Geonexus

Improve your Sales Productivity

Change

What to Expect When You Implement Sales Process Engineering

by

Recently Justin Roff-Marsh explained in an email some of the concrete outcomes that companies experience when they implement sales process engineering (SPE). Too often we get lost in the theory and the system; we lose sight of tangible results we want to achieve.

Before SPE After SPE
Salespeople work as craftspersons. They sell to customers, but in addition they have many transactional responsibilities. These transactional activities include administration, customer service, quoting, and solution design. Salespeople work as part of a team. All transactional responsibilities are routed to either customer service or engineering. Salespeople spend their time in meaningful conversations with customers.
Salespeople are responsible for prospecting. They are expected to discover and pursue their sales opportunities. Prospecting is conducted by Promotions, a group within Marketing. Promotions produces a consistent flow of sales opportunities that are released to salespeople as they need them.
Salespeople work on both inside sales and outside sales. Salespeople either do inside sales or they do outside sales, not both. Outside salespeople may participate in conference calls, but these are scheduled in advance and are conducted from a hotel or from home.
Marketing pushes sales opportunities to sales. Sometimes they push too many opportunities, more than sales can manage. And sometimes they push too few opportunities. Promotions releases opportunities to sales only as sales needs them. In other words, sales pulls opportunities from Promotions. At the beginning of each day,
Promotions replenishes the queue of sales opportunities. This is their core responsibility.
Accounts are owned by salespeople. No single person owns an account. Inside salespeople are responsible for the opportunities that are released to them. Outside salespeople own discrete tasks,
mainly the performance of meaningful sales conversations with customers which are scheduled for them. The team as a whole is responsible for the various account responsibilities (administration, customer service, solution design and selling). Resources are specialized and each person on the team has a specific role.

Roff-Marsh has seen that companies who implement sales process engineering experience these economic benefits:

More sales activity which leads to more sales. Field salespeople are able to be scheduled into four in-person sales meetings per day for a total of twenty meetings per week. Inside salespeople can do twenty or more meaningful sales interactions per day.

Sales staffing costs go down. Companies need fewer field salespeople, fewer layers of management, and fewer regional offices.

Customer service quality goes up. Because people are focused on their area of specialization, they get really good at doing what they do. They develop methods that enable them to constantly improve their productivity. Lead times for quotes go down, response times for customer service queries likewise decline. Sales cycles move faster because salespeople are more focused on the sequence of selling conversations and less distracted with customer service, administration and solution design responsibilities.

From Craft-Based Selling to Team-Based Selling

by

What do you think is the key metric that predicts the success of salesperson? Conversion rates? Sales cycle length? Average purchase value or profit margin?

Nope. It’s none of these. The metric that predicts sales success is the amount of time that a salesperson spends in meaningful selling conversations with customers.

Justin Roff-Marsh reports in his book, The Machine: A Radical Approach to the Design of the Sales Function, that a field salesperson should be able to hold four of these conversations a day, five days a week, leading to twenty meaningful conversations each week.

An inside salesperson can conduct thirty conversations each day, which leads to 150 conversations each week.

How Sales Time Is Spent - Alexander Proudfoot

Unfortunately, most salespeople fall far short of this goal. The job requirements of most salespeople simply don’t allow them to spend much of their time in meaningful sales conversations. In fact, a study by Alexander Proudfoot revealed that they only spend about 10% of their time selling.

Why is this? What stops sales professionals from working at their capacity?

It’s simple. Salespeople have many responsibilities in addition to selling. They must prospect for customers, design solutions, complete administrative tasks, and solve problems for existing customers. They are so bogged down with these other tasks that they simply can’t schedule very many sales conversations each week.

Time spent doing anything but talking to customers is the enemy of your salespeople.

The Days of the Autonomous Sales Agent Are Over

But wait? Haven’t sales people always been responsible for all sales-related activities in addition to selling—prospecting, customer service, administration and solution design? Yes, they have. Traditionally, salespeople have been autonomous agents for the company. They worked their territory and conducted all sales-related tasks.

