Most companies spend a big chunk of their revenues on selling as sales is the major lever for increasing revenues. No doubt that every business should therefore strive for excellence and look for continuous improvement in the productivity of its sales organization.
Productivity is the ratio between input and output. In sales, the input is the time and money spent on the sales activities, while the output is the order intake. Whatever decreases the cost or increases the sales will improve the company’s profitability. Vice versa, inefficiencies in the processes will increase the cost and cause the company to leave business on the table. Identifying waste and eliminate it has been extremely successful in lean production processes – why not in sales?
There are many areas within our daily sales activities where we can waste our scarce resources. Let´s start with the data. How often do sales people struggle to find the information they need. It may be buried somewhere in printed files, in Excel spreadsheets or in a database. Often the required data are obscured by a lot of junk – obsolete or wrong information. And on top of that, it may be impossible for the sales person to access the information while on the road. Searching for data is a time consuming effort and the consequences of using the wrong data can be even more costly.
Another waste is caused by poor probing in the sales process, which eventually leads to “defects”. Earlier in the sales process, this causes unsuitable solutions being presented to the client. Later it can lead to several revised quotations and a loss of business or, if the customer buys in spite of this, to a low margin and an unhappy user who will never buy again.
How often do sales people wait for information? How often do sales people let their colleagues in internal sales wait for information? Frequently this is due to a lack of communication, especially when people are on the road. The design engineers may not be able to create a technical solution for a client because they are missing crucial information. The sales person may not finish the quotation, which he or she started to work on two weeks ago, but still needs some technical information and the cost calculation. Not only that, the disruption in the workflow is time consuming and costly, it may also lead to frustrated prospects who will then buy from the competition.
What about over-processing? This is well known in production, but can it happen in sales? Yes, it can – and it happens a lot. Sales people may visit prospects, work out elaborate offers and demo their products although it is far from being certain that a sale will happen. Or they spend a lot of time on convincing clients who are already convinced.
It is easy and quite common to waste resources in inefficient and labor intensive forecasting processes. This is the most obvious waste caused in conjunction with forecasting. But there is another type of waste, caused by the inaccuracy of poor forecasting processes and this may even be worse. Wrong expectations due to wrong forecasts will ultimately lead to pressure on the sales force, extra meetings, additional reporting and hectic, inefficient attempts to meet unrealistic expectations. Valuable resources go down the drain.
Fortunately waste is not inevitable, but it has to be identified and eliminated. For both, modern technology can help. Having the right tools will help to measure the efficiency of the sales processes and detect sources of waste. Once identified, wasteful processes can be replaced by more efficient ones and supported by the same technology that helped to identify these inefficiencies. And, last but not least, the technology can help to maintain the discipline to apply the processes which have been proven successful.
The result is a technology supported continuous improvement process that will increase the productivity of the sales team.