Sales process

A sales process, also known as a sales tunnel or a sales funnel, is a systematic approach to selling a product or service. A growing body of published literature approaches the sales process from the point of view of an engineering discipline (see sales process engineering).[1]

Reasons for having a well thought-out sales process include seller and buyer risk management, standardized customer interaction in sales, and scalable revenue generation. A major advantage of approaching the subject of sales from a "process point of view" is that it offers a host of well-tested design and improvement tools from other successful disciplines and process-oriented industries.[2] In turn, this offers potential for quicker progress. Quality expert Joseph Juran observed, "There should be no reason our familiar principles of quality and process engineering would not work in the sales process".[3] A sales team's fundamental job is to move a greater number of larger deals through the sales process in less time.[4]

Specific steps or stages in a sales process vary from company to company but generally include the following elements:

  1. Initial contact
  2. Application of Initial Fit Criteria
  3. Sales lead
  4. Need identification
  5. Qualified prospect
  6. Proposal
  7. Negotiation
  8. Closing
  9. Deal Transaction

An alternate but similar series of steps is as follows:

  1. Prospecting/Initial contact
  2. Preapproach- planning the sale
  3. Approach
  4. Need assessment
  5. Presentation
  6. Meeting objections
  7. Gaining commitment
  8. Follow-up

These eight steps of the sales process is more current/accurate compared to traditional sales. These are the typical steps taken, which are usually obtained in the same order, however can vary depending on the current situation. These steps of the sales process are given (pg. 66) and explained in one of the most influential sales textbooks written by Gregory A. Rich, Rosann L. Spiro, and William J Stanton, entitled "Management of a Sales Force" Twelfth Edition.

Mapping a process provides a starting point for further careful analysis and continuous improvement.[5] Diagramming a process flow is considered to be one of the seven basic quality improvement tools.[6] Elements in the list above (among many others) have been described and/or flow-charted in the published literature. Some examples have primarily focused on functions performed by a sales "department".[7] At least one cross-functional approach depicts and integrates a variety of interdependent areas, such as sales, marketing, customer service, and information systems.[8]

From a seller's point of view, a sales process mitigates risk by stage-gating deals based on collection of information or execution of procedures that gate movement to the next step - Of the large number of initially interested persons on the narrow end of orders only a fraction of the initially interested people remain and actually place an order[9].. This controls seller resource expenditure on non-performing deals. Ideally this also prevents buyers from purchasing products they don't need though such a benefit requires ethical intentions by the seller. Because of the uncertainty of this assurance, buyers often have a buying or purchasing process. The interface between the selling and buying process has also been diagrammed.[10]

A formalized sales process is generally more common for companies that either have complex sales cycles, large revenue risks that require systematic assurance of revenue generation, and/or those that choose to use a more consultative sales approach (e.g. Saturn, IBM, Hewlett-Packard).

An effective sales process can be described through steps that walk a salesperson from meeting the prospect all the way through closing the sale. Often a bad sales experience can be analyzed and shown to have skipped key steps. This is where a good sales process mitigates risk for both buyer and seller. A solid sales process also has the dramatic impact of forecasting accuracy and predictability in revenue results.

Many companies develop their own sales process; however, off the shelf versions are available from a number of companies in the sales performance improvement industry. A large number of these methods have been described by their promoters in books available to the public, primarily addressing tactics employed by an individual sales representative.[11][12][13] These provide a customizable process and a set of electronic tools that can be freestanding or can be integrated if required with the company's SFA, CRM, or other opportunity management system.

References

  1. ^ Paul H. Selden (1997). Sales Process Engineering: A Personal Workshop. Milwaukee, WI: ASQ Quality Press. p. 23. ISBN 0873894189. 
  2. ^ William H. McNeese and Robert A. Klein (1991). Statistical Methods For The Process Industries. Milwaukee, WI: ASQC Quality Press. ISBN 082478524X. 
  3. ^ Selden (1997). p. xxii. 
  4. ^ Todd Youngblood (2004). The Dolphin And The Cow - How To Sell More Faster With Sales Process Engineering. Acworth, GA, The YPS Group, Inc.
  5. ^ Dianne Galloway (1994). Mapping Work Processes. Milwaukee, WI: ASQ Quality Press. ISBN 0873892666. 
  6. ^ Arturo Onnias (1992). The Language of Total Quality. Castellamonte (To), Italy: TPOK Publications on Quality. pp. 190–191. 
  7. ^ George A. Smith, Jr. (1995). Sales Productivity Measurement. Milwaukee, WI: ASQ Quality Press. ISBN 0873893336. 
  8. ^ George A. Smith, Jr., Paul H. Selden and Fred Burton (2003). Systematic Selling: A Process Map Portfolio. Kalamazoo, MI: Systematic Selling, Inc.. 
  9. ^ The Sales Funnel - Keeping Control of Your Sales Pipeline - Leadership Techniques from Mind Tools
  10. ^ Paul H. Selden (November 2000). "The Power of Quality Thinking In Sales and Management". Quality Progress: 58–64. 
  11. ^ Michael T. Bosworth (1994). Solution Selling: Creating Buyers In Difficult Markets. New York, NY: McGraw-Hill. ISBN 0585048193. 
  12. ^ Robert B. Miller, Stephen E. Heiman and Tad Tuleja (2005). The New Strategic Selling: The Unique Sales System Proven By The World's Best Companies. Boston, MA: Business Plus. ISBN 0688043135. 
  13. ^ Neil Rackham (1988). Spin Selling. New York, NY: McGraw-Hill. ISBN 0566076896.