Make Your Sales Funnel Flow Faster, And Win More of the Right Customers Through Sales ...op.salesperformance.com/downloads/Make Your Sales Funnel... · 2013-11-13 · Make Your Sales

Make Your Sales Funnel

Flow Faster, And Win More of the Right Customers

Through Sales Process Excellence

A Guide for Sales and Marketing Managers

by

Michael J. Webb, President Sales Performance Consultants, Inc.

Sales Performance Consultants, Inc.

Roswell, GA 30076

(877) 784-6507

www.salesperformance.com

http://www.salesperformance.com/

Copyright © 2012 Sales Performance Consultants, Inc. All Rights Reserved. Page 2

Make Your Sales Funnel

Flow Faster, And Win

More of the Right Customers

Through Sales Process Excellence

Contents

Introduction ......................................................................................................................... 3

Beyond the Numbers Game ................................................................................................ 5

Five Reasons to Consider Doing Things Differently ...................................................... 7

B2B Case Example ............................................................................................................. 9

Next Steps to Consider...................................................................................................... 15


Introduction

Companies that have implemented Lean process excellence have grown revenues and

profits through faster lead times as well as reduced waste and quality problems. These

have been achieved in a variety of functions – from receiving, through production, and

even back-office functions such as accounting and payroll.

As a sales and marketing manager however, you may be skeptical about applying quality

and process improvement to your area. That is understandable. The approach differs

sharply from how companies traditionally address sales problems, with tools like sales

training, CRM software programs, incentive compensation schemes, lead generation and

promotional campaigns, and so on.

How valuable would it be if marketing campaigns were coordinated to produce real

prospects, administrative tasks and internal bottlenecks were reduced, and the way your

team worked made you confident you could achieve revenue targets?

As a former sales manager and sales trainer, I understand sales, customer buying

processes, and organizational impediments to increased sales performance. I know that

marketing campaigns lack coordination, lead generation often fails, administrative tasks

waste time, bottlenecks frustrate salespeople, and monthly revenue demands keep sales

managers and salespeople under constant stress. I also understand how process

improvement can position you to solve most of the problems you face.

In this document, I won’t go into the history or achievements of quality improvement in

manufacturing. Nor will I drill you on the technical aspects of those methods (which I

covered in some depth in my book Sales and Marketing the Six Sigma Way).

Make Your Sales Funnel Flow Faster, And Win

More of the Right Customers Through Sales Process Excellence


Instead, in this and the other whitepapers in this series I will:

Explain how current sales management methods do not fully address the most

significant problems in sales, and why current problem-solving methods don’t

work

Describe how process excellence applies in sales and marketing and why it is

worth applying

Show how you can begin to work within your organization to start applying

process excellence to your sales and marketing functions, taking advantage of

your company’s in-house process improvement expertise and experience

The alternative is to continue to manage sales and marketing as they are currently

managed in most business-to-business (B2B) sales environments, even in many otherwise

sophisticated, customer-focused organizations. As a sales or marketing manager, you owe

it to yourself, to your salespeople, to your organization, and to your customers to

seriously consider this approach to managing sales and marketing.




Beyond the Numbers Game

Despite developments such as “consultative selling” and “partnering with customers,”

salespeople in B2B environments still mainly work to set up sales calls, present products,

and move each potential deal from lead to prospect to customer. They build

relationships, cultivate internal champions, negotiate prices, and create a sense of

urgency, while management monitors the numbers of leads, prospects, and customers

these activities produce. As a result, salespeople and sales managers alike view sales as a

numbers game.

Do you manage sales as a numbers game (and is it working)?

Relying on these measurements, management’s focus becomes how to find more leads,

convert more leads into prospects, and persuade more prospects to become customers,

and salespeople work to meet these expectations. The primary goals are to hit your

targets, achieve your quotas, make your numbers. Sales is about numbers – forecasts,

quotas, budget and market share – but sales should not be managed as a numbers game.

You cannot manage sales focused solely on questions such as:

How many leads do we have?

How many prospects?

Where are they in the pipeline?

How many calls did we make?

How many deals will close in this period?

While these questions have their place, they have crowded out more useful questions

such as:

What value are customers now seeking from our products?

What do prospects want and need when making a purchase decision?




Which sales and marketing activities are working? Which ones aren’t?

What are the main organizational impediments to sales?

