Six Sigma Selling

The Secret Reason Your Company's Sales Process is Not Working, and What You Can Do to Fix It Now

Recently, in the boardroom of a major corporation, my friend Steve was recommending the roll-out of a sales negotiation program from Think! Inc., an internationally-recognized business negotiation training and consulting firm. The company's Senior V.P. of Sales was there, along with his directors of sales operations, CRM, sales training, plus several regional vice presidents. Laptops were open and papers were being passed around as they combed through Think! Inc.'s proposal.

"So, tell me, Steve," the sales trainer began, "We've spent an awful lot of money on our sales training and software. How will you integrate your negotiations approach into it so we can preserve our investment in training and software?"

There was a pause as Steve collected his thoughts.

"I understand what you are asking," Steve said carefully, "yet I don't think it's the right question." He paused again briefly.

"Is this about getting bigger and better deals and landing them faster for your company, or is this about perpetuating your current sales training?"

The Senior VP looked up. He slapped his laptop shut. He leaned back in his chair. The room went silent.

"Do your shareholders reward you for being consistent with your current process," Steve continued, "or, do they reward you for better business results - which start with better business deals?" 

The answer was obvious, but so was the Senior V.P.'s concern. Steve definitely had everyone's attention.

"If you had to choose between the two, would there be a choice?"

Steve paused for effect and then continued, "I don't think so. The right question is not about preserving your investment. If the investment in your current approach were working as well as you'd like, I doubt we'd be talking right now."

"The right question is more like, 'How can the Think! Inc. approach help you obtain higher-margin deals more quickly, so you can get a better return for your investors?'"

Avoid the Dangers of the Functional Mindset

Steve had touched on a critical secret of the sales process. Most companies believe their sales process is connected to results. With a little prodding, however, they'll admit that their marketing process aims to optimize marketing, while their sales process aims to optimize short-term revenue. In other words, they are trying to optimize different functions with their processes. 

When "processes" aim to optimize "functions," they become disconnected from results in subtle, yet painful ways. Steve's situation above is one example. The sales trainer's instinct was to preserve "the existing investment." In fact, she should have been looking for just the opposite: what needs to be changed in order to improve the company's performance? 

Consider which of these additional situations are occurring in your company:

- Does your marketing department produce piles of product-
   focused collateral that does not solve problems or help
   people buy (and do your marketing executives wonder why
   no one reads it)?
- Does your company conduct branding campaigns that inflate
   egos and create "awareness" (while salespeople are
   fruitlessly turning over rocks attempting to find
   opportunities they can sell)?
- Is one of the marketing department's goals to reduce the
   cost of leads (without knowing whether low-cost or high-
   cost leads generate more or fewer sales, or high or low
   margin sales)? 
- Does your firm mandate sales training that ignores
   fundamental problems of the sales job (and do managers
   wonder why behavior recedes so quickly in the field)? 
- Do your sales executives struggle to negotiate with
   internal department managers who are rewarded only for
   protecting the company's interests (meaning, the sales
   department's "whining" is ignored)?
- Has your company spent enormous sums on vast and complex
   software systems that do not help salespeople sell (and
   then management wonders how to get people to use them)?

The list of problems brought on by the functional mindset is huge. If you said "yes" to more than two or three of the examples above, you are suffering from it. The functional mindset disconnects the sales process from the results because it drives people to try to become more functional, without changing any of the underlying … functions.

Like Steve's client, most companies just assume that the parts of their marketing and sales process are working. Since they only measure the end result, they don't really know how easily prospects take the intermediate steps toward the sale. The "sales process" is literally disconnected from that information.

To be sure, the company believes its "process" works. Yet, knowing if it works (and how well it works) requires measuring something about the actual flow of leads and qualified opportunities through at least some of the stages. (Assigning arbitrary "percent chance of close" to each stage doesn't count - and is a huge mistake in any case.) A process without measurements is really just a set of activities people feel they must preserve and protect.

Connect Your Sales Production System to Results Now!

The alternative to the functional mindset is a true process approach. It starts with the recognition that your company is a system of moving parts whose purpose is to make money (value) by finding, gaining, and keeping customers. It seeks to identify how all the moving parts interact so as to optimize their effect on the overall system.

One dramatic advantage of looking through the process lens is that it links the activities to the results at intermediate stages by identifying the outputs (results) that can be measured at each stage:

- Are you finding and nurturing enough relationships
  (process) to generate the quantity of qualified
   opportunities (output) necessary for the sales department
   to make its goal? How do you know?
- Are you converting enough of those qualified
   opportunities into orders (process) at satisfactory
   margins (output)? How do you know?
- Are you managing customer relationships well enough
  (process) to generate enough ongoing revenue,
   testimonials, and referrals to make your goal (output)?
   How do you know?

