Organizations continually invest resources to improve the effectiveness of their sales teams. There are hundreds of sales training companies offering thousands of programs in all aspects of selling: call planning, presenting, negotiating, managing key accounts, questioning and so forth. These programs are a prerequisite for a salesperson’s success.
However, what these organizations are often neglecting is something just as fundamental as basic selling skills; a systematic method to continually improve their sales process. Obviously not having a sales “process” is a problem but identifying it as a problem is the first step toward fixing it.
Six Sigma is the systematic way to continuously and intelligently improve your sales process resulting in increased sales, decreased costs and improved productivity.
What is Six Sigma?
Everyone understands the term “Sales Process”, few however, can actually describe their sales process from a Six Sigma perspective. Many of you will find that following the reading of this article, that your sales process isn’t a process after all.
Six Sigma is a structured, disciplined and rigorous approach to process improvement. The goal of Six Sigma is to increase profits by eliminating Variability, Defects and Waste. Although Six Sigma is typically thought of in a manufacturing environment, its principals apply to all processes – including your sales process.
Applying the principals of Six Sigma to Selling
How well does your sales process meet your expectations relative to Variability, Defects and Waste?
Variability is defined as lacking a consistent, systematic approach to selling which results in essentially every member of your sales team pursuing opportunities differently.
Do you have variability in execution?
Identify an active sales opportunity where the outcome is in doubt. Write it up as a case study and pass it out to your sales organization. Ask, “What would you do next to move this forward towards a close?” How many answers would you expect to get?
Defects are lost sales. According to our studies, the average closing rate across all industries is approximately 25%.
What is your closing rate?
A 25% closing rate is a 75% defect rate. Is that acceptable anywhere in your organization? So why do we accept it in sales?
Waste are resources not invested where they will produce the greatest return.
What percent of your resources are currently being wasted?
If you’re losing at a rate of 75%, you’re investing a significant amount of resources where they do not produce a return.
If you’re experiencing the above issues, Six Sigma will have a significant positive impact on your sales results.
Applying Six Sigma to your sales process
There are 5 key elements to Six Sigma – Define, Measure, Analyze, Improve and Control. (DMAIC) Incorporating these elements into your sales process will produce immediate, measurable results.
First, what needs improving?
Identify the problem you want to solve. While Variability, Defects and Waste are all critical, if you solve the Variability problem, Defects and Waste will also be positively impacted.
For the sake of this discussion, let’s focus on Variability in execution as the problem we want to solve.
Now that we’ve isolated Variability as the problem we want to solve, we need to use facts and data to identify the root cause.
If the execution of your sales process is based on data/facts and not gut feelings or emotions, gathering the data will be straight forward. If, however, your sales process is not based on data, this will not be possible. The good news is that you’ve identified a problem that you can now solve.
An example of measurable data is how many of your pursuits are a good fit for your company, i.e. in your sweet spot? If you have specific criteria as to what makes a good fit and everyone in the sales team utilizes the criteria, it’s very straight forward to identify what percent of pursuits are a good fit. If your sales process does not specifically state the criteria and how to use them to establish fit, a significant number of opportunities your salespeople pursue will not be a good fit; defects and waste will be high.
Based on the outcome of the Measure phase in our example, we have identified that salespeople do not ensure that customers are a good fit for your organization prior to investing company resources.
Analyze the situation by using the data to determine the root cause(s) of the problem that’s inhibiting your performance.
Why are they not doing this? If you were to ask your sales team, “What criteria do you use to determine if a customer is a good fit?” How many answers would you get? If it’s multiple, you’re close to discovering the root cause of the problem.
Often the root cause can be traced to the fact that they don’t know what makes a good fit, or they do not consistently and systematically filter their pursuits based on fit.
With the root cause identified, develop potential solutions.
For our example, it can be as simple as identifying what makes a good fit, communicating it to the sales team and ensuring compliance.
Test solutions to validate your approach – use data when possible, not emotions or gut feelings. Test with a control group of salespeople to verify the impact of your solution.
Finally, implement your solution, use data to determine the extent of the improvement and to ensure gains are not lost over time.
This is a critical stage; there is a tendency to implement the solution and stop.
The idea is to leverage the key elements of Six Sigma to drive continuous process improvement; it’s not a one-time event.
Applying the DMAIC to your sales process will enable you to experience the benefits of continuous process improvement and minimize the negative impact of Variability, Defects and Waste. Over time, you will find that focusing on your sales process will yield similar, or greater, returns than continually investing in conventional sale training and provide you with a sustainable competitive advantage.
David L. Varner
Founder of The Millau Group Global
Having started his career in engineering and spending the last 20 years in sales training, David is passionate about bringing the consistent, repeatable, data driven approach of engineering to selling.