20 % improvement in Hit Rate

A B2B solutions provider decided to analyse and improve their sales process. They ended up improving hit rate of proposals by +20 % AND lowering cost of sales at the same time.

Starting point

Starting point was very traditional and text-book-style. One of their units had 30 sales people (account managers and solution sales people). The company also felt that their sales effectiveness was not as good as it should have been. When we took a closer look at what the sales people actually did and how they spent their days at work, we quickly noticed that:

  1. All sales people focus on very different types of customers
  2. All sales people sell both customer specific solutions and boxed products
  3. Efficiency is far from optimal

 

The Lean Sales approach

After initial analysis we came up with a project plan. The plan included very typical solutions like need-based customer segmentation, mapping customers’ buying process and dashboards to make sales effort visible.

The big decision was to review the roles and responsibilities across the whole sales process.

As all sales people used to work with all activities through-out the sales process (from customer selection, booking meetings, presentations, solution design etc) it was evident that efficiency was low. The solution was to divide the sales process into three parts based on the type of activities involved and based on the objective of the particular step in the process.

  1. Customer selection  – analytical part including major business decisions
  2. Contacting and marketing outreach – focus on efficient execution of marketing campaigns and customer specific activities (events, newsletters, product launches, booking of sales appointments) to identify opportunities
  3. Opportunity management – sales person driven work to qualify sales opportunities, understand customer needs and create value propositions and solutions

We mapped the sales process again to match these. Then we also did sizing of resources to match organic opportunity flow. Based on this exercise the customer was able to create a much more efficient sales process with significant improvements in data quality and flow. Also, the headcount was reduced from 30 to 18 at the same time.

The key to improved efficiency was creation of inside sales function including three sales coordinators and a part time marketing coordinator. These people are important especially in maintaining customer data quality.

Outcome of Lean Sales engagement

The customer performed analysis after the project and six months after the changes were implemented. The results are as follows:

  • +20 % improvement in Hit Rate
  • +10 % revenue growth
  • 400 % improvement in customer satisfaction
  • New process delivers 60 % of revenue and +90 % of profit
  • Lower cost of sales
  • Incorrect customer data in CRM from 17 % to <1 %

Do you think these design principles are applicable in your industry?