Implementing a process approach means, of course, that your people will have to be crystal clear on terms such as "leads" and "qualified opportunities." People need to spend the time to hash out the details of how things work now, and how to improve them.

The reward of a well-designed process is getting the results in the fastest, cheapest, most effective way possible. That's because the process approach considers both your company's and the customer's interests at every stage.

Many companies are surprised to find they have been getting in their own way. They learn that many of their sales challenges result from focusing on what they want to do, instead of what the customer is ready to do. They learn to reconsider their sales process from the buyer's perspective:

- Why should we (the prospect/buyer) read your ad or your collateral?
- Why should we believe anything you say?
- What good are you to us?
- How can you help solve our problems?
- How will you minimize our risk?

These questions focus the seller on the right priorities (those of the customer). They highlight the basic blocking and tackling of sales and marketing: Unique Selling Propositions, testimonials and case examples, focusing on the customer's perspective of value, reversing risk through guarantees, and so forth.

While answering these questions, sellers will also address issues such as:

- What action do we want the customer to take? 
- Why should they do what we want them to do?
- What can we offer that will help them do what we want them to do?
- How will we know if we've succeeded?

The best strategies help customers to move along a path of incremental steps, such as opting into a newsletter, attending a teleconference/seminar, filling out an assessment, taking a sales call, providing coaching information, supporting a proposal, negotiating an agreement, and eventually, writing a testimonial.

Learning to connect your process to those results (the customer's baby steps) is the key to unlocking the flow of customer actions to make your sales funnel flow faster. That is because you can examine the causes and effects, and change what needs to be changed.  It enables you to spot bottlenecks early, when the problems can still be fixed. Further, you won't have to fix things that don't need fixing. 

Michael J Webb
Sept 26, 2006

Internal Negotiations: A Battle the Sales VP Cannot Fight Alone

A consultant I know is struggling to help his client, a sales vice president. 

"We've got one hell of a problem with internal negotiations," the sales V.P. said. He saw it as his number one problem, preventing him from making his numbers.

My friend was asking me how we could get the other members of the company's executive team to identify the problem as well, so it could be prioritized and solved.

The question is a good one. There needs to be a way to identify the problems/symptoms in terms the other executives would recognize and respect.

I touched on this in my article “How to Avoid the Four Mistakes of Sales Process Mapping.”  One of the examples (the second one, called "contracting") was from an insurance company. They had this enormous administrative procedure designed to cover their own bottoms. They wanted the customer to sign a complicated document four or five times, and this document wasn’t even an order!

And they were wondering why their sales department wasn't making its numbers. When I probed around the idea of doing things the customer wanted instead, the people I was dealing with steadfastly resisted. It was not their job to challenge the system.

Of course, that company doesn’t exist any more. But here is the thing: the CEO was not involved in our little process mapping project. The team we were dealing with had a charter to make better sales training and some sales tools.

Like most, these managers lived in a world where their function was seen as essential. It was subservient only to the two dimensions of financial statements and corporate politics. In a sense, they lived in "flatland," and literally could not see, much less solve the problem.

To fix this insurance company's sales problem, the CEO would have first had to recognize it as one deserving his or her attention.

Second, they would have had to also recognize that for a sales process to work, it must create value for customers. Activities that do not create value for customers must be made subservient to ones that do. Or else, if customers have any choice, they will go somewhere else.

Thus the dilemma my consultant friend faced trying to help his Sales V.P. client.

The process approach adds a third dimension to the system: value to the customer. My consultant friend needed to help his Sales VP to get the CEO to understand. This is a reality the Sales VP cannot fight alone.

Michael J Webb
September 14, 2006

A Must Read for Marketing/Sales/QA Managers, and Also for Senior Executives and MBA Students

The following was posted on Amazon yesterday by a CEO in California:

Most CEOs/COOs/CFOs would agree:

1. Marketing/Sales is both an art and a black box, or even a black hole as it seems to be a continuous cash guzzler.
2. Sometimes CEOs feel they are captives to the Sales VP because even though they are not happy with their sales performance, firing and replacing them with new ones is not a sure win.
3. Marketing campaigns are like shooting in the dark. If you don't shoot, you will not catch anything. But if you keep shooting in the dark, pretty soon the bullets will run out. Most CEOs feel their Marketing VPs are "addicted" to all those fancy marketing programs without assured ROI.
4. VP/Marketing and VP/Sales are like a divorced couple. The best way to pacify them is to keep them separate forever. But how can CEOs afford to do that?

