Why process excellence matters
Sales and marketing executives in B2B companies seem to be working harder every year yet consider some recent results:
- 62 per cent of companies had difficulty hitting target revenues in 2014. (Forrester)
- 42 per cent of all sales opportunities end in “no decision.” (HubSpot)
- B2B companies are delaying contact with salespeople. (Google and the CEB)
Further, for the last five years, a recent survey of sales and marketing organisations showed “The inability of our sales reps to sell value” is at the top of the list of business-to-business company challenges.
Distinguishing value from waste in sales
Value is created when you enable your customer to take the actions you want them to take. Anything else is waste. Salespeople have always known they must get their customers’ attention, time and trust if they are ever to have a chance of earning any of their customers’ money. Yet salespeople are hampered when customers are searching the internet to solve their problems.
And this points to the reason that sales and marketing productivity isn’t improving. Executives who think in terms of functions instead of value unwittingly make assumptions that limit their awareness. They swim in a world where the goals of marketing, selling and servicing are independent of each other. They see the sales process as just an issue of detail and discipline – something else to consider along with other departmental issues such as sales training, CRM or lead generation. As the saying goes: “The last thing a fish discovers is water.”
Customers see a company as a single entity. The fact that we integrate our approach to finding, winning and keeping them enables us to see the business as a production system. This system helps customers realise, prioritise and solve their problems. These stages are called the customer’s journey, and it doesn’t matter whether helping the customer buy requires a marketing tactic or a sales tactic. What matters is implementing the appropriate tactic as efficiently and effectively as possible.
What does a sales production system look like?
When sales and marketing becomes a cross-functional production system, companies can achieve big increases in sales productivity and margins. How does that happen? The first step is to get everyone to define his or her terms in the same way. For example, it is common for different individuals in a company to have a different concept of who the customer is.
One individual might think the customer is the person at the general contractor who signs the cheque in payment of your company’s invoice. Another might think the customer is the end user who touches or uses the product. And still another might think the customer is the executive who achieves lower costs and higher performance as a result of selecting your products and services. If the people in your company are not aiming at the same thing, how can anything improve? Getting your team to tie its words to observable reality takes time and energy, but that effort is richly rewarded
Phrasing the problem
A sales vice president at a machine tool company selling six-figure capital equipment said that his salespeople were spending too much time on the wrong accounts. Unfortunately, the problem was not solvable in this form.
How much time is ‘too much’? What is the definition of “wrong account”? He realised certain observable characteristics – such as a prospect’s degree of interest in training and maintenance around their machines – were an indication of their willingness to pay for value. He and his sales team developed a list of traits that enabled them to convert these observations of prospect quality into a number. The higher the observed quality of the prospect, the higher the number.
Prioritising their deal flow in this manner caused the best prospects to rank higher than when salespeople had forecast their deals informally. They were surprised to learn their sales forecasts became far more accurate with this approach. Instead of attempting to push harder on poor quality prospects, the sales team lent its expertise to help the marketing department develop a compelling return on investment model for an exciting new product. The return on investment model was published as lead magnet on a web page offering an even more detailed analysis and a budgetary quote, in exchange for qualifying information about the prospect. This was a big process change that would produce data about the quality of the prospect.
Far from having to enforce some arbitrary discipline around a “sales process” purchased from an outside sales training or CRM vendor, the management at this company merely encouraged the sales team’s energy to improve their own process.
Context is everything
Traditional approaches to managing sales and marketing cannot produce improvements like these. That’s because instead of solving problems in order to prompt desired customer actions, they impose “best-selling practices” out of context, and make assumptions such as “deals at Stage 3 have a 40 per cent chance of closing, while deals at Stage 5 have a 90 per cent chance of closing.” By failing to define and analyse actual data around what is working and not working in the field with salespeople and their customers, they fail to solve actual sales and marketing problems. In fact, that statement is a nice summary of why sales and marketing productivity doesn’t improve.
- Always look from the customer perspective – where is the value?
- Know your customers to prioritise the right efforts on the right deals
- Your team probably know when they are wasting time on a long shot – they may need you to help them find a better approach
No company has much direct control over the demand curve among its customers. However, by defining your terms, gathering data and aligning the work to real customer value (the fundamentals of process excellence), you can remove the waste and misalignments that hamper conversion and productivity in your business. You can pick up information that allows you to shift your resources to where customers need it, such as emphasising more efficient new products or service and replacement parts during a recession.
Create your own opportunities
This approach offers an immense opportunity for producing growth that is both more predictable and more sustainable. Process excellence works because it provides a data-driven framework for identifying which kinds of changes will actually make the sales funnel flow faster. Precisely defining the problems you are trying to solve has much greater impact than just applying another version of the usual fixes, such as lead generation, sales training, CRM or attempting to select even more talented (and expensive) salespeople. Further, the simple, logical reasoning it encourages is respected by salespeople and marketers alike. Ultimately, improvements to the quality of customers that are central to your business increases the productivity, and, therefore, the profitability of the entire enterprise.