More than 85% of the average sales process is pure waste, according to Kevin Klump, Director of Operational Excellence at Parsons & Associates and a certified lean process “sensei.” Klump has applied lean principles in sales organizations all over the world, and says that when he maps out a client’s sales process and develops metrics to track waste, that 85% number (or higher) proves true in the majority of cases.
Given the current crisis in sales effectiveness, it seems that eliminating some of that waste should be a high priority for sales organizations, and lean process promises to help. Unfortunately, applying lean in a sales organization isn’t as simple as sending an employee to a lean manufacturing conference and asking them to apply the principles they learn.
The truth is, applying lean principles to sales process requires an entirely new way of looking at both lean and at sales. Lean manufacturing looks at physical processes that are easy to identify, measure, and quantify. Sales, however, involves a virtual process that more often than not has never been formally identified, measured, or quantified beyond the lagging indicators of win rates and revenue.
In order to gain the benefits of lean within a sales organization, executives must understand their sales organization not just as a line item, but as a business process to measure and improve. Simultaneously, they must gain a better understanding of how lean principles can be applied to virtual processes.
The good news is that the effort is worth it. Klump says the companies he works with often see 60-70% improvements in lead time, and 60% reductions in waste both in terms of cost to sell and time invested. Let’s take a look at the principles behind how he accomplishes these gains.
Pain in the sales process indicates an area where the process can be improved. Pain can be unhappy customers, loss of market share, or failure to meet quotas.
Conflict refers to anything in the sales process that creates friction between what should be happening and what actually happens. An example is when the situation arises that entering the correct information into the CRM won’t give a salesperson the result they need, so they enter wrong information instead. Another common conflict is a situation where a salesperson makes more money for the company but less for him/herself than another representative, due to the product mix or other elements of how it’s been set up.
Waste is the most commonly talked-about element of lean process, partly because its elimination is one of the primary benefits of lean. In a physical, manufacturing setting, waste is easy to identify—it’s materials, labor time, and rework. In a virtual environment like a sales process, it’s a little harder to get a handle on. Examples of waste in a sales process include unnecessary turn-over due to poorly constructed compensation systems, money and time spent on sales deals that should have been disqualified much earlier, and activities or training engaged in by salespeople that don’t move the needle.
With a solid understanding of how lean principles apply in a virtual process, sales executives can take the next step toward implementation, which is to thoroughly document their current process in a way that allows them to measure and improve it. For that, organizations need the right tools and technology.
Membrain was designed to help organizations view their sales approach as a process, and to make it easy for them to document, measure, and optimize it. With the right data and measurements, organizations can readily see where their teams and customers experience pain, conflict, and waste, and use the insight to continually improve process and, therefore, effectiveness.
George is the founder & CEO of Membrain, the Sales Enablement CRM that makes it easy to execute your sales strategy. A life-long entrepreneur with 20 years of experience in the software space and a passion for sales and marketing. With the life motto "Don't settle for mainstream", he is always looking for new ways to achieve improved business results using innovative software, skills, and processes. George is also the author of the book Stop Killing Deals and the host of the Stop Killing Deals webinar and podcast series.
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