How can we make selling easier for salespeople?

I’m not saying numbers of leads, proposal opportunities, and deals aren’t important. I’m

saying these are merely another form of results measure. I’m saying improvement only

happens when you are able to identify the qualities of these leads, opportunities, and

deals that can make them more or less likely to buy from you. It happens when you – and

especially others in your company – use this information to change how things are done

so as to make selling easier for you, and buying easier for your prospects and customers.

This is perhaps the most important thing to realize about process excellence: It is based

on the fact that the company’s production system should be designed to produce

customers just as effectively as it produces products. The sales department should not

have to be the only – and lonely – advocate for what the customer needs. Every

customer-facing function in the business should be listening to the Voice of the

Customer, from product development, marketing , sales and service, through shipping

and billing departments.




Five Reasons to Consider Doing Things Differently

Here are five reasons to stop managing sales solely as a numbers game:

1. You’re measuring only results: Measuring the number of leads, prospects,

calls, and closed deals is fine, but they are gross measures. The numbers game

prompts the questions How-many? and Did-you-close? which tends to drive

increased activity with little thought to the value created by the activity.

2. You’re not measuring quality: The numbers game ignores the quality of leads,

prospects, and customers. (If you’re a sales manager you have at some time

surely received a huge folder of useless leads from a marketing campaign.) Not

even all customers are created equal. Don’t you want the best leads, prospects,

and customers?

3. You’re not measuring value: Your sales process can and should create value for

your prospects and customers, meaning they want more interaction with you. It

should do so at every stage of the Customer’s Journey, and this can, and should be

measured. If all you measure is sales results, that isn’t happening.

4. You can’t tell what is working and what isn’t: This is the biggest problem with

the numbers game. Until you realize a needed to systematically analyze what was

working and not working in the field, you can’t develop the methods for doing it.

As a result, you cannot improve the value your sales process creates because

you’re not detecting or measuring that value.

5. You can’t solve sales problems: Without data on what’s working and what isn’t,

you cannot discover the cause of sales problems or improve productivity. You

cannot even define sales problems accurately. This leaves you with only

experience and intuition—and the usual fixes—rather than data and problem-

solving tools.

If you’re managing sales focused on generating leads or making more cold calls, that’s

okay. It’s what most companies do, because they don’t recognize that there is a better




way. We’ve all seen numbers-driven sales managers who book revenue into the period

that makes sales look best. We’ve all seen managers discourage “stories” from

salespeople trying to explain where the customer is in the pipeline or why they didn’t

buy. We’ve seen managers insistently repeat, “Did you close?” to focus the salesperson

on getting the deal (and perhaps to humiliate him or her).

Your sales process can and should create value for your prospects and customers,

meaning they want more interaction with you. It should do so at every stage of the

Customer’s Journey, and this can, and should be measured. If all you measure is sales

results, that isn’t happening.

By focusing on the right numbers – the data that helps you identify the quality of your

sales process – you can change the game completely. You can learn to create value

through the selling process itself, making customers happy to work with your sales

people and use your products to solve their problems.




B2B Case Example

If you are like me, you might want to hear about a real B2B case you can relate to. Below

is such an example from one of our client engagements. If you do not primarily sell

software, I urge you to look beyond the industry to the nitty-gritty selling work that went

on. Although space limitations prevent us from providing all the details, the story

provides many things you can take away to improve your own B2B selling environment.

Background: Several years ago, I worked with a small B2B software company decided

to take a serious, “process oriented” approach to growing their business. First, they hired

a well-known sales training company to help them define a sales process. Theirs was a

complex sale requiring agreement between the VP of Finance, Information Systems, and

often other department heads in their customer as well. After finishing their sales process

they instituted 20 percent annual growth targets for the new account sales department,

and began investing hundreds of thousands of dollars in pay-per-click marketing to

generate leads on their web site with the goal of achieving that 20 percent growth.

Presenting Need: Unfortunately, new account revenue did not increase. It became clear

their investment in lead generation was not paying off. The president complained

salespeople would not follow the process they were given when he was not watching over

them. The sales manager was a sharp and aggressive fellow. He had been with the firm

since the beginning, and was good at closing deals. Yet (like the salespeople who worked

for him), he was challenged by the low quality of the sales opportunities.

