Category

Articles

Six Sigma and Your Sales Process

Six Sigma and Your Sales Process

I noticed organizations continually invest time and money to improve sales team effectiveness, but which one? 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 more. I concluded they didn’t scratch the itch. There had to be a better, less confusing and practical way to improve sales training.

I reckoned they’re missing the boat. These organizations are often neglecting something as fundamental as basic selling skills. My engineering genes kicked in and determined all these companies needed is a systematic method to continually improve their sales process. It was clear that they don’t have a sales process, and identifying it as a problem is the first step toward fixing it.

Looking back at my personal Six Sigma program I realized that if those principles work in manufacturing, the same systematic approach to continuously and intelligently improve manufacturing should also work in a sales process. It would increase sales, decrease costs and improve productivity.

What is Six Sigma?

Everyone understands the term “sales process.” Few, however, can actually describe their sales process from a Six Sigma perspective. I want sales executives to get back to the basics.

Six Sigma is a structured, disciplined and rigorous approach to process improvement. Six Sigma’s goal 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 sales processes.
Here’s how Six Sigma applies to selling:

Let’s start with this question:  How well does your sales process meet your expectations relative to variability, defects and waste? Variability by definition lacks a consistent, systematic approach to selling. I see this all the time, which results in essentially every member of your sales team pursuing opportunities differently. How would that work in the shipping department?

Do you have variability in execution?

Here’s a simple test: Look at an active sales opportunity where the outcome is in doubt. This happens all the time. Then write it up as a case study and pass it out to your sales team. Ask, “What would you do next to move the sale forward toward a close?” How many answers would you expect to get? You know the answer.
Defects are lost sales, pure and simple. The Millau Group studies show 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 company? So why do we accept it in sales?

Resources are wasted when they’re not invested where they will produce the greatest return. What percent of your resources are currently being wasted? The math is painfully simple. You have a 75% losing rate. Do you see your company in the story so far? If you say “Yes,” Six Sigma will have a significant positive impact on your sales results.

Applying Six Sigma to Your Sales Process

Six Sigma has five key elements – define, measure, analyze, improve and control. (DMAIC). You’ll produce immediate, measurable results if you incorporate these elements into your sales process.

1. Define

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 go away. Let’s focus on variability in execution as the problem we want to solve for the sake of this discussion.

2. Measure

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 you can now eliminate.

How many of your pursuits are a good fit for your company is measurable data, i.e. in your sweet spot? If you have specific criteria on what makes a good fit and everyone in the sales team utilizes the criteria, then 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. Predictably, defects and waste will be high.

3. Analyze

Based on the measure phase in our example, we have identified that salespeople do not ensure customers are a good fit prior to investing company resources. Analyze the situation using the data to determine the root cause(s) of the stumbling block. Why aren’t they 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 they simply don’t know what makes a good fit, or they don’t consistently and systematically filter their pursuits based on fit.

4. Improve

Develop potential solutions after the root cause has been identified. For instance, it can be as simple as identifying what makes a good fit, communicating it to the sales team and ensuring compliance. Test different solutions to validate your approach – use data, not emotions or gut feelings. Test with a control group of salespeople to verify the impact of your solution.

5. Control

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. Leverage the key elements of Six Sigma to drive continuous process improvement; it’s not a one-time event.

I detail this in a new book, “The Sales Checklist,” to be released later this year. At first glance the book will seem almost ridiculous in its simplicity compared to all other conventional sales training available and some might think it’s a little crazy to those who have spent years investing in, or selling, the latest sales training on the market. Rest assured, there is sophistication in simplicity.  It has taken three years to simplify the checklist.

Dave Varner has worked in sales training for 20 years, but that’s not where he earned his stripes. He started out in the trenches, as a robotic systems sales engineer calling on companies in the machine tool and manufacturing industries. He changed careers to work for a major national sales training organization before forming The Millau Group. His engineering and manufacturing mindset drew him to looking at ways to apply Six Sigma principles to selling.

10 Lessons Learned from 34 Years in Sales

10 Lessons Learned from 34 Years in Sales

10 Lessons Learned from 34 Years in Sales

Recently a new salesperson asked me what was the most important lesson I’ve learned regarding selling.  I came up with a few lessons that were top of mind, but that got me thinking, “What are the lessons I’ve learned?” I came up with 10 lessons.