Roff-Marsh explains that those days are gone because of two fundamental shifts in how sales works.

1. Markets have become much more competitive. Selling is harder. It used to be that product development and production released a highly differentiated product at a good price and selling it was more straightforward. Manufacturing was the primary driver of success as companies invested in operations productivity improvement.

As more and more companies have reached the limit of dramatic productivity improvement in product development and operations, they are shifting their attention and their capital to productivity improvement in sales.

2. Customers want custom solutions. Sales must work closely with engineering and production to design these solutions. In the past most companies produced a stockpile of inventory and salespeople sold from this stockpile. This allowed salespeople to work independently from the rest of the company. No longer. The value chain has shifted away from make-to-stock toward make-to-order environments or even make-to-engineer. Nothing is produced until an order is placed. Sales must work closely with production and engineering to customize solutions for customers. They can no longer work as independently as they did in the past.

Transition from a Craft Model to a Team Model—Divide the Labor of Sales Among Many People

If markets are more competitive and customers demand custom solutions, how can salespeople respond and conduct the number of necessary sales conversations each week?

To answer that question, lets look at manufacturing. This organization has seen dramatic increases in productivity over the last several decades. How did they do it?

Manufacturing shifted away from the craft model of production.  It adopted a division of labor model which led to dramatic increases in productivity. The corresponding solution for sales would be to shift from autonomous selling to team-based selling.

This change will lead to massive performance improvements.

Field people will spend 100% of their time in the field, conducting four business development meetings a day, five days a week.

Skilled inside salespeople will produce high volumes of sales activity at very low cost.

Companies can consistently meet customer commitments, complete administrative work on time, and receive sales more frequently and more predictably.

Not only that, companies which have adopted this model have seen improvements in the relationships with other people in the organization.

They’ve eliminated hand-off problems between sales and production.

Marketing works closely with sales to supply them with a constant stream of sales opportunities.

The way companies achieve these results is by shifting from autonomous salespeople to giving the responsibility of sales to a centrally coordinated team.

What Is Standing in Your Way?

What obstacles face a company that wants to achieve these performance improvements by dividing the labor of sales among the members of a centrally coordinated team?

Complexity. Sales continues to increase in complexity. Multiple influencers and decision-makers. Conversations with multiple groups that occur over many months. Too many opportunities arise for a lost sale if you divide the labor of a professional salesperson among the members of a team. 

Is complexity a reason to avoid the division of labor? If it were, then we would expect that the most complex manufacturing environments would avoid the division of labor. In fact the opposite is true. The most complicated production processes—jet aircraft, automobiles, computer chips—all rely on the division of labor and tightly coordinated teams to do their work.

Personal relationships. While many salespeople cultivate good relationships with their customers, Roff-Marsh cautions us to ask which came first, the initial sale or the relationship? In fact, in most cases the relationship came after the sale. It did not cause the sale. And even after the first sale, the relationship is not the reason that customers continue to buy. Companies retain their customers primarily because they meet their customers’ requirements for production performance. They deliver on time, a completed order, with high quality.

Although sales complexity and the tradition of personal relationships shouldn’t stop you from moving forward, that doesn’t mean it’s easy to make the transition to the benefits of team-based selling.

Fortunately we can follow the well-trodden path that has been taken by production to make this transition. 

The purpose of this website is to give you the methods and the tools that will enable you to make this transition. These methods are based on the four principles that Roff-Marsh presents in The Machine:

  • Scheduling should be centralized
  • Workflows should be standardized
  • Resources should be specialized
  • Management should be formalized

If you follow these methods developed by Roff-Marsh, you’ll experience greater scalability and predictability in your business. Your selling costs will go down and your quality will go up.

How Do We Know That Sales Process Engineering Works?

Justin Roff-Marsh has been working for many years to help companies redesign their sales function. He calls them his “silent revolutionaries.” Here are a few of the case studies he has published: