By Karl Berger, Partner, 360 Consulting
As a business leader, you know it is important to maximize all your assets. Sales is an area that could be better utilized. This may be surprising because it is one of the more expensive labor costs. The task is made more complicated because daily results are not as clear as if viewed quarterly, for example. Unlike Purchasing and Operations, where purchase price variance and quality defects are identified and addressed quickly, the result of a sales call meeting may not be felt for some time.
A concept that helps better utilize Sales resources is if you cannot win, the next best thing to do is to “Lose Fast.” In working with many small and medium sized businesses, I find that frequently sales people maintain a pipeline that is filled with overly optimistic opportunities, and spend effort trying to close, even if they do not align with the company need. By refocusing these efforts on accounts that really need your service, you will free up resources and have greater results.
So, how do we apply this and improve Sales Utilization?
What Happens When You Don’t “Lose Fast”:
There are three primary ways not “Losing Fast” will negatively impact an organization:
- Tie up Sales Resources:
How many of you would like to have more free sales resources? Most people would. By aligning sales to focus on opportunities with a higher probability or margin, this will be achieved this.
- Overstate Opportunities:
Many clients have a large pipeline but have a challenge in “Closing”. There may be challenges, but typically the issue is that the pipeline is bloated with poor, or unwinnable opportunities. As a business leader, you need to know what can be reasonably closed and by when.
- Negatively Impact Margins:
The longer a deal takes, the higher probability that there is competition and price will become a higher focus. If there is not a clear path to close with YOUR value proposition, you are not only misutilizing a limited resource, but probably lowering margin!
So how does one “Lose Fast,” while maintaining a robust, profitable, closeable pipeline?
Three Ways to “Lose Fast and Win Later”:
- Target Customer
When I was running an EMS company, I felt it was my responsibility, as the President, to clearly define who we want to do business with, what problems we resolve, and our differentiators. Salespeople are anxious to help clients, close business, and frequently “color outside the lines”. This is good, as long as everyone is aware and supports going after sub-optimal business.
Do you have a clear customer target?
- Sales Process Definition
The next way to improve the pipeline quality and make sure you are closing the right business is to have a clear sales process with appropriate “Stage Gates”.
For example, if you have a Sales Stage called “Qualified”, what does that mean? Does it mean they are a good fit? Do you know who the Decision-maker is? Have they confirmed the project is funded? Etc.
Make sure you do not have to recycle or stop pursuing a deal because shortcuts were made early in the process.
- Be Involved
Due to the complexity of an EMS sale, it is natural that leadership from purchasing, operations, etc. is involved in closing. But, do you know what sales people are saying, and asking, in there initial meetings? This sets the tone foe all that follows.
Many Business Leaders have not been part of a sales call in a long time. What better way to make sure the organization is aligned, and an opportunity is “real” than to personally engage with your sales team and assess for yourself.
If you follow these three steps, you will better “ruthlessly manage” your sales team resource and see the value of “Losing Fast!” But not only that, those opportunities that do move ahead will be better cared for, nurtured and closed!