IF I ONLY KNEW THEN WHAT I KNOW NOW!

First, a little context. I began my career in engineering, transitioned into sales engineering, then vice president of sales and marketing for a manufacturing company, followed by a global sales training consultant and finally to the founding of The Millau Group Global.  You’ll see that my approach to selling is as much from engineering and continuous process improvement as it is traditional selling.

Over the last 34 years, I learned 10 lessons – mostly the hard way.

  1. The better you become at losing, the more you will win. Having a closing rate of 1 out of 4, which is the across all industry average equates to losing 75% of the time.  Try to identify one out of the three that you’re not going to win and disengage.  Invest your time where you will receive a greater return. I was told early in my career that, “Dave, you’re a bulldog! You never give up!”  It took me many years to realize that was likely the worst compliment I ever received.
  2. Selling is a process. As such, it is a profession that can be mastered through discipline and study; you don’t need to be a natural born salesperson (if that even exists). A sales process is similar to any other process in your organization. Understand that a process produces data; it’s not good, it’s not bad, it’s data. Use the data to reduce variation, defects (lost orders) and waste (resources expended on the 75% of sales that are lost by a typical organization). There is no room for gut feelings or hope in a process.
  3. Your time is valuable; make certain you’re receiving an acceptable return for the time you spend with your customers and prospects.
  4. The customer is not right all the time, nor do they want to be; they respect a salesperson who tells them no; it builds your credibility and it’s the right thing to do.
  5. Focus on the WIIFM (What’s In It For Me?) for the person you’re calling on; people make buying decisions based on how they are personally impacted. Companies do not make buying decisions. The more the person feels they will be positively impacted with your solution, the more likely they are to want to buy from you.
  6. Seek to uncover or develop trigger events, i.e. the problem the decision influencer is trying to solve with his or her purchase; no trigger event, no sale.  Do this before you discuss solutions or present your product or service. Focus the majority of your sales efforts on how you uniquely solve the trigger event; this is how you differentiate.
  7. Ask for an action. Prior to every customer interaction, based on who you’re calling on and where they are in their buying process, consider what’s the appropriate action to ask for that will move your sale forward. Practice your ask, then execute it. If you get your action, continue, if you don’t, ask yourself why you didn’t and either rectify the situation or consider disengaging. Remember, customers typically need multiple proposals. Even if they’re not actually considering your proposal, you’re likely to hear, “Great quote… We love your company… Just sharpen your pencil…”. Translation? I need four proposals for purchases such as this, so I’m going to do everything I can to keep you engaged and spending your sales time and resources developing a proposal I can use as leverage against who I want to purchase from.
  8. Understand what makes a good fitting customer for you and your company and adhere to it. The earlier you disengage the more commission you will make.
  9. Develop someone in the account who can be your mentor and provide you with guidance on how best to pursue the opportunity. Also, identify and engage the person who owns the budget, the finalizer. If you cannot, understand that your probability of closing is very low.
  10. Don’t be an unpaid consultant. I fell into this trap many, many times early in my career. Surely, if I’m providing this consulting, they must want to buy from me! WRONG! Most customers will take all of the consulting you want to provide. Get an action in return from your consulting. If you don’t get your desired action, consider what that means regarding your probability of closing the order.

If I knew then what I know now…

David L. Varner
Founder of The Millau Group Global
Dave has been a leader in the training industry for over 20 years, speaker and author of the soon to be released book: The Sales Checklist

5 Minutes to Increased Industrial Sales

Overview

Selling in the industrial marketplace presents many unique challenges.  Salespeople are required to have a high degree of technical skills. My first sales position was as a sales engineer for a machine tool and robotic systems company.  I had been an engineer until they put “sales” in front of my title.  To be effective at selling and providing my customers with solutions required that I have a high level of technical expertise.  So far, so good.

 

Challenges for Industrial Salespeople

As a sales engineer, I was most comfortable out on the production floor looking for problems to solve and areas where I could help my customers increase productivity, whether it was a priority for them, or not.  I thoroughly enjoyed my time on the floor because I was in my comfort zone; I was the expert.

