The Magic is in the Flow of the Sales Process
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 foments improvisation; improvisation foments disorder and disorder foments uncontrolled chaos and unpredictable unachieved results.
Due to this pressure and chaos, Sales Professionals are constantly looking for the “magic wand” that will help them achieve their quota. 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 wrong, 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 they don’t know they have it or don’t even know it exists. By looking for a solution to the wrong problem they are stimulating the continuity of that which they are trying to solve.
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 attrition.
The three main variables at each step then are: capacity, duration and attrition. Capacity is how many opportunities can be efficiently processed at each step, duration is how long it takes to process the capacity and attrition is the percentage of opportunities that will not continue to the next step, or lost opportunities.
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, attrition, duration and capacity, it is possible to construct the sales funnel backwards, from quota to the initial stages of discovery or marketing.
It is this funnel structure, developed from the end to the beginning 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 individual effort.
This funnel contrasts with typical sales forecasting models that look ahead and estimate closing values based on historical statistics, but don’t suggest an alternate course of action if the estimate is below the desired results. In fact, historical forecasting could be projecting and perpetuating the results obtained with a flawed Sales Process.
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.
Sales Funnel Analysis
Once the constraint is determined and its capacity known, we will use the constraint’s total capacity in order to get the maximum production from the sales funnel structure. We then advise the user if the capacity of the constraint is not being used totally due to attrition or low load in the prior steps.
With DBR for Sales, the user will be able to design a funnel that will promote the achievement of quota. Once it is defined, the user will track his 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 why 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 attrition at a certain step is unacceptable, 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 right 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.
With this method the user has the best possibility of going from Zero To Quota while understanding why he is getting there.
· We model the FLOW that you need in order to achieve your goals.
· We track your real FLOW.
· We compare the modeled FLOW vs. the real FLOW and make the necessary adjustments so your real FLOW will achieve your goals.
· We train your sales force in the concepts and importance of FLOW so they immediately become enthusiastic facilitators of the required how many, how fast and what.
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