By Carl Moe, founder of CRO Success, an organization dedicated to developing and delivering the tools, processes and systems CRO’s need to succeed.
Business expert W. Edwards Deming said it best, “If you can’t describe what you are doing as a process, you don’t know what you are doing.”
Most CEO’s understand Deming’s wisdom and apply this concept to many aspects of their business … except in sales. Sales is typically viewed as an independent variable (or necessary evil) and, therefore, not subject to the same level of process scrutiny. The default menu of sales “McFix” options typically range from motivational speakers to incentive trips around the globe, with the rest of the company being upset when sales is not performing but still getting endless perks!
The reality is sales is a system-level activity just like other business systems. All business systems (production, inventory, quality, global distribution etc.) are:
- Built on Competence and Expertise
- Include Process Accountability and Diagnostic Controls
Business systems typically operate as “closed-loop activities” to ensure performance within acceptable standards. Obviously, most systems operate entirely within the four walls of the business, but sales performance is based on those outside variables called suspects, prospects and customers. However, the business systems definition still applies.
I have enjoyed the opportunity to frequently address executive groups about “What is a Revenue System?” The reality is most companies believe they have some form of revenue system in place today. These “systems” are typically a collection of old and new, one-time and repeat activities, designed and implemented in reaction to the business evolution pressures that got the company where it is today. They were the best option available on the day they went into service, and perform at a level today that keeps the CEO awake at night. These are best described as 1.0 level systems. 2.0 level systems are based on the four core processes of an integrated closed-loop Revenue System. These processes define how you:
- Go to Market – The sales process for engaging, qualifying and closing new business is based on your Differentiating Value; this is what sets you apart from the competition and makes your worth more.
- Deliver a “bankable forecast” with rep-level accountability and an audit trail for each forecast item. Forecast probabilities are 0, 25,50,75, or 100 percent based on prospect responses to the Critical Qualifying Questions developed as part of #1. No more “emotional float” in the forecast numbers.
- Design results-based incentive plans to drive business growth by eliminating the “one size fits all” commission plan. New account business is always worth more, so the first step is to build separate hunter (new business) and farmer (account manager) plans. Hunters make the phone ring – farmers answer the phone. These are different sales roles requiring different performance-incentive models.
- Identify and select the right sales talent for your business. You never see a bad sales resume but that doesn’t mean he or she can sell. Defining how reps sell, how reps forecast and how reps get paid in your business (1, 2 and 3 above) collectively defines the skills and behaviors required to be successful in your business. This establishes the bar for using Web-based screening tools to eliminate the wannabes even before you start the interview process.
The graphic to illustrates the 2.0 model and how the four core processes are connected. Companies do not have to be world-class in all four processes to see performance improvement. Most see their process disconnects immediately once they take a systems approach. Unfortunately there is no “auto-pilot” option upon completion.
Carl is the author of ; this post was pulled with permission from that book. To read Carl’s blog, click here.