This comfort with the technical portion of my job also posed my greatest challenge.  I would spend the vast majority of my time focused on the engineering portion of my title.  What I didn’t recognize at the time, was that I was neglecting the “sales” portion of my title.  I was more comfortable with the “science than the selling” (which also applies to other industries where the salesperson’s job requires special knowledge, or expertise, to be effective).  Looking back, I was often an unpaid consultant for many companies!

 

The impact?

 This technical focus negatively impacted not only my results, but those of my company.

For me, pursuing essentially all opportunities, I was not able to focus on the ones that were likely to profitably close.  Additionally, I was not pursuing net new business.  The opportunity cost was significant.

For my company, I was tying up critical resources, such as engineering, on projects that we were not going to win.  Since I was not alone pursing science projects, engineering’s response time was slow.  Additionally, they didn’t have the available resources to fully support the real projects.

 

The solution?

First, recognize the fact that your sales are currently being negatively impacted by not having an acceptable balance between the science and the selling.

Take a minute to truly understand your opportunity cost of pursuing opportunities that are not going anywhere, or as we used to call them in engineering, the science projects.  The average closing rate in industrial sales is 25%, or a 75% losing rate.  How would your sales be impacted if you could systematically disengage from 1 out of the 4 opportunities you’re currently pursuing? How would your company be impacted if the sales team systematically disengaged from 25% of the pursuits that they’re not going to win?  The answer is obvious, but doesn’t it seem too good to be true?

Second, add one step to your sales calls.  Before executing the sales call, think about whom you’re calling on and where they are in their buying process.  Then, identify what is a reasonable action for them to commit to that supports they are making a buying decision, and you’re seriously being considered.

Once you’ve identified the action that you’re seeking, consider how you’re going to ask for it.  It’s not enough to have identified what action you want, you need to be comfortable actually asking for it.

An action is binary; you either get it, or you do not.  Think of a go/no go gauge.  If you get your action, keep pursuing the sale.  If you don’t get your action, this is an opportunity to sit back and consider if this is one of the opportunities that you’re not going win.  Getting your ask, or getting a no, are both successful outcomes.

There are no “maybes” on a go/no go gauge!  (No matter how hard you push…)

 

Summary 

  • Before any important sales call, meeting, demo, etc., identify specifically what action you’re going to ask for as a result of the meeting. If it’s a team call, share it with all the participants.  Take a few minutes to practice your ask.
  • Once you know what action you’re going to ask for, practice your ask. Ideally role play it with someone.
  • Deliver your ask and seek success. Success isn’t a yes.  Success is defined as either a yes or a no.  Use this data to make an informed decision regarding the next step to move the pursuit forward, or if you didn’t get your ask, use the no as a compelling event to either change your approach, or disengage.

Do this and your sales will increase.

There you have it.  Simple – as selling should be!

7 Deadly Sales Mistakes

Chase customers who are not a good fit

Us salespeople love chasing all sales opportunities that come our way. That is resulting in a mistake. A mistake of chasing opportunities that are not a good fit for us. These opportunities are not likely to move forward or turn into positive ROI. If your sales team is closing 20% (1 out of 5), it’s likely one of those four losses was a poor fit.
It’s also likely that if the opportunity made it’s way down your sales process (assuming you have one) far enough to be forecasted, it met your ideal customer profile on paper. Which means it was likely the right size, in the right industry, used your type of product or service in their business already (manufacturer for example), and are credit worthy or established in their network. These are all characteristics to look for in a customer or prospect, but they are not the reasons salespeople lose or are blindsided by the outcomes.

Not working hard enough to identify AND ENGAGE with active DI’s

With the average number of people involved in a decision to go forward increasing (5-8 depending on your source), we salespeople need to do a better job at navigating through multiple decision influencers and understanding how they’re impacted. Leaders now are catching onto the “buyer persona” or helping their teams understand what drives each role they sell to. For example, “purchasing” is impacted by _________, and the “plant manager” is impacted by this ________ (when talking about a product you sell).
What ’s challenging isn’t identifying influencers (i.e. the people you sell to), it’s engaging with them, and not realizing how not engaging with an influencer completely changes your positioning in moving a sale forward. Simply knowing someone exists and is involved in the decision-making process isn’t enough, you need to ENGAGE with them.

