Sales process engineering is the engineering of better sales processes. It is intended to design better ways of selling, making salespeople's efforts more productive. It has been described as "the systematic application of scientific and mathematical principles to achieve the practical goals of a particular sales process". Selden pointed out that in this context, sales referred to the output of a process involving a variety of functions across an organization, and not that of a "sales department" alone. Primary areas of application span functions including sales, marketing, and customer service.
Also known as "sales funnel engineering" and "sales pipeline engineering".
Video Sales process engineering
History
As early as 1900-1915, advocates of scientific management, such as Frederick Winslow Taylor and Harlow Stafford Person, recognized that their ideas could be applied not only to manual labour and skilled trades but also to management, professions, and sales. Person promoted an early form of sales process engineering. At the time, postwar senses of the terms sales process engineering and sales engineering did not yet exist; Person called his efforts "sales engineering".
The evolution of modern corporate life in the 1920s through 1960s, sought to apply analysis and synthesis to improve the methods of all functions within a business. After the famous NBC Whitepaper in 1980 titled "If Japan Can... Why Can't We?" the 1980s and 1990s saw the emergence of a variety of approaches, such as business process reengineering, Total Quality Management, Six Sigma, and Lean Manufacturing. Inevitably some of the people involved in these initiatives tried to begin applying what they learned to sales and marketing.
For instance, Cas Welch was instrumental in designing and installing Westinghouse Electric's Total Quality program. As one of the first such programs in American industry, it was emulated by other firms and government agencies. His audits of Westinghouse sales offices caused him to realize companies were mistaken in their assumption that quality applied primarily to products. "Their focus has been to remove the flies from the soup after the customer complains; not to cook the soup without flies in the first place ... when it would be less expensive and time-consuming for the sales person to do it right the first time."
James Cortada was one of IBM's management consultants on market driven quality. His book TQM for Sales and Marketing Management was the first attempt to explain the theory of TQM in a sales and marketing context. George Antoin Smith, Jr. in Naperville, IL, an Electrical Engineering graduate of Purdue University, had been a successful Field Sales Engineer and District Sales Manager of Hewlett Packard electronic components to OEMs. In 1989 George Smith received the HP President's Club Award for career excellence in HPs sales organization. In 1992, he started a consulting company to demonstrate to sales managers how they could tactically measure and improve sales productivity. He also wrote the Sales Quality Audit. Todd Youngblood, another ex-IBMer, in his book The Dolphin and the Cow (2004) emphasized "three core principles": continuous improvement of the sales process, metrics to quantitatively judge the rate and degree of improvement, and a well-defined sales process.
Meanwhile, another executive from IBM, Daniel Stowell, had participated in IBM's expansion from selling hardware in the 1960s and '70s "the only way it knew how, through face-to-face sales" to the company's first use of a market channel in a project known as the "Alternate Channels Marketing Test." The idea was to incorporate direct response marketing techniques to accomplish the job of direct salespeople, and the initiative was quite successful. Notably his story illustrated the need for "consensus management" of the sales team. Traditional ways of managing sales people did not work when team members who had to develop a new way of selling were embedded in 14 different sales offices around the US.
The culture of sales was based on intuition and gut feel, not on data and mathematical logic like the culture of operational excellence. However, many people inside the quality movement could see that the scientific mindset ought to apply to sales and marketing. Paul Selden's "Sales Process Engineering, A Personal Workshop" was a further attempt to demonstrate the applicability of the theory and tools of quality management to the sales function. The book applied Deming's 14 Points and the tools of quality measurement (such as check sheets, run charts, histograms, etc.), in a sales context. While the book did a great job of explaining the management theory, like most of the other books up until this time, it suffered from a lack of real examples demonstrating how such measures had actually helped salespeople sell things.
Then In 2006, Michael Webb wrote Sales and Marketing the Six Sigma Way. With more than 20 years of field sales, management and B2B sales training experience, Webb was the first to explain how the scientific, measurement orientation of process excellence could help salespeople sell.
