There are three keys of an effective sales process:
- If you can’t land a deal, the second-best sales outcome is to Lose Fast!
- Focus on uncluttering the sales pipeline provides clarity and an honest assessment of progress
- Defining “how we sell” enables more apparent deal tracking and leadership to uncover stalled deals
As a business leader, you know how important it is to maximize the usage of all your assets. I imagine this applies to any business, but it has a heightened focus in manufacturing due to higher capitalization and, in many markets, very tight margins. As a long-time Sales Executive, the most significant asset I need to optimize is sales resources and processes. This should not be surprising because “those coin-operated salespeople” are highly paid. Managing Sales assets is complicated by unclear daily results (purchase orders) caused by longer sales cycles (I worked in Manufacturing as a Service market and the sales cycle was nine months!). Other functional areas have better daily visibility to asset utilization (i.e., Purchasing has purchase price variance).
One way to best utilize your sales assets is to focus on pipeline efficiency. Ask yourself how much “clutter” of un-closeable or overly optimistic deals you have. By assessing the authenticity of each deal in the pipeline, you provide clarity for the sales team and the business. To start this, coach the sales team to focus on the highest-value deals and purge unwinnable deals. I like to call the latter “Lose Fast.” Salespeople are typically optimistic, which is a good trait to hire for. However, there is a difference between being optimistic and being a “prisoner of hope.” A sales/business leader must lead the salesperson to deal with unwinnable deals and “Lose Fast.”
There are three primary ways NOT “Losing Fast” negatively impacts an organization:
- TIE-UP SALES RESOURCES: How many of you would like more free sales resources? Most people would. You will achieve this by aligning sales to focus on opportunities with a higher probability or margin.
- OVERSTATE OPPORTUNITIES: Many clients I work with have a large pipeline but have a challenge “Closing.” There may be challenges in closing, but typically, the pipeline is bloated with poor or unwinnable opportunities. As a business leader, you must know what can be reasonably closed and when.
- NEGATIVELY IMPACT MARGINS: The longer a deal takes, the higher the probability of competition, and price will become a more significant focus. If there is no clear path to close with YOUR value proposition, you are using up a limited resource and most likely lowering your margin!
So how does one “Lose Fast” while maintaining a robust, profitable, closeable pipeline? Here are three ways to “Lose Fast”:
- TARGET CUSTOMER: When I ran an Electronic Manufacturing Services company, I felt my responsibility was to clearly define with whom we wanted to do business, what problems we resolved, and our differentiators. Salespeople are anxious to help clients and close business but frequently “color outside the lines.” A strong hand in guiding their energy paid off with better business, margins, and commissions. Do you have a clear customer target?
- SALES PROCESS DEFINITION: The way to improve the pipeline quality and ensure you are closing the right business is to have a transparent sales process with appropriate “Stage Gates.” For example, if you have a Sales Stage called “Qualified,” what does that mean? Does it mean they are a good fit? Do you know who the Decision-maker is? Have they confirmed the project is funded? Ensure you do not have to recycle or stop pursuing a deal because shortcuts were made early.
- PARTICIPATE IN SALES CALLS: Due to the complexity of a manufacturing sale, it is natural that leadership get involved in closing deals. But do you know what salespeople are saying early in the process? Their engagement sets the tone for all that follows. By participating in a few meetings at the “approach” or “interview” stage, you can provide valuable guidance that will improve their vetting and not waste time if the opportunity is subpar. When my sales team asked me to attend a “negotiate” or “close” meeting, I also asked them to schedule an early-stage appointment. What better way to ensure the organization is aligned and an opportunity deal is “real” than to personally engage with your sales team and assess for yourself?
If you follow these three steps, you will “ruthlessly manage” your sales team resources and see the value of “Losing Fast!” Not only that, but those opportunities also that do move ahead will be better cared for, nurtured, and closed!
Article is courtesy of Karl Berger, President of – Fractal Sales Solutions