Business Advice Daily

Improve Sales - Improve Flow

by Allen Minster

Ralph held his breath with anticipation. His attention was focused on the object inching its way down the assembly line. The color was bright and the finish was smooth and shiny. The dimensions were perfect and the lines were graceful. Ralph carefully lifted it off and set it on the floor. It was poised perfectly for one magical moment and then tilted backwards awkwardly.

Ralph looked up and to his dismay, an entire line of bright smooth and shiny three-legged chairs made their way down the assembly line.

What good is a three-legged chair? More importantly, what do three-legged chairs have to do with sales? The answer is processes. The good thing about factories and assembly lines is they can predictably and efficiently produce the same thing over and over. This is good if you have the right process, the right steps and the right raw materials; if you don’t, you can make hundreds and thousands of—well three-legged chairs.

What can we learn from three-legged chairs? Maybe you have tried to automate your sales force in the past. For the last decade, companies have spent millions on technology and CRM solutions in an attempt to increase sales. In spite of all the good intentions, in many cases revenue actually went down when sales automation was attempted.

Most companies have a process in place for almost every aspect of the business day, from how bills get paid to who takes the trash out at night. All aspects except sales! When it comes to sales—everything is random:

* Prospecting is random, so sales fluctuate dramatically.

* Client contact is random and clients leave due to neglect.

* Cross-marketing is random so customers say some version of…“I didn’t know you sold that!”

The reality is that if you do not have a formal sales process—you have a problem!

The relationship between activity and sales results is generally understood. What isn’t understood is that most sales processes, if they exist at all, simply aren’t scalable. Furthermore, this lack of scalability is frequently a result of an over-emphasis on conversion rates.

To illustrate this point, let’s imagine a sales process that has been designed purely to maximize conversion rates.

More likely than not, most elements of this sales process are managed by individual salespeople. Salespeople initiate relationships with prospects (prospecting). Each salesperson then manages relationships with these people (qualifying and moving the sale forward). Further, the salesperson manages each sales opportunity—preparing proposals, following up sales appointments, overseeing the fulfillment of orders and sometimes managing collections.

While conversation rates in this imaginary sales process are likely to be high, sales volume is almost certainly low. The reason for this is simple. Salespeople are spending so much time on process work that they have little time available for selling! In fact, we have found that in most sales organizations the average salesperson spends less than 20% of his or her time actually selling!

In such a sales process—and sales processes like this are more common than you might imagine—each salesperson would be lucky to conduct more than two or three sales calls a week!

In this situation, management typically responds to low sales volumes by suggesting that salespeople increase their activity levels.

Salespeople greet this request with understandable angst: “How,” they ask, “can management seriously expect us to make more sales calls when we’re having trouble keeping up with the demands of our existing sales activity?”

Obviously this is not a sales problem. It’s a sales process design problem.

The solution, as previously mentioned, is to redesign this sales process to optimize throughput, rather than to maximize conversion rates.

There are four keys to doing this:

1. Recognize that your sales process is a process—just like a manufacturing process. A sale is not a random isolated event that magically turned out OK; it’s the culmination of a process. Therefore, it’s important that you approach the design and management of your sales process with the same kind of scientific method that you would apply to your manufacturing process. If you followed the logic of many organizations in regard to sales, you would simply say that if one put enough watch parts in a shoe box and shook it long enough—a Rolex would drop out! That is never the case.

2. Why Frank Sinatra did not move pianos. If you go behind the scenes in a restaurant, you’ll notice that chefs don’t wash dishes. This is because cooking provides the restaurant with a far greater return on the chef’s high salary. The same thinking should apply to sales process design. Conducting sales calls is a high-leverage activity. Prospecting, routine customer service and order fulfillment are not.

3. Automate as much of the process as possible. If you take a look at your sales process (or lack thereof), you’ll be surprised how much sales activity is routine or process work. What if this process work could be systemized and automated? In particular, your sales process should be designed so that its first stages are as automated as possible. This is the concept behind sales force automation. Using our example of three-legged chairs, you can easily see what can happen when the process is flawed or when each salesperson is left to come up with his/her own plan.

4. Manage the process. Most managers attempt to manage the salesperson rather than managing the sales process. The normal way to accomplish this is to require the salespeople to submit call reports and forecasts—usually with disappointing results. By defining and implementing a sales process, the goal becomes management of the process. This allows managers to set realistic, trackable goals and makes training new reps much easier.

A common objective of our sales process reengineering exercise is to build a sales process that provides salespeople with four or five appointments a day, five days a week.

More often than not, the achievement of this objective represents an increase in activity (throughput) of greater than 400%!

Lead Optimize! Blog Carnival - March 15, 2007 has chosen this article as one of its “best of the week” (March 15) picks. You can see it and many other wonderful, inspiring and informational articles at Lead Optimize! Blog Carnival - March 15, 2007.

Third Edition of the Carnival of Leadership Growth has chosen this article as one of its “best of the week” (March 16) picks. You can see it and many other wonderful, inspiring and informational articles at The Organic Leadership Blog.

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