Why Production Is More Predictable Than Sales?
Have you ever seen a production line or an assembly line? It starts with the raw material, and then the Raw material goes through various stages. At each stage it has its own input and its own output.
March 26, 2014 (Newswire.com) - Have you ever seen a production line or an assembly line? It starts with the raw material, and then the Raw material goes through various stages. At each stage it has its own input and its own output. There is quality verification at each stage of the output and each stage of the input. Atypical manufacturing Process could be a combination of processes with various sub processes, something like…
Process 1->Process 2-> Process 3->Final Process
Processs 1 = Subprocess 1+ Sub process 2+ Sub process 3 and so on, each Process will have sub processes.
If the Input unit does not confirm to the quality standards, it is chucked out of the system. Only those input units which are as per the quality standards are processed, others are rejected. If such input units which are not as per the quality standards are allowed to be processed, then end product will not be the desired one and it will have to be rejected at a later stage. So there will be wastage of the resources and hence the production cost increases. So the Manager knows "
(1) What" to do in a Production Process
In the production process, if there is any defect in the units processed, then the maintenance person will look into the machine and ensure that the defect in the process is nullified, so that the output unit is as per the standard. So in this case the manager knows what the production process has to do.
(2) How it should be Done
When such a production process is followed, then there is a confirmation at the end of the production process that it is going to give a pre decided output, so there is predictability of the output.
(3) Predictability of the Output: If there would have been
• No detailed process in the production line(Process Roadmap), & in addition to the process,
• Had there been no Quality check(Qualification)
• Mechanism for rectifying/ correcting the sub processes(Decisions, Criteria with Actions)
There will be no control on the intermediate inputs and outputs and the end product will not be in the required quantity/quality. Hence it is quite obvious that, Production has to have a very strict process, if the process is not strict, there will be problems.
Also since the production process is divided into various sub processes, if anything goes wrong anywhere, it can be identified and resolved at that moment, Else if the process manager would have concentrated only on the main processes, it will be impossible for him to identify the problem in between the main processes and by that time much of the damage would have been done. So in addition to micromanaging, the Production Manager also keeps a Birds' Eye View of the Entire Process and plans and executes the Entire Production in such a process that he gets the final output, inspite of the aberrations of the production line.
Now compare this with a Sales Process.
A Typical Sales funnel will have a series of events/process like (Typical Sales Funnel Stages)
Stage 1- Suspect
Stage 2- Prospect/Qualify
Stage 3- Lead/Opportunity
Stage 4- Present
Stage 5- Customer
There are other versions of this such as AIDA, Attention, Interest, Desire, and Action. All these have the same stages of recognition. So as you see there are 4-5 major stages in this process.
However, there are many sub-stages (process) in between the major stages, moving from one stage to another stage. A Sales manager is aware of these sub stages, but then he inspects only these major stages for Sales Reporting. There is a saying that - People respect what you inspect and not what you expect. So salespersons can very easily show a manager, the number of leads, number of prospects, and number of calls… All these numbers, all sales people are adept at showing the numbers, but then it does not convert to sales. The reason is Sales Managers do not inspect the quality of these stages/processes.
Similar to a Production line, where the number of pieces are passing though each stage of the process, if there is no quality check & If one just checks the numbers of units at each stage, one can be rest assured that his process is fine. It is only at the end of the process that one finds many of the units are rejected and hence resource wasted.
Similarly in Sales Process, after running the account through all the stages, one may find that at the end it may not convert, the reason being, not enough check has been done on that lead and corrective measures have not been taken.
In Sales Process, there are the major processes like Suspect, Prospect… and then there are the sub processes which will be the various meetings with the client. The quality of each meeting is important, in order to validate the success of the meeting. Only if one can have successful meetings, one will have successful sales. It is one of Quality check that similar to production line, where there are quality checks at every input and output. Similarly if one can have a quality check at each and every meeting, one will be able to identify the quality and take steps to rectify it. Else the damage carries on and reflects when after pursuing the lead the sale is not converted-(Rejected Unit in Production)... It answers what should be done to ensure successful sub processes/sub-stages of sales.
But then how do you measure the success of the meeting? Most Sales managers will inspect the success of a meeting on their guesses, there will not be any formal method of doing it, and so it is not sure whether it's a true successful meeting. So Sales Reps/Managers should have commitment based method of analyzing the meeting. One will inspect not what the Sales rep/manager has done (like doing the demo, meeting with client), BUT what has been the effect of meeting in terms of client action. In this a Successful meeting can be ensured & hence the success of the sub-process.
When a series of such stages/processes can be identified and action can be taken, it will only then be possible to realize the success of each stage. If a particular lead does not fulfill the success criteria of the stage/process, definitive rectification actions/steps can be taken. One can identify why the meeting has not been successful and what is the showstopper which can be seen in the progress of the Sale & necessary action can be taken to deal with the showstopper. One will be able to ensure that the Sale/output can be predicted well in advance and with accuracy. Hence Predictability of Output.
If there is no
• Detailed process in Sales(Process Roadmap)
• Identification of successful meetings/stages(Qualification criteria)
• Methods/Mechanism for evaluating the Meetings (Commitments from the customer)
There will be no control on the intermediate inputs and outputs and at the end it may be realized that lead has not been converted to sale. Hence there is a requirement of a detailed sales process with stages and sub stages and methods to identify and rectify the results of the sub stages in a Lead. So we may say, Sales is a Process, when it's not a Process, it's a problem.
Similar to a Production Line, in Sales Manager may also require keeping a Birds' Eye view of the Entire Sales Process of the Lead. The Sales Manager would plan and execute the entire Lead, so he would have a Deal Planning system OR Account Planning System. Else the Sales Manager may leave various gaps for harsh surprises which may fail the Sale.
Also since the production process is divided into various sub processes, if anything goes wrong anywhere, it can be identified and resolved at that moment, Else if the process manager would have concentrated only on the main processes, it will be impossible for him to identify the problem in between the main processes and by that time much of the damage would have been done.
Effect of Process: Suppose there is a plan to convert a lead to a sale in a period of 30 days. Without a well laid process with success measurement of each and every process/sub-process, it may take unpredictable time. Whereas with a Sales process and measurement of success of each and every stage, one would be able to identify the loop holes in the Sale. In this way, he will be able to identify why a sale can be converted and by when & If it cannot be converted, what is the reason and whether he can amend that reason. Hence he would save a lot of time & effort which he would have wasted on non-converting leads and focus completely on leads which are sure would convert. Increasing the hit rate and predictability in Sales is similar to the Production Process. Sales is a process, if it's not a process, it's a problem.
We at Advance can help you,
• Set up a Sales Process Roadmap
• Train your Sales People on making and identifying successful meetings(Not only WHAT TO DO but also HOW TO DO)
• Train your Sales Managers on successful Deal Planning/Account Management
• Train your Sales Managers to achieve better predictability (in quantity, quality and time of sales closure) and improve from 3 out of 10 - TO 8 OUT OF 10 DEALS.
This is how Advance helps organizations improve their bottom line and gain a competitive edge.
Advance Selling Skills Academy Limited
Telephone: 0845 125 9098 (UK)
Categories: Project and Program Management