If you’re interested in improving sales performance the right way rather than throwing the usual quick fixes at it (training, incentives, threats), then Sales and Marketing the Six Sigma Way, by Michael Webb with Tom Gorman, would be worth your investment.[1]
Don’t be put off by the title. Six sigma is not an esoteric, cult-like system for turning your sales force into unthinking automatons. In practical terms, it’s simply the application of scientific method to understanding your sales processes and finding ways to improve it.
In fact, applied to sales, you might be able to think of it as two sigma. In production systems, six sigma is a quality measure that represents only 3.4 defects per million. Most sales organizations would be happy with a defect rate of one sigma, which is almost 700,000 defects per million. That sounds high, but it’s a close rate of 30%. Two sigma would be an improvement of more than 100%, or a close rate of 70%. These numbers show that there is tremendous room for improvement via the application of some of the tools and techniques outlined in this book—without going crazy. As Webb tells us, “When you’ve got a process operating at one sigma, you don’t have to worry about the design of experiments.”
What you do have to worry about is taking a methodological approach to defining, measuring, analyzing, improving and controlling (DMAIC) your sales process.
Yelling at the thermometer
It sounds like common sense, but it’s definitely not common practice in sales leadership, which often approaches sales problems intuitively, or merely throws training or incentives at the problem without taking the time to understand the underlying process. The way that many sales managers operate is like yelling at the thermometer because you don’t like the temperature.
It’s all about the process
Understanding the underlying sales process begins with mapping your customer’s buying process. How do customers become aware of problems and find solutions to them? In every prospect organization, there is an ongoing discussion about their business goals, the need to improve performance, problems that stand in their way, etc. The sales professional’s job is to contribute meaningfully to that conversation, by providing useful information (often in the form of questions, not simply telling) that helps the customer improve their business and personal outcomes.
Too often, sales processes are undefined, or are defined by what salespeople have traditionally done, or are the default process codified in the CRM system you bought. They are not based on how the customer decides and how you can smooth that path for them.
That in turn drives the definition of value in the sales process. Value is defined by the customer, and Webb defines it simply as “anything the customer will take action to obtain.” When you see value this way, you can design your sales process so that it provides that value at the various stages along the customer’s decision process. This provides measurable and meaningful progress, because it’s now measured not by how busy your salespeople are, but by what actions the customers take along the way.
It also lessens resistance. One of the major sources of “defects” in the sales process is customer resistance, and resistance occurs when customers feel like you are doing something to them, which either does not add value to them or forces them to act before they are ready.
The principles of six sigma are:
- Viewing the sales and marketing process as a production process that produces profitable revenue. When you see it this way, you can apply many of the tools that have been so successful in manufacturing and demystify the “art” of sales.
- Creating value for customers. As discussed above, if customers will take action to get the value you provide at each stage of the sales cycle, the sales path becomes much smoother.
- Managing on data and facts. What a concept. Reminds me of the quote by Philip Dick: “Reality is that which, when you stop believing in it, doesn’t go away.”
- Analyzing cause and effect. See above.
- Minimizing waste and defects. Understanding what activities create value helps you identify and work on eliminating those that do not.
- Collaboration. Sales and marketing, in this view, are not separate, often conflicting silos. The marketing process provides outputs for their customers: salespeople. In fact, Webb’s definition of good marketing is “anything that makes the salesperson’s job easier.”
There is a lot to cover in these six principles, but the book does a good job through detailed case studies that illuminate through example and furnish credibility. In fact, the appendix is worth studying carefully because it has real-life examples of some of the more important tools used. If you specialize in complex B2B sales, the example used can be a little simplistic, but you can extrapolate from there.
A common lament among sales professionals is that sales does not get enough respect as a profession and the major contributor to business success. Perhaps if we can learn to reliably and consistently improve revenue and profits by applying greater rigor to understanding and improving the sales process, that day will come.
[1] The reason I don’t include the hyperlink to the book on Amazon is that a new copy is priced at over $400! Astute shoppers will be able to pay much less.
What will the customer pay for?
The concept of value is central both to selling and to lean methods. But what is it? So, if we’re going to think about applying lean methods to selling, we must first begin with a tight definition.
One excellent definition of value comes from Michael Webb’s excellent book, Sales and Marketing the Six Sigma Way. Webb tells us that value is,
“…that which the customer will take action to get.”
This definition reminds us that the only person who can define value is the customer. So many product brochures seek to define value by product features, yet with many products, customers use only a small percentage of their features. Sometimes, vendors don’t even know why customers buy their solution. Do you? Do you understand exactly how they employ it in their daily work processes? Do you know how it prevents problems, reduces risk, or improves quality, efficiency and effectiveness? Do you know how they might be able to get more value if they use it differently?
These questions apply at the end-result level, of course: you know the customer accepts your value proposition if they buy your solution. But that’s like saying you know your team won because they outscored the opponent. The real power that this definition has to improve your sales effectiveness comes from applying it at the process level.