He pointed out that the purpose of sales is to get customers to take actions, and this is fundamentally different than the purpose of manufacturing. Salespeople have always known they must earn the customer's attention, their time, and their trust if they ever are to get a chance to earn any of their money. Webb pointed out the customer's actions determined whether value or waste had been created. He included case examples of B2B companies whose management used data to make changes that improved conversions by 100% or more. It proved (both to the quality community and to the sales community) that the data-oriented tools of science could help customers buy and salespeople sell. It demonstrated a valuable alternative to management's usual approach of just repeating the "Usual Fixes" such as sales training or CRM, which typically have little measurable or sustainable effect on productivity. The book earned 4.5 stars on Amazon and sold more than 21k copies.
Brent Wahba, an engineer with a background in Lean at GM and Delphi Automotive, also saw that root cause thinking had not yet penetrated the culture of sales and marketing management. His book "The Fluff Cycle," criticized business writers in sales and marketing. He observed that traditional "best practices" approach as well as the insights of sales consultants usually do not work for very long. His point was that this is precisely because they are transplanted from outside the company, rather than being the result of people inside the company improving their thinking about the problems they face.
Wahba's point was not a new one, however. In his book High-Impact Consulting, Robert Shaffer made a resounding statement about all kinds of consulting - not just sales and marketing: "No matter how wise and creative the consultant's analysis and recommendations, they pay off only to the extent that the client does what is necessary to benefit from them. The result is that many consulting projects fail to contribute nearly as much as they might because of the implementation gap, and a great many produce virtually no lasting benefit." As Edwards Deming said "It does not happen all at once. There is no instant pudding."
Scientific methods enable individuals to solve problems. When an engineer succeeds with a difficult problem, he or she can become a hero to his company. It may not really matter if no one else understands how they did it. However, companies require many different people to collaborate if sales and marketing problems are to be solved. And people cannot collaborate without learning and sharing an explicit approach for identifying evidence, generating theories, and experimenting.
Most executives are not taught to pay attention to how their employees think and solve problems. Instead, as described by Brian Joiner in his book Fourth Generation Management, they tend to either dictate the activities they want their people to follow (called "2nd generation" management), or (when that fails) hand down objectives without regard for how they will be achieved (called "3rd generation" management).
Sales productivity has been declining due to changes in their customer's behaviors. For example, Google and the CEB recently reported that B2B companies are avoiding salespeople until as much as 60 to 70% of their company's decision-making process is complete. Companies who study sales and marketing, such as Forrester, commonly admit that chief sales officers are expecting difficulty securing revenue targets. CSO Insights reported that the average sales forecast has a lower probability of winning than a pass bet at the craps tables in Las Vegas. Perhaps it is no wonder the turnover rates of salespeople are often 40% or more.
In this environment, some companies are looking for alternatives. Robert Pryor points out in his book, Lean Selling, that "Lean is a methodology that revolutionizes the processes for producing products and for delivering services, and the Lean Thinking that captures its principles are the most disruptive and transformational management ideas since the Industrial Revolution that began over 100 years ago."
Such advanced management thinking is demonstrating that the principles underlying operational excellence are crucially important to CEOs. That's because the vocabulary and the concepts of operational excellence provides CEOs with the framework to engage their people to improve their thinking. For example, recognizing that results in business are caused by people's behaviors, The Shingo Prize for excellence in manufacturing focuses on the beliefs which cause people's behaviors. The Shingo Model does not begin by teaching people the tools used in process excellence, as has been the norm for 50 years in all forms of process improvement. Instead, it starts by helping people to understand the underlying principles that explain WHY those tools work. For example, "Seek Perfection" is a principle that capitalizes on the natural human desire to want their life to be better. "Embrace Scientific Thinking" is a principle that demonstrates how we all naturally learn. With principles as the foundation, when people find themselves in an area where the tools that were invented for manufacturing don't easily apply (like sales and marketing), they can use those principles to develop tools that are appropriate to solving the problems at hand.
Such an approach does not assume (as most sales training and CRM companies assume) that a process is something handed down to a sales team from outside the company or from someone higher in the organization. Instead, it recognizes that the process must be originated by the people responsible for doing the work. It is their best understanding of how to achieve the objectives the company desires.
This presents unique challenges to managers, and opportunities for businesses. The Internet has revolutionized how companies buy and sell. It is time for sales and marketing management to revolutionize itself through application of rational principles. This is what sales process engineering is about.
