A customer-focused sales process needs to cover all the steps, from market awareness through measuring results achieved by customers. It should define and comprise:
When buying cycles begin
The steps involved in making a recommendation
The steps necessary to have the buyers understand their requirements
The steps needed for buyers to understand how your offering addresses their goals and problems
Built-in feedback loops, to permit a rapid adjustment to timing issues, competitive pressures, client feedback, market issues, and external events (e.g., 9/11, Y2K)
One way of structuring a sales process is to define an appropriate set of pipeline milestones, as mentioned earlier. Consider, for example, the following set of milestones in a typical sales process:
Access to decision maker
Return on investment (ROI) completed
ROI agreed to by prospect
Customer resources committed
Budget allocated (whose?)
Meeting with Information Technology (IT)
Business issue(s) shared or admitted
IT technical approval
Professional services call
Specific titles called on
Reference site visit
Client financials received
Financials requested by prospect
Pilot agreed to
Projected decision date
Compelling reason to buy
Contracts submitted to legal
Call made by services staff
T approval of cutover
First-level manager call
Project start date defined
How do you identify milestones? In addition to drawing on your own experience and process, as well as the list above, we recommend analyzing transactions from the past year or so to determine if you can isolate common factors and patterns in opportunities that you’ve won and lost. By so doing, it is often possible to identify and incorporate specific best practice events and use them as milestones. This can allow organizations to begin to institutionalize their best practices within a sales process and improve win rates on opportunities in the pipeline.
One company we worked with sells software, and would not allow opportunities to be qualified past a certain level unless the salesperson had made calls on business people outside of the IT department. This milestone was created because history showed that many sales cycles that began within IT ended suddenly, and unhappily, as soon as a request for funds was made without having built a business case that end-users could present to their line of business executives. On the more positive side, another client discovered that when prospects came for a corporate visit, they had an 88 percent close rate on those opportunities. Guess what recommendation we made that became a step in their sales process?
These milestones allow salespeople and management to better understand where they are in a given sell cycle. Just as important—or maybe more important—they provide insight into whether opportunities are qualified, and therefore worthy of resources. As noted in earlier chapters, many traditional salespeople take comfort in having quantity, rather than quality, in their pipelines. They are competing to keep busy, rather than to win.
Key steps in every sales process must be documented in order to be auditable. In other words, there must be a letter, fax, or e-mail from the salesperson to the buyer that summarizes key conversations. Such documentation serves multiple purposes:
It allows consistent internal messaging by the buyer, within his or her organization.
It allows the first Key Player in a committee sale to communicate his or her vision clearly to peers and superiors.
It minimizes the chance that the salesperson is overoptimistic (“happy ears”).
Most important, it allows the manager to audit and grade the opportunity.
Note that not all milestones need to be auditable. Your goal should be to define those critical ones that will allow you (or your sales managers) to grade opportunities. This is the only way to get away from the unbridled optimism (i.e., in salespeople’s opinions) described earlier.
Senior management must take ownership of the customer experience and the corresponding sales process, in part by defining deliverables based on the size and complexity of a given transaction. If this is not done by management, salespeople will do it in a more informal manner—often at the annual kick-off meeting—in ways that undercut the sales process. Consider the following imaginary (but entirely plausible) exchange:
Salesperson 1: What was your largest transaction this year without following the process?
Salesperson 2: $60,000.
Salesperson 1: Wow, mine was $30,000.
Salesperson 3: Got you both. Mine was $85,000!
The simple fact is, salespeople tend to resist following a process. As a rule, they don’t like documenting their sales efforts. And—still in the spirit of generalization—they like to boast of their successes outside the process, which they tend to see as bureaucratic and intrusive. In the conversation above, a policy decision has been made informally by staff who have no authority to do so.
Consider for a moment how much money it costs an organization to compete on a major transaction and lose. According to Gartner Group, the cost per sales call by a salesperson working for a high tech company is about $450, when all compensation and costs are factored in. On a major opportunity, if you were to add in management calls, support people, demonstrations, plane trips, and so on, the cost to compete on a major opportunity over the course of 6 months could easily be $30,000.
Seen in that context, is it reasonable to require that the salesperson be able to document where he or she is in the opportunity, so that the sales manager can determine if it is qualified and warrants the allocation of additional resources?
Salespeople (especially those who are not year to date against quota) intuitively know how much needs to be in their pipelines to keep their managers off their backs. When their pipelines are thin, salespeople become less selective about what they are working on. Along with the compromise in quality of opportunities comes an increasingly unbridled optimism. Here’s another dialogue that may sound familiar:
Salesperson: As you know, boss, things have been slow for me the last 4 months. I’ve been in a slump. But this is my month! Grab onto my coattails, because we’re going to have a huge month!
Manager: Let’s run through your forecast.
Salesperson: O.K. Unexpectedly, I received an RFP this week. It looks like it was wired for us. They’re going to make a decision by the end of the month. I figure it to be about an 80 percent chance. I just spoke with the ABC Company. The proposal has been sitting there for 90 days, but my friend in the account says management is getting serious again. And there’s another one sitting out there! . . .
Most likely, this salesperson will continue in this vein until the manager is persuaded that things are O.K. And most likely, that won’t be too difficult, because managers want to believe. Optimistic forecasts from the sales force, as noted earlier, permit the sales manager to make his or her own forecast more optimistic. And—on the downside—asking a salesperson to leave is likely to cause disruption, distract the sales manager from more important tasks at hand, and perhaps reflect poorly on the manager.
We’ve presented these two dialogues in part to underscore the critical importance of having a process and managing to it. Discipline and structure are as important to sales as they are to basketball, military maneuvers, and the opera. Yes, creativity and spontaneity have their place—but not in a conversation between a salesperson and a manager of a publicly traded company about what opportunities make up the revenue forecast.
By reviewing progress (or lack thereof) against defined and auditable best practices, managers can assess the probability of winning a particular opportunity, and help salespeople do something that they are loathe to do themselves—that is, withdraw from low-probability opportunities. (For a salesperson, removing a low-probability account from the forecast generally means that a replacement will have to be found by prospecting, which is an activity that many salespeople like less than a root canal.) The role of salespeople is to build pipeline by executing the sales process; the role of the manager is to grade that pipeline, with an eye toward disqualifying. Managers should own the quality of the opportunities they allow their salespeople to spend time and resources on.
By invoking and sticking to a strong sales process, managers should be able to increase the percentage of winnable situations in the pipeline.