The CEO’s Anchor – Control of the Sales Process
“Valued Shareholders, I regret to inform you that 2013 sales and profits will not match the forecasted or expected results.”
Statements like this keep CEOs up at night quarter to quarter. Ironically, many CEOs who are otherwise experts on their income and balance sheet, often blindly accept sales and revenue forecasts from their sales executives. When those forecasts don’t live up to reality, it is the CEO who has to explain the “disappointing results” to both shareholders and the investment community.
Why would otherwise savvy executives leave themselves open to this kind of embarrassment? What can be done to extend the CEO’s control to revenue generation (sales process)?
Not About the Right Product
Many CEOs still believe sales is all about offering the right product to the right relationships, What’s more, some think a sales force with lots of personality will win the deal, instead of a well-defined process in the hands of well-trained and competent sales people.
In part, these beliefs are held by CEOs who have not had experience in the sales function; they have not made the sales process a strategic part of growing revenues. Also, many sales trainers advocate teaching “techniques” as silver bullets to land sales opportunities.
Sales is a process— a process of specific events, and it is measurable in terms of progress toward a successful outcome. Significant research exists on the sales process. Buyer behavior and seller behavior patterns leading to successful sales are well documented.
World-Class Sales Organizations
For the past ten years, Miller Heiman has carefully studied what makes sales organizations become world class (2013 Miller Heiman Sales Best Practices Study Executive Summary, The Growing Gap Between Good and Great https://pleinairestrategies.com/wp-content/uploads/2013/06/2013-SBPS-ExecSummary-v10.pdf).
As a result of this work, we can now identify key factors that need to be in place to generate a winning strategy. At the core, stands the customer/client. Knowing who they are, and how and why they buy, is critical to the sales process.
Success rests on how effectively your sales team interacts with both customers and prospects. When a sales process reflects this world-class research, expect measurable, predictable results.
A valid sales process maps a way for your sales force to create a vision of a solution in the mind of the buyer. Such a vision is aligned with how your customer buys, rather than how your sales force wants to sell. It allows the buyer to conclude, when you involve him in the process, that your products and services are the best solution. Along the way, it provides your sales force with all the necessary tactical tools for success including how to:
Allocate sales resources
Qualify the buyer and their commitment to the sales process
Manage the sequence of events and different individuals slated to weigh in on the decision
Track progress in the sales pipeline and compare to forecasts
Manage the milestones toward a successful sale
Improve Closing Ratios 86%
A valid sales process also provides management with the ability to forecast the outcome of a sales event on a given opportunity basis; that is, a specific prospect and a specific sale. One of our clients, a large financial services company, implemented a process that resulted in taking 36 percent of prospects out of the sales pipeline. That one step improved their closing ratio by a whopping 86 percent. Our client’s sales people were confusing activity with results, wasting valuable resources, and running up costs.
Revenue and sales forecasting is only the cumulative measurement of how well a corporation implements its sales process. Not surprisingly, disappointing results often reflect the absence of an underlying sales process in place. Here is a simple test: Ask a group of executives to write down the corporation’s sales process.
When responses are compared, it is not unusual to discover widely divergent answers. At best, this indicates no agreement on the sales process. At worst, no sales process at all. Yet the CEO will make public pronouncements concerning sales and revenue forecasts in such a vacuum. And we wonder why shareholders and Wall Street analysts are a restless lot.
Benchmark World-Class Organizations
How can a CEO tell if a valid sales process is in place? If one exists, how does he know if it is based on a predictable series of replicative events, and can it measure results?
Take confidence in knowing that these benchmarks represent a valid sales process:
Marketing and sales align to what your prospects want and need.
Your company offers a formalized value proposition that is compelling to your prospects.
Your sales people clearly understand prospects’ issues before any solution is proposed.
Senior management easily and accurately evaluate specific opportunities in the pipeline.
Senior management pinpoint why top performers are successful.
Your organization effectively allocates the right resources to close large deals.
You develop specific criteria to define an important client to your company.
If you would like to see how your sales organization measures up to world-class organizations, click on the link and test your situation.
Accuracy Benefit of a Companywide Sales Process
Accuracy in your pipeline moves up exponentially when you rely on a solid sales process. Many organizations view accurate forecasts as a difficult challenge to overcome. However, more than two-thirds of sales leaders at world-class sales organizations are confident they predict sales with accuracy.
“Our forecasts are highly accurate”
Sales Process Payoffs
Once in place, the sales process becomes the beacon for sales managers and CEOs because they:
Recognize where to allocate limited resources for the greatest return.
Assess available information about the sales opportunity.
Identify critical next steps to progress through the sales cycle.
Facilitate win/lose reviews that improve future sales actions.
Improve forecast accuracy.
A sales process is one corporate asset that keeps paying benefits. For example, when implemented across the entire organization, a sales process automatically guides companies toward “customer focused” thinking and behavior.
When your sales force, customer-facing support staff, and management trained in a customer-focused process, they begin to probe for real issues. They learn how to tie the customer’s vision of his solution to the company’s products and services. Add in focus on best practices and you will quickly see an increase in overall productivity.
With so much business done overseas today in pursuit of emerging markets, a solid sales process can transcend language and cultural barriers because buyers buy in similar ways. When you implement a single sales process worldwide and use common sales language, sales forecasting becomes more accurate and dependable. Plus, you’re better able to manage customer relationships and that contributes to long-term profitability.
Like any process, a sales process must be repeatable, manageable, consistent and sequential. A well- designed process can transform your company’s products and services into continuous revenue in a cost-effective way.
For those CEOs who have embraced a sales process and communicate it throughout the organization, it’s likely they will never lose sleep nor utter the opening words of this post. We salute you.
See you on the upside, Bill