Research: Unfortunately, the increased flow of leads from the website stressed the

team’s ability to respond properly to them. Since they had no way to determine which

were most likely to close, they tried to grind away at them all equally, calling back to




offer demos, software trials, and price quotes. Salespeople became frustrated when

prospects ignored their calls. Sales forecasts proved unreliable. Activity quotas were

introduced. People worked harder. However, new account sales results did not increase.

Root Cause Analysis: At this point, my firm, SPC, was hired to diagnose the situation.

After appropriate interviews and data gathering, we identified the root-cause of the

problem: The sales process had been designed primarily around pushing product, and was

disconnected from customer value. Customers naturally resisted salespeople’s attempts to

push them to do things they were not ready to do.

As a result, salespeople began to resist their training and the demands of the process and

the activity metrics imposed on them. The process provided no means of learning what

customers wanted, or of experimenting with alternative approaches. The numbers game

was producing a diminishing return, as it always does.

Countermeasure: We helped the sales team and the marketing department to gather

additional Voice of Customer data. This provided insight to observable characteristics of

prospects who were ready, as well as not ready to buy. The steps of the sales process

were redesigned around their Customer’s Journey.1 Instead of pushing prospects to do

things, salespeople could ask questions, and make enticing offers of information

appropriate to the customer’s situation. The offers were designed so prospects who

responded to them were more likely to be qualified than those who did not.

In addition, prospect qualification criteria were redefined in terms of observable

characteristics of the deals, rather than vague generalizations. For example, the

salesperson’s access to decision makers could be defined in observable ways, such as

1 Customer Journey – the stages the customer goes through from the time they do not realize they have a

problem or need to the time they are spending time and money with someone to solve that need.




“Don’t know who the decision maker is,” or “Never met the decision maker,” or “Met the

decision maker.” As a more detailed example of observable characteristics, consider the

question “To what extent do you understand the prospect’s decision making process?:”

Don’t know their decision making process

We only know part of their decision making process

The main contact is only one of the many people involved

A committee has been formed, and our contact has influence

Main contact is the decision maker/signing authority

Test Standard Work2: The salespeople were doing most of the work defining the new

sales process. Naturally, some salespeople began to try out the new qualification criteria

on active deals. They decided to fill out a form in their CRM to capture their observations

(where each observable characteristic carried a score from 1 to 5, with the higher score

corresponding to the likelihood of winning the business). Without doing more work, the

account scores prioritized their sales opportunities (those with the highest scores were

prioritized the highest). It also generated more insightful questions about what made

various prospects more or less likely to buy. Later, a statistical analysis of the data

collected via their qualification criteria suggested improvements to the qualification

criteria as well. Sales forecasts became more reliable.

The new process helped people buy, rather than pushing them when they weren’t ready.

Salespeople liked it because it told them which prospects would be easiest to close, and

what they needed to do to make the rest of their prospects just as easy to close.

2 Standard Work – a set of shared knowledge and respectful agreements about the best way of performing a

task or accomplishing a specified objective.




Deploy Standard Work: The flow of pay-per-click marketing leads returned to earlier

levels. The client asked us to redesign their sales training and software tools to support

the improved sales approach. The focus of sales meetings also changed. Marketers now

attended the sales meetings, and the focus shifted from sales activities alone to the quality

of the prospects and salespeople’s interactions with them (guided by the observable

qualification characteristics).

For example, salespeople complained about difficulties enticing a insurance company

prospect when their only case study was from a manufacturing company. In addition, if

the salesperson could not to elevate the quality of the prospect to the required level, they

were expected to “walk away” if the prospect was still not yet ready to buy (a difficult

thing to do when you are being measured only on activity).

Continually Improve: The flow of new account business began to turn up, and many

observations were made about how to continue to improve. For example, case studies

from insurance companies were developed and tested successfully with prospects in that

industry. Other industries were prioritized for developing additional case studies.

Additionally, a statistical analysis of the observable qualification scores revealed that

some of the questions were not as predictive as expected. The aforementioned criteria

around the customer’s decision making process as among these. After a lengthy

discussion, the question was changed as follows (compare the new criteria with the

original to see interesting differences):

To what extent do we understand the prospect’s decision making process?

