Sales
Cycle Acceleration
As the adage goes, “Give me infinite
time, money, or quality – and I can accomplish anything”.
Unfortunately, this is not a luxury with which most business
are actually confronted. Resources to reach out to customers
are not unlimited and must be invested wisely. Fiscal realities
of ROI, budgets, and market combined with perishable resources
and competitive pressure demand sensitivity to the timing
of the sales cycle. A more predictable sales cycle allows
for improved planning and investment. Research conducted by
CSO Insights© quantifies the benefits and impact of a
more mature and standard sales process: 58% of sales force
achieving quota for a mature (“Level 4”) organization
vs. 42% for a “Level 1” organization, 55% performance
gap between Level 4 organizations and the general population
in converting initial meetings to full presentations, and
a 25% higher rate of converting at least 25% of presentations
to closes. A higher velocity sales cycle delivers ROI and
economic benefit faster.
Sales Funnel
A key component of the overall sales process
is the sales funnel: the steps and stages of our engagement
process – defined within the context of our industry
and company. We populate the funnel with leads, generated
by our outreach and lead generation activities. The funnel
itself includes the activities and milestones that mark the
progress of that lead towards a sale. Although at a detail
level, each customer and sale have their own, unique characteristics
– the successful, stable sales process is marked by
a standard set of activities and milestones which are part
of each sales engagement.
Once we understand and designate a standard,
repeatable set of steps and stages (milestones and activities)
for our company, we can establish targets and measurements
for these steps and stages. Then we can ask and answer key
questions which allow us to improve our sales process and
sales velocity:
- How long should an opportunity stay in
each stage?
- How do we identify “stuck”
opportunities and get them “un-stuck”?
- Are we investing appropriately at each
step and stage based on the probability of success and potential
revenue?
The focus of the sales funnel is to help
create indicators, early and often in the process, to maintain
traction on opportunities – and to incorporate lessons
learned to increase velocity in the sales cycle. The output
of the sales funnel analysis is not only increased velocity
in sales, but improved ability to predict sales volume.
Example 1: Download a PDF article on this subject
Example
2: Download a PDF article on this subject
Core and Common Measurements
Although they vary by industry or company,
most of the key measurements indicatative of the health and
velocity of a sales cycle are predictable. The focus for measurement
is to select the appropriate key measurements, and develop
a methodology to collect the data easily and leverage the
data into improved decision-making and action. Download
a PDF article on this subject
For Example:
| Measurement |
Data
Elements |
How
to Use the Information |
| Exception
Reporting |
Steps
and stages of the sales process |
Identify
opportunities that have not had activity within past x
days; identify opportunities that do not have scheduled
/ planned activities within the next x days. Track number
of days opportunity has been in each stage and identify
any that are longer than targeted =>. Make sure no
opportunities are “falling through the cracks”
and all are moving forward. Combine the reporting with
a team meeting, to share lessons learned and strategies
for moving the opportunities forward. |
| Loading
Reporting |
Accounts
or Opportunities by Salesperson |
Identify
total revenue being delivered by salesperson, and/or number
of accounts / contacts / opportunities => Ensure workload
is balanced and identify outstanding performers and lessons
learned from those performers to be leveraged to others. |
| Leads
by Source |
Revenue
dollars and Campaign / Lead Source |
Calculate
ROI for each lead source, by looking at revenue generated
via sales from each source divided by the cost of that
campaign and sales activity. |
Lean Six Sigma
Lean Six Sigma provides a methodology and
tool set, proven in manufacturing, that applies equally well
to sales and marketing to deliver improved customer results.
“Lean” provides the speed
(velocity), by reducing the complexity of the process –
removing non-value-added activities (activities within the
process the customer does not value from the process). “Six
Sigma” focuses on quality – the quality of the
interaction and of execution. Examples of quality improvements
include:
- Increasing the close ratio – as
“defects”, (defined here as lost sales) are
reduced
- Reducing time spent on opportunities
which don’t convert
- Investing appropriately in customers
and campaigns, based on their value to the organization
or ability to deliver revenue
Together, Lean and Six Sigma principles and
tools drive improvement in ROI, by leveraging data and metrics
within and around the process to improve decision-making and
predictability of the sales process performance. Download a PDF article on this subject
Value Stream Analysis
The first step in effectively improving
the sales cycle is to properly diagnose the cause and drivers
of the current performance level. These questions must be
answered,“Which parts of the process are driving the
current cycle time and unpredictability?” and “Where
can we most effectively make changes to increase velocity
and predictability?” Value Stream Analysis (VSA) provides
a diagnostic approach to answering these questions for an
organization. VSA provides a means to focus action on meeting
our velocity objectives, by providing a visual, common understanding
of our current process and linking in the actual data to support
it. The fundamental concept underlying the VSA approach is
this: our current approach and process deliver our current
results; therefore, if we want different results (i.e., greater
velocity or predictability) we need a different process. The
VSA helps understand WHICH changes to make, using data to
drive that decision, and prioritizes the change actions to
deliver the greatest impact. Download
a PDF article on this subject
|
