Value and waste and the core concepts in Lean thinking. We should always focus on value and meticulously eliminate waste. Sales is a perfect candidate for application of these simple concepts.
You have come this far so I assume you are interested about growing sales and winning more business. What is holding you back?
The most common “wastes” in sales
- Partially done work – too much stuff in progress and not being delivered. In Sales processes these might be proposals, solution designs, meeting follow-ups, minutes of meetings and people to get back to. Sales People are busy but have little to show for their efforts. Managing a pipeline of partially done work requires time and energy. The more you have partially done work in your inventory, the higher the cost. This can easily become a vicious circle.
- Degree of customisation – Customers are different and different customers might have different needs. Occasionally customers ask us to customise and differentiate our offering to suit their needs and sometimes these requests are justified. More often they are not. Customers can quite easily convince the sales person to modify the offering in order to win the deal. What is easily forgotten is that the more the degree of customisation grows, the more unique the whole proposal becomes. This might not become a problem for sales person (yet they have to re-work a lot of sales materials and paper work) but the problem becomes bigger on engineering and delivery side of things. Maybe we should push back to the customer, challenge the customer and learn why they want the customisations in the first place. Chances are they have not put as much thought into this as your product organisation has.
- Re-learning is causing a lot of small and minor issues across the sales process. If people have broad and wide roles they need to perform lots of different kinds of activities. This means some activities are performed very seldom. Maybe this is delivering demos, setting up customer specific configurations, pricing or internal approvals. Learning to do something another person already knows how to do it time consuming and prone to errors.
- Handoffs – Too many or poorly executed handoffs in the process cause problems. Say we need to change people in the sales team, opportunity owner or lead engineer. Each time we make such changes or handoffs we should carefully consider if the change is actually required.
- Delays are part of daily life. Unforeseen delays coming from the customer are impossible for the sales teams to recover from. “Our resources are tied up with other stuff” or “We have another more important project” are poison to sales teams. Therefore proper opportunity qualification is so important. If your sales team makes a commitment to design a solution or create proposal for one customer, you should have matching commitment from the customer. Are you sure you are on their list of top 3 priorities?
- Task switching – People are not built for multitasking. Some people manage it better than others. Too broad roles cause people to work on different types of tasks throughout the day. Each switch has a cost associated with it. In the hectic daily life it is very easy for the managers to ask a person to do this thing just once. Overtime this accumulates into lots of task switching and inefficiencies. People are not robots and they should not be treated as such.
- Defects – mistakes in the output of any process cause quality problems further on in the process and very often require to be fixed. In sales process we are talking about low quality materials, proposals, solution designs. The bigger problem in sales is that you don’t often get second chances. If the quality of the proposal is not good, customer goes easily with somebody else. You don’t get to fix your mistakes. Again, proper process and standard workflow help keep high quality.
These are the most common issues holding sales performance back. Some of these issues have roots and roles and responsibilities, the way work has been organised in your team. Some of these issues are due to lack of managerial practices such as opportunity qualification, customer selection criteria and sales process design.
Value
Value can be measured in two ways – customer value (willingness to pay for your offering) and process value of sales and selling.
Customer value is simple and easier to measure. New customers, up-selling, new contracts and just in general new deals – people willing to pay for your offering.
Process value is a bit more complex. Typically sales people go through a series of conversations with customer throughout the sales cycle. Sales people help customers to structure and prioritise their needs and opportunities. Sales people share insights, experiences and consultation throughout the sales cycle. This is valuable to the customers (yet different than won deals) and this is one type of value prospects get from sales people and your sales process. Are you sharing case studies, research, insights and other helpful and valuable assets your customers might benefit from? Experienced sales people probably have this body of knowledge and they are able to meet people and discuss with them. This is difficult to scale up and make part of the sales process unless this knowledge can be condensed into shareable and re-usable materials.
Continuous improvement
The point is that all of these issues can be solved. Many companies have beaten these challenges successfully. Most of these issues have their roots in management, roles and responsibilities and sales process design.
One (=You) should identify which ones to solve first and work with continuous improvement approach to fix them one by one.