Profit In Process

This week’s guest post is by Tibor Shanto – Principal of Renbor Sales Solutions Inc., - a recognized speaker, author of the award winning book Shift!: Harness The Trigger Events That Turn Prospects Into Customers, and sought after trainer.

Most sales people are taught that companies go under due to lack of sales. We all know that the reality is that companies fail due to a lack of profits.  But this disconnect is one reason sales people see discounting as an alternative to selling. Reps fail to realize that the 5% discount they give on a deal could be half, or more, of the margin in the sale (why worry, they still get  their commission).

One way to address this is to ensure that you have a detailed, clearly defined and suitable sales process.  This needs to include defined stages that align with the buying process, and clear workflows.

The sales process also needs to align with other processes in the company. While sales does drive orders,  if it is not synchronized with the rest of the organization, there is a real risk to productivity and profits. One example is the waste that results in working at cross purposes, typified by the often found disconnect between sales and marketing.  I recently saw the results of a survey that suggested that 75% of marketing managers do not know what the sales team’s quota is. 

Once the sales process is aligned with other processes in the organization, they can be harmonized and leveraged for further advantage. A good example can be found in environments where production and related resources are directly tied to orders.  Having a logical process that helps sales execute and at the same time delivers predictable and reliable forecasts to production is a definite competitive advantage. 

For example, one of our clients publishes a series of trade magazines. One challenge they face is maximizing revenue from each issue.  Specifically, the more ads sold the larger the issue, but this impacts editorial, layout and other areas of production.  Add to this the fact that the issue has to be locked down many days before publication.

There was a constant to-and-fro between sales and production with sales trying to get one last advertiser in to an issue after the deadline or ads that sales had guaranteed would come in evaporating. Both situations caused havoc for production.

We worked with both groups, analyzing how different ad sales unfolded, the time from start to finish of the process, critical points along the way (go/no-go points), confirmation points and elapsed times from those points to close. This allowed sales to quantify aspects of the sale and establish reasonable probabilities to close from specific events during the sales.

Armed with these facts, we sat down with the production team with two goals in mind. First, was to help them understand in an objective way how a typical sale unfolds,  including critical turning points. Second was to establish a rule and workflow with respect to objectively agreeing which opportunities were to be included by production, based on where they were in the process at a specific point in time prior to publication date.

This allowed production to better plan a given issue, and sales to be more confident in communicating and adhering to deadlines with advertisers.  While there are still instances where sales try to bring in one more ad, production has built in a bit of wiggle to their timelines.

This same approach can be implemented by aligning the sales process with other areas of the company.  It goes without saying, that the same efficiencies can be realised in other environments – JIT or otherwise.  The key is to have a sales process to begin with, one that suits the needs and the type of sale on which the entire organization needs to execute. 

This removes the emotion and subjectivity when it comes to sales predictability, forecasting and driving both revenue and other key objectives of the organization.

Tibor can be reached at info@SellBetter.ca, or + 1-416-822-7781. You can read his blog, The Pipeline and follow him on Twitter @Renbor.

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Tags: Forecasting, Jim Stewart, marketing, organization, processes, productivity, ProfitPATH, profits, sales, sales process, Tibor Shanto

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