Last time, we talked about one application of process improvement application to Human Resources, based on a frustrating interview experience. But there are other organizational functions that tend to have even more resistance to the scrutiny of process examination – the Sales Department!
Let’s look at how several tools, Process Mapping and Design of Experiments, can work in this creative “non-definable” environment.
Words of caution: In many sales organizations, there are top performers who consistently exceed their quotas, provide great customer service, and have loyal clients. You should think long and hard before changing anything in their world. This article is probably for everyone else.
Lean Six Sigma has been widely accepted in the medical field. One example is improving the flow in a doctor’s office so that a doctor might see 20 patients in a day instead of 15, thereby increasing his revenue potential. A key learning from those experiences is that everything is looked at EXCEPT when the exam room door is closed, and the doctor is with the patient. That is where the “art” comes in, and few knowledgeable LSS practitioners would dare mess with that time. They look at everything else: patient check-in, record updates, patient scheduling, check-out, etc., where the largest amount of patient time is utilized.
For our purposes, let’s place the salesman’s face time with the customer in that same “off-limits” category, and look at everything else in the sales process.
There is a technique available in LSS termed Design of Experiments (DOE). It’s a way to test a set of assumptions about what works and what does not, in this case in the sales process. But rather than testing each assumption by itself, DOE offers a much more efficient way, letting you experiment with changing multiple factors at the same time, yet still being able to identify which factors have significant influence on the probability of closing the sale.
Let’s postulate that the problem is an unacceptably low percentage of qualified leads/opportunities that result in actual sales (purchase orders or contracts). Here’s a high-level approach that might be considered:
Assemble a team of top performers, average performers and marginal performers.
Create a process map of every step in the sales process, capturing the variation and additional steps done by some, assuming there is not already a standardized process.
Once the process map has attained a consensus approval, have the team list the significant steps in the process that are thought to be critical to making the sale. Try to come up with 10-20 key steps.
For each chosen step, identify two options for that step (such as included or excluded from the process, or emailed response vs. snail mail, or no follow-up vs. follow-up.)
Here’s an example of proposed critical steps, and two options for each. The steps are not in any particular order in the sales process:
OK, you get the idea.
Set up a DOE for these steps, using any of a number of available Statistics software packages, such as MiniTab, SPS or Analytica. Your friendly local LSS Black Belt, statistician or data analyst will be glad to help you.
Now you’re ready to start the test. If you have many suspected critical influencers on the sales process, the test may take several months, depending on the amount of transactions handled by your sales team.
The DOE will assign the conditions to be followed for each sales opportunity in the trial.
You’ll keep track of the success of each sales opportunity and feed the information back into the DOE software.
At the end, the software will tell you the extent of influence of each factor you identified on the outcome of the sale.
You’ll discover that some of the factors that you identified as critical had no statistically significant impact on the success of the sale. Or you may find that none of the identified factors were statistically significant, so it’s time to brainstorm again on factors you may have overlooked. But likely, there will only be a few factors which stand out as being heavily correlated to the desired outcome. The task then becomes to redesign your sales process to incorporate these actions. Because other actions or non-actions are not relevant, they can be omitted, which may make the sales process more efficient for all involved.
Now, still recognizing that Sales is about relationships, judgments, human interaction, why not incorporate the critical success factors into the process? How many times should the sales rep follow up? Is it necessary to bring an executive to a meeting? Is a different process required for your Midwest Territory than for the Southeast? There’s no guarantee for the answers, of course, but with strong correlations between some of the factors in the process and positive outcomes, this technique should be given strong consideration if an increase in sales is desired.