A PROCESS DRIVEN METHODOLOGY FOR THE OPTIMIZATION OF THE SALES PROCESS
The Pain
The pressure for corporate results has converted selling into the ruthless persecution of the hottest opportunity. There appears to be no time to focus on the execution of a well defined selling process. The need to close has become the greatest obstacle of the true capacity to close.
Pressure promotes improvisation; improvisation promotes disorder and disorder promotes uncontrolled chaos and unpredictable results.
Due to this pressure and chaos, Sales Professionals are constantly looking for the “magic wand” that will help them achieve their goals. The world is full of sales books, courses and conferences teaching a multitude of techniques mostly related with execution. Unfortunately many sales professionals apply these techniques and still don’t achieve the desired results, not because they execute incorrectly, but because they don’t have enough to execute on and they, or the company they work for, don’t know it. Their underachievement continues, so they read more books and take more courses. It is a never ending cycle.
Companies are trying to solve a problem they maybe don’t have. They don’t address the real problem because of a lack of visibility and applicable analytics. By looking for a solution without properly diagnosing the root cause, they are unknowingly perpetuating a negative cycle.
What Companies should know:
The Sales Process
Most selling, excluding selling over the counter, is a process and as such is divided into definable steps. Each step consumes time and resources and can only produce a finite amount of work. The steps are usually sequential and at each step there is a conversion ratio.
The three main variables at each step then are: capacity, duration and conversion ratio. Capacity is how many opportunities can be efficiently processed at each step, duration is how long it takes to process the capacity and conversion ratio is the percentage of opportunities that will continue to the next step. When adding the contribution per opportunity, Inselligence delivers a proprietary analysis that results in a continuous loop of workflow optimization, empowering the user with the needed visibility to replace unreliable forecasting with reliable results.
The steps form the sales cycle of a company, a sales professional or a product line and the cumulative definition and activity of all steps form the sales funnel. The capacity of this funnel is not only a function of the individual activity of each sales professional, but of the total structure constructed by the sum of the characteristics of the individual steps.
Closings are a consequence of the total sales funnel structure and not of pure individual activity.
By knowing the sequence of steps in the sales process and knowing the answer to these three variables, capacity, duration and conversion ratio, it is possible to construct the sales funnel while optimizing the workflow in order to create a repeatable process with the right visibility to ultimately achieve the desired result.
Funnel chart
It is this funnel structure, developed with the desired result in mind, that sets the consequential output quantity and date required at each step in order to achieve the desired results. Quota will depend on the execution of the definition of the structure and not on dispersed and unpredictable individual efforts.
Inselligence contrasts with typical sales forecasting models that rely on gut instincts and intangible probabilities. Instead, it delivers reliable forecasting through the use of analytics by applying an innovative algorithm based methodology using specific variables of the process to create the required visibility to know where the organization stands with respect to its end goal in mind at all times. In fact, historical forecasting could be projecting and perpetuating the results obtained with a flawed Sales Process. Inselligence combines its analytical capability with a comparison analysis with real time data coming from the user’s CRM to create a positive feedback loop, yielding a cycle of continuous improvement for the organization.
Managing and achieving the execution of the funnel design can be very complex, especially because the steps of the funnel are dependent on each other, and when a negative result occurs at a step it is transmitted to the other dependent steps. Unfortunately, selling by nature has high variability, and this variability introduces negative results into the steps.
The effect of the sequential dependency and the variability makes the funnel system almost impossible to manage when seen as a whole. This explains the chaos.
The Constraint is the Solution
Fortunately, there is a solution. Like any process, the sales funnel has at least one step with a capacity smaller than the others. This step is the constraint of the system, the step that sets the rhythm and capacity at which the funnel works.
We can compare the sales funnel with a chain. The chain is a collection of links that only achieve their goal when they work together, but one of them can sustain less pull than the others. That link is the constraint of the chain and the chain is only as powerful as that link. If we desire to better the chain’s capacity, any work or investment done to strengthen the links different from the weakest link is wasted, because the capacity of the chain continues to be the capacity of the weakest link. Only by strengthening the weakest link will the chain as a whole be strengthened.
It is the same with the sales funnel. The weakest step is the most important one because it determines the production capacity of the funnel. All the steps prior to the constraint step support and protect the constraint step as it should never stop or work below its maximum capacity.
Inselligence
Sales Funnel Analysis
Once the constraint is determined and its capacity known, Inselligence will use the constraint’s total capacity in order to get the maximum production from the sales funnel structure. Inselligence will advise the user if the capacity of the constraint is not being used totally due to conversion ratios or low number of opportunities in the prior steps.
With Inselligence the user will be able to design a funnel that will promote the achievement of the quota. Once it is defined, the user will track its daily activities and compare them against the original design. If the original design is not being met then it will be easier to determine the cause at each step, and take the necessary corrective action.
This corrective action requires execution knowledge that, as mentioned before, sales professionals are receiving from a variety of sources. If the conversion ratio at a certain step is not in line with the desired percentage, maybe the cause is lack of product knowledge, or maybe it is the inability to close the sale. The important point is that the user will know where and what corrective action is required and resources will not be spent where they are not needed.
FLOW
The desired Manifestation
The final outcome of this apparent complexity is really very simple: the continuous and reliable movement of enough opportunities from one step to the next, also known as FLOW.
FLOW is composed of three variables that must simultaneously happen in order for FLOW to achieve the desired results. These three variables are:
- How many opportunities are at each step?
- How fast are they moving from step to step? and
- What is the quality of these opportunities measured as their average value?
When enough opportunities of the right value move in the right time, enough business is created to achieve the desired quota. It is that simple. All the complexities defined in this document are just the details that bring us to these simple but deeply powerful truths:
- The correct FLOW of the Sales Process is what controls the results.
- The needed level of all three conditions, how many, how fast and what must be permanently met.
- The job of the salesperson is to facilitate the permanent existence of these three conditions at their needed levels.
- The job of the salesperson is to facilitate the permanent existence of the correct FLOW.
- Inselligence models the FLOW that the organization needs in order to achieve its goals
- Inselligence tracks the organization’s real FLOW.
- Inselligence compares the modeled FLOW vs. the actual FLOW and empowers the user to make the necessary adjustments so the actual FLOW will achieve the organization’s goals.
- The intrinsic know how of Inselligence will provide real time feedback to the sales team members resulting in a deeper understanding of the key variables that drive execution in the sales process.