Examples of this are found in Michael Webb's 2014 book on the topic, Sales Process Excellence. This privately published work presents more than 40 industry examples from Webb's client case files illustrating in detail why sales and marketing needs operational excellence, and how operational excellence changes and improves sales and marketing management.
Maps Sales process engineering
Future directions
"[http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/competing-through-data-three-experts-offer-their-game-plans Most breakthroughs in performance? are preceded by revolutions in measurement.]" Such revolutions will be enabled by two fundamentally different trends.
The first trend is for businesses to be more deliberately rational in their use of language to define the evidence their marketers and sellers are seeing. No longer can business leaders afford to allow their people to throw around terms such as "customer" or "qualified prospect" without operationally defining them.
Then, as the clarity and consistency of what these terms refer to in reality, the second trend will become incredibly powerful. That trend is the ability to "instrument" the interactions between salespeople and their customers in order to provide visibility to where the problems in the sales and buying processes are located.
For example, today's software products are enabling sales teams to track their activities and the customer's responses at a much higher level of granularity than has ever been possible before. This kind of feedback if used effectively by sales managers has a powerful ability to elevate and sustain a sales team's performance. Examples of this can be found at www.amacus.com and www.hubspot.com.
Sales process
Generally speaking, a process is set of activities, through which work flows, aimed at a common result. Processes define the best known way of doing the work or of accomplishing a goal. Processes are used to create products or to deliver services to customers.
Sales processes are simply a special kind of service. They differ from other service processes in one primary respect. The value created by a sales process is determined by whether or not the recipient of the service takes the action you want them to take. For example, a landing page on a website could be considered a kind of sales process. The headline, body copy, testimonials, and call to action create value to the extent they get visitors to the page to provide the requested information (usually their name and email address, etc.). Likewise a proposal presentation from a sales person creates value to the extent the recipients accept the proposal and buy what is offered.
Rationale
Reasons for having a well-thought-out sales process include seller and buyer risk management, standardized customer interaction during sales, and scalable revenue generation. Approaching the subject from a "process" point of view offers an opportunity to use design and improvement tools from other disciplines and process-oriented industries. Joseph Juran observed that "there should be no reason our familiar principles of quality and process engineering would not work in the sales process".
Unfortunately, while this is true, he failed to also recognize the unique challenge presented by the selling environment, which has made it much less receptive to process thinking. For example, In Management of a Sales Force (12th Ed. p. 66) by Rich, Spiro and Stanton a "sales process" is presented as consisting of eight steps. These are:
- Prospecting / initial contact
- Preapproach - planning the sale
- Identifying and cross questioning
- Need assessment
- Presentation
- Meeting objections
- Gaining commitment
- Follow-up
Such a depiction of the sales process is from the seller's point of view only. This is a huge problem, because customers will not follow a process that does not create value for them . This lack of customer value presents a special dilemma for salespeople. That's because when managers assume processes are to be followed without regard to the value they create for customers, the processes become increasingly difficult to follow. Due to human nature, this arrangement generally guarantees a decay in performance over time.
The more productive arrangement is to provide workers with an objective, along with a process for achieving it, and then to ask them if they can improve the process so as to exceed the objective, or achieve it more easily. This engages the minds of the participants in a self-interested manner that serves workers, managers, and customers alike.
Once salespeople are challenged, as a team, to find better ways to sell, process language is the indispensable means of enabling them to measure cause and effect, identify steps that are problematic, and develop creative ways of improving. They allow the prediction of numbers of sales based on customer actions.
See also
- Sales management
- Theory of constraints
References
Bibliography
- Dawson, Michael (2005), The Consumer Trap: Big Business Marketing in American Life, Urbana, Illinois, USA: University of Illinois Press, ISBN 0-252-07264-2.
- Selden, Paul H. (1997), Sales Process Engineering: A Personal Workshop, Milwaukee, Wisconsin, USA: ASQ Quality Press, p. 23.
- Youngblood, Todd (2004), The Dolphin And The Cow: How To Sell More Faster With Sales Process Engineering, YPS Group.
Source of the article : Wikipedia
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