Systems Thinking Guru Russell Ackoff once said that the System cannot detect its own problem and it must be detected from a high order system level. Marketing and Sales VPs cannot solve their own dilemmas and problems, it requires the CEO/COO/CFO in conjunction
with other functional VPs to work together in a systemic way.

However, among all the functional disciplines, Marketing and Sales are the two most mysterious and hard to understand arenas for the whole executive team. "Sales and Marketing the Six Sigma Way" is the first book ever that not only presents the real CORE of the respective Marketing and Sales function in an easy to understand system way, it also reconnects Marketing/Sales function with the rest of the business in a systemic manner. The introduction of "Customer Value Mapping" in the whole Marketing/Sales process is truly a remarkable contribution by the author, Michael Webb. I personally first saw that idea on Webb's business website 18 months ago and applied it to the company I worked for and realized an unbelievably rewarding result.

A side benefit of reading the book is that with Webb's superior writing style people can easily absorb the whole idea of Six Sigma and Lean Management without going through all the terminology and jargon commonly found in other books on Six Sigma. This is a very important feature of the book as its main appeal should be for all corporate executives and Marketing/Sales managers, not just QA coaches.

Among over 100 books on Marketing or Sales that I have read since 1990 after founding my own company, this book is definitely on the top. It will also be a great companion book for MBA students to get bridged to the real challenge of the business world and get well trained with a systemic framework that has rich real world success track records, including my own company's fantastic experience.

C.T. WU, Ph.D. in E.E.
www.sohoware.com
Santa Clara, California
September 11, 2006

SellingPower Praises the Book

This morning, thousands of people found an article titled "How to Apply Six Sigma to Sales" as the headline article in SellingPower.com's email newsletter.

Of course it is a mini-review, and writer Heather Baldwin has done a great job. She boiled the concept down to a tasty six hundred and thirty words. Plus she provided an "easy to get" example from HSBC Bank (thank you Jon Theuerkauf for that great example!).

You can read the article at the following link (though you may need to provide a log in):

http://www.sellingpower.com/html_newsletter/sales/article.asp?id=2575&nDate=September+5%2C+2006

Thank you, Gerhard Gschwandtner and Heather Baldwin of SellingPower for making this your headline piece!

Michael J Webb
September 7, 2006

Why Don't Six Sigma Training Companies Sell the Six Sigma Way?

A prominent Six Sigma training company recently packaged their 16-page color brochure along with an issue of an internationally recognized process improvement magazine. Inside, the "Message from the President" read:

"Dear Valued Customer:
"We wanted to bring you up to date on a few of the experiences we've had at [Our Company] these past few months. We've been working with global companies that are expanding their Six Sigma companies to include DMADV--especially in transactional companies. We're also working with organizations that use process management to help with acquisitions and other strategic initiatives. Additionally, we've taken on many exciting new projects, including Voice of the Customer (VOC) and process management assignments in which we're working with executive teams to structure an enterprise-wide initiative. ..."

Be honest ... instead of reading that, didn't you skip to here looking for the point?

Now, I'm sure the good people in this company are extremely educated about traditional process improvement. Yet whoever wrote that doesn't know the first thing about process improvement in marketing and selling. This paragraph (as well as the rest of the brochure) is a classic example of how to waste tons of money: be self-absorbed, product focused, and boring. 

What value is created for you in the paragraph above? Why should you read it?

The answer is none, so you won't read it. It is self absorbed. It offers vague generalities (blah) instead of specifics (punch). There is no call to action in the entire piece, so it literally has no point! Even if the piece produces some minimal return (which is doubtful), as a prospect you didn't pay for this effort with your attention, or your time (much less your money). As a result, it mostly adds noise to the world and consumes trees, which amounts to waste (who can afford that these days?).

Of course they are not the only ones with this problem. This style of promotion is common, especially in the Six Sigma industry, unfortunately (though not all the companies are this bad). Further, selling process improvement is far from easy (ever try to sell diet and exercise?).

Still, violate the axioms of process improvement at your own peril. The first axiom of sales process improvement is the same as all the other kinds of process improvement:

"Everything you do to find, gain, and keep customers must create value for them!" 

Why couldn't the brochure have contained headlines like these:

• Simple Design Decisions That Reduce Time to Market 33%
• Unique Training Makes Managers Effective in Half the Time!
• Three Companies Solve Six Sigma's Dirty Little Secret: How to Sustain the Gains

There is only one way to know if you've created value for customers and prospects: you get them to take an action. The first action is giving you their attention (if you've earned it). The second is giving you their time (you've got to really earn this!). Then, and only then, can you have the opportunity show them why they should spend their money. 

In sales and marketing, everything else is muda (waste).

Michael Webb
Sept 4, 2006