Our sales process design methodology
Our approach to sales process design
differs from traditional design in one critical area.
We design sales processes to optimise throughput,
rather than to maximise conversion ratios.
While this approach tends to be
counter-intuitive, our experience is that most sales
process underperformance is due more to a lack of activity
than to poor sales skills.
Of course, the relationship between
activity and sales is generally understood. What isn’t
understood is that most sales processes simply aren’t
scalable. Furthermore, this lack of scalability is
frequently a result of an over emphasis on conversion
rates.
To illustrate this point, let’s
imagine a sales process that has been designed purely to
maximise conversion rates.
More likely than not, most elements
of this sales process are managed by salespeople.
Salespeople initiate relationships with prospects. Each
salesperson then manages relationships with these
people. And each salesperson manages each sales
opportunity — preparing proposals, conducting sales
appointments and even overseeing the fulfilment of
orders.
While conversation rates in this
imaginary sales process are likely to be high, sales
volume is almost certainly low. The reason for this is
simple. Salespeople are spending so much time on process
work that they have little time available for selling!
In such a sales process — and sales
processes like this are more common than you might
imagine — each salesperson would be lucky to conduct
more than two or three sales calls a week!
In this scenario, management typically
responds to low sales volumes by suggesting that
salespeople increase their activity levels.
Salespeople greet this request with
understandable chagrin: ‘How,’ they ask, ‘can
management seriously expect us to make more sales calls
when we’re having trouble keeping up with the demands
of our existing sales activity?’
Obviously this is not a sales problem. It’s
a sales process design problem.
The solution, as previously mentioned, is
to redesign this sales process to optimise throughput,
rather than to maximise conversion rates.
There are four keys to doing this:
-
Recognise that your sales process is
a process — just like a manufacturing process. A
sale is not an isolated event, it’s the culmination
of a process. Accordingly, it’s important that you
approach the design and management of your sales
process with the same kind of scientific method that
you would apply to your manufacturing process.
Match tasks with resources. If you
go behind the scenes in a restaurant, you’ll notice
that chefs don’t wash dishes. This is because cooking
provides the restaurant with a far greater return on the
chef’s high salary. The same thinking should apply to
sales process design. Conducting sales calls is a
high-leverage activity. Prospecting, routine customer
service and order fulfilment are not.
Automate as much of the process as
possible. If you take a look at your sales process,
you’ll be surprised how much of this process is
routine or process work. This process work should
be systemised and automated. In particular, your sales
process should be designed so that its first stages are
as automated as possible (this is discussed below).
Manage the process for throughput. The
more systemised and automated it is, the more scalable
it is. The more scalable it is, the more you should
scale it! Of course, you should maintain conversion
rates (and other relevant indicators) within an
acceptable range.
Relationship-centric Marketing
We believe that a sales process should
consist of three components (see the following diagram):
-
Relationship acquisition
-
Relationship management
-
Opportunity management
The first two components are typically the
first that should be systemised and automated.
Our approach to the automation of these
two components is detailed in full in our article on Relationship-centric
Marketing.
In short, this article argues that there
are two types of customer:
-
Product focused (those who make a
purchasing decision primarily on the basis of product
features and price).
-
Relationship focused (those who are
more interested in ‘purchasing’ an enduring
relationship).
The article then goes on to explain
why each type of customer requires a quite different sales
process design.
The most significant difference between
sales processes relates to relationship-acquisition. Product-centric
organisations acquire a relationship as a result of a
transaction, whereas relationship-centric
organisations acquire a relationship in order to earn the
right to transact.
As illustrated above, we suggest that relationship-centric
organisations acquire relationships with the offer of
packaged information, and then nurture these relationships
with a subscription to a (content-rich) newsletter
(generally distributed by e-mail).
Because both the relationship-acquisition
and the relationship-management components of
the resulting sales process are highly scalable, it’s
quite feasible to build a significant database of
relationships (subscribers) with minimal cost (in terms of
both cash and management resources).
Obviously, a subscriber base of sufficient
size will supply salespeople with a constant stream of
sales opportunities.
A common objective of our sales process
reengineering exercise is to build a sales process that
provides salespeople with five appointments a day, five
days a week.
More often than not, the achievement of
this objective represents an increase in activity
(throughput) of greater than four hundred percent!
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