They don't know their decision making process

They have one, but we don't know it

We have partial understanding, but they won’t share more

We have partial understanding, and they will share more




We fully understand their decision process

This improvement (among others made to the qualification criteria) were more predictive,

and even gave salespeople a “secret” early indication of potential success: would the

prospect fully share their decision making process with them? Sales management and

executive management became more interested in process improvements, because they

knew that money would follow.

Managers can become more alert to how they manage the sales process, realizing how

important it is to check salespeople’s methods and data to ensure learning takes place.

Results: With no additional marketing expense, and no change in the quality or quantity

of sales opportunities, the new account close ratio doubled, and deal size and margin

increased. Revenue from new accounts doubled. After two rounds of improvement in

qualification criteria, forecast accuracy exceeded 90 percent. The client applied the new

selling methods to existing accounts, which increased per user revenues and profitability

after the initial installation (with virtually no additional sales cost).

Most importantly, managers became more alert to how they managed the sales process,

realizing how important it is to check salespeople’s methods and data to ensure learning

took place. They also realized the value of sales meetings that produced a constant stream

of data around the high-impact, common causes for salespeople’s successes and

challenges.

Approximate Return on Investment: Consulting fees amounted to approximately

$200,000 over eight months. Increased profitability exceeded consulting fees in less than

12 months. Two-year return on investment (ROI) exceeded 600 percent.

Questions to Consider

Do your salespeople have their own ways of doing things? Why would they want

to follow a consistent process?




To what extent do your salespeople push customers, vs offering constructive help

in solving their problems? Why is this the case?

How clear is the language your salespeople use to compare and contrast their

sales opportunities? Do their terms/words mean the same thing to each of them?




Next Steps to Consider

If you would like more information about bringing Lean process excellence to sales, we

have a Website devoted to it (www.salesperformance.com) where you will find several

years' worth of articles, case examples, and blog postings. In addition, you might:

If you would like to ask a question about this topic, visit the “Your Most

Important Question” page on our website.

If you think your lean or process excellence department could offer you some

assistance, consider recommending the introduction we have developed

specifically for them: How Sales Process Excellence Can Grow Your Company’s

Revenues and Margins.”

If you are convinced that applying lean to sales and marketing makes sense, you

may want to suggest that your General Manager or President read our introduction

specifically written for them: “How to Grow Your Business Through Sales

Process Excellence, a Guide for Chief Executives and Business Unit Leaders.”

Contact SPC to see how we can help your team with this important objective.

Please include:

- Your sales organization’s size, market geography and industry

- Specific UDRs and challenges you are facing

- What attempts you have made to overcome those challenges

- What you would like SPC to do for you

Sales Performance Consultants, Inc. • 877-784-6507 • [email protected]

345 Banyon Brook Pt, Roswell GA, 30076 • www.salesperformance.com


http://salesperformance.com/contact-us/your-most-important-question

http://salesperformance.com/contact-us/your-most-important-question

http://op.salesperformance.com/lean-e-book-1-offer-1a-2/

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mailto:[email protected]





About Sales Performance Consultants, Inc.

Founded in 2002, Sales Performance Consultants, Inc. helps the sales organizations of

B2B companies improve their processes for finding, winning and keeping customers.

SPC’s proprietary methods address the challenges of selling in global markets, managing

dispersed sales teams and working effectively with channel partners and in complex

distribution systems.

SPC has helped divisions of Pentair, Tyco, DuPont, Thermo Fisher Scientific, and dozens

of other companies make their sales funnel flow faster by enabling them to identify and

deliver more customer value, while reducing bottlenecks, waste, cost of sales, and time to

market.

About Michael J. Webb

In 2002, after a lengthy career in field sales, sales management and sales training,

Michael Webb founded Sales Performance Consultants to create a data-driven alternative

to the slogans and shallow impact offered by typical sales training, sales consulting and

CRM companies. Michael helped organize the first conferences on applying Six Sigma to

marketing and sales, and is the author of “Sales and Marketing the Six Sigma Way”

(Kaplan, 2006, 4.5 stars on Amazon) and numerous articles on how B2B sales

organizations can benefit from Lean and process improvement techniques.

He holds professional certifications in production and inventory management, quality

management, and has a BS in Mathematics from Southeast Missouri State University.

Documents

Make Your Sales Funnel Flow Faster, And Win More of the Right Customers Through Sales ...op.salesperformance.com/downloads/Make Your Sales Funnel... · 2013-11-13 · Make Your Sales