Lean thinking is based on set of well thought principles. These have been created and improved during the past 50 years.
- Specification of value – Value can only be defined by the customer (based on his or her needs).
- Identify value stream – The Value Stream is a concept referring to all the actions that are needed and have to flow into one another in order to bring a product to the customer.
- Flow–All value-creating steps have to flow together.
- Pull – Pull creates the flow. Pull means that there should only be production when there are sales. Pull mechanisms should make sure you are not over-producing.
- Perfection – This is a continuous improvement – keep at it. There is no end to the process of reducing time, space, cost and mistakes. Continuous improvement as a mindset and a systematic approach to daily business has to become a part of the company’s vision.
That makes sense and sounds quite simple on paper. It takes time, skill and effort to deploy Lean principles in manufacturing and production operations (areas where Lean thinking was born).
So what do Lean principles mean in Sales?
How could Sales, an area with lots of waste and unpredictabilities, benefit from these principles? Sales and selling is different. Lean is for manufacturing.
Value. I’d say every sales person on the planet agrees on the concept of value. Customers are looking for value, sales people need to understand “unique selling points” and product managers are working hard on offering differentiation. Value can be defined only through the eyes of the customer.
I’d argue there are two types of value when it comes to sales. Value the customer gets and extracts from using the offering eventually and the “process value of sales” meaning the conversations customers and sales people go through when explaining the value proposition, learning more about customers’ needs, helping customers to structure and prioritise their problems and scope the sales conversation to focus on what is, well, most valuable.
Identify value stream. How can we deliver value to the customer in the most efficient way? Conversation and interaction with a potential customer evolves and the customer is interested in its different aspects throughout the process. The sales process should be capable of identifying where in the process the customer is, in order to support the customer (i.e. create value) in an optimal way, across channels. Usually we are selling to some people but there are many others involved in the decision making. Everyone has their own priorities and sales people need to find common ground. Value Stream is also about finding out which people participate the decision making and which ones we should approach first.
Flow – Once the value stream (or customer’s buying process) is mapped for one particular segment or offering, the sales process must match the way customers make buying decisions. All wasteful activities must be eliminated. This is an area where Lean thinking can really kick in. Typical hit rate in B2B sales can be anything from 5 % to 30 % or even higher. This means your sales process is most likely producing lots of waste.
Pull – Pull occurs as a potential customer initiates a series of actions that fulfil the definition of an input or part of a process. It is important to clearly define what kinds of inputs launch the sales process. The salespeople or the process should not react to everything; only to clearly defined inputs. For example, what conditions must be present in order to start designing solutions or developing proposals?
This means the potential customer company must fit our ideal customer characteristic or segmentation criteria, the person we talk to must be part of the decision making unit, our messaging should reflect his or her role and so on.
Perfection – or continuous improvement. Process can be improved indefinitely to make the flow faster and more seamless, to collect more information about the customer’s requirements and decision-making process, and to make buying easier for the customer, etc. The greatest difficulty is to create a culture that fosters continuous, fact-based improvement.