FIFO and Project Management Failure
In a conversation at lunch with my first client that is still a client, we started to talk about all of the ongoing projects in the company outside the scope of my delivery and what is keeping them for accomplishing them.
I discovered that my client falls into the classic seven-eigthers group that most companies become part of when they cannot complete even one project before the next idea and direction comes from the top. Hence they only get 7/8 of the projects completed and then are surprised when there are still in the same position they were two years ago. Their agility and ability to move forward is non-existent.
Ever been told to finish what you start? FIFO is an accounting term for First-In-First-Out and if you apply that same principle to project management then every new good idea would see success because it would be placed at the bottom of the pile before it would be addressed. A simple practice that if re-purposed would help companies maintain their agility in the market place.
I am proud to report that all projects managed by me as it pertains to building their sales engine have been completed on schedule and the client is currently experiencing an increase of 38% in revenues over the same period last year.
How to Become An “Opportunity Creator”
A mentor recently reminded me that the word “sales” is not always perceived well when used in a conversation. It is unfortunate but true because some “sales people” have ruined the reputation of all of us