your management system.
Are You Ready to Begin the Sales Process Excellence Journey?
This completes our tour of “What Should the Sales Production System Look Like?” Perhaps you feel intimidated or hopeless if your organization differs greatly from this model. Please don’t despair about things you cannot control: improvement is always possible within your sphere of influence. Even local and humble improvement is noble, worthy, and even essential to human life.
Or, perhaps you feel inspired and energized that it is possible to move toward this goal. That is good, and it requires bringing others along with you. Please leave your comments and questions in the comments section on this page. Our goal is to learn what will make the journey easier, better, and faster for you and your company.
Finally, one of the most important things you need is a sober appraisal of your current condition. To that end, we have provided a Client Readiness Self Assessment, on the next page. When you complete it, you will receive a diagnosis including suggested actions you can take to begin making progress.
We look forward to hearing from you.