Mis-handing sales tools with the wrong people

Today there are more buyers involved in a single sale, it can be difficult to allocate which tool to leverage, with who, and when. Sales tools are defined in our world as anything you use to differentiate or explain something about your product, service, or both. Traditional marketing material could be considered a sales tool, so could success stories, testimonials, personal experiences, or a specific feature description.
Salespeople can easily sabotage themselves by trying to leverage a certain sales tool with the wrong decision influencer (or “buyer”…whatever you call a person involved in the buying decision). Based on my experience, software salespeople do this quite often (as do many of us salespeople). They’re quick to talk about features of their tool without understanding how someone will use it (if they will at all).

Forcing a demo, slideshow, or deck instead of discovery conversations

Based on our conversations with the market, buyers are tired of being “shown” the next demo, deck, or slideshow from salespeople. Sales meetings are twice as long as they need to be because strategic discussions are not happening.
Instead, ask for a 15-30 minute discovery conversation to help your audience understand how you can impact their business, show off credibility, and exchange questions to shape their vision. Make it a conversation between two or more people, not a show and tell.

Not reminding their prospect of reasons for a change, from start to finish

A reason for change is called a trigger event. Trigger events are reasons for change that your audience experiences on their own or you help them realize. This is the cause of a buying decision. Without identifying a reason for change, or creating one, it’s likely you’ll be treated like a commodity, chase quotes or “science projects” as I call them, or both.
Continuously remind your audience of the reason for change they’ve shared throughout your conversations. DO NOT expect them to remember the one or multiple challenges they have, that’s your job. As a professional salesperson, you’re on the lookout to determine your prospect or customer’s priorities have changed as time goes on. Most salespeople I know would say their sales cycle is months, not just days. So it’s important to keep track of this data by verifying during conversations.

Basing their positioning off of gut feelings or emotion, not data

“They loved the presentation and are really excited about what we could do!”
That gut feeling and emotional response don’t make VP’s very happy when forecasting. Remove the “Grey Area” when it comes to talking about sales.
What did you want to accomplish? What did you accomplish? What’s going to happen next? What are you going to ask for? These are all binary questions for planning a pursuit.

Not asking for the next step

Too often we think we’re asking for something, but we’re leading with information. Why is asking so difficult anyway?

Not proactively seeking coaching from their manager

Always be looking for ways to improve.

Subscribe to our newsletter HERE

Add this skill to blow away your Q4

Add this to your Q4 plans immediately – We can Help

Many of your training and sales leaders are looking how to squeeze every little bit of training, travel, and sales improvement budgets you have left available for the year.

It’s November. Mid Q4; some start to sweat, others are cool and confident in their forecasts and plans.

I’m going to throw you a monkey wrench. Here’s an area of training you’ve not considered…

 

Teaching your team how to ASK with influence and confidence.

In Q4 we will improve your sales team’s ability to ask for what they want and get it.  How would your year-end results be impacted if your sales team was proficient at asking:

  • For the order
  • For the next project
  • For the next meeting
  • To be specified
  • For more of the customer’s business

 

These are real “asks” as we call it.

Like you, we take a hard look at the training industry and what it has to offer. So many sales teams invest in “sales training” to teach them negotiating, buyer profile, prospecting, branding, social selling, and anything else that’s offered in the wide and deep sales effectiveness vertical.

However, how many of those training topics come second to being able to ask for what you want?  How much more effective would your sales team be if they were skilled at developing and delivering influential asks?

Dave Varner and I took a step back and realized that salespeople were coming out of multiple day sales training programs but still couldn’t confidently ask for the order, price increase or even a meeting. That sneaky “gut feeling” of nervousness negatively impacts our level of confidence and influence. It’s the same feeling we had when we had to ask someone out on a date for the first time.

It doesn’t go away. As we age and grow our personal brand and status, the need for asking (not questioning) for an action doesn’t go away. Yes, this is a plug for our workshop, but it should also be a wake-up call to your training curriculum. Our clients come to understand that a sales team without the ability to effectively ask for what they want and get it, cannot maximize their previous investments in training.  Their “ah-ha” moment is that the training they deliver is HEAVILY dependent on the participant’s skills to effectively ASK for something from their customers, prospects, and internal support teams.

Give us 6 hours and we will provide your sales organization with a skill that will move the needle immediately.

Subscribe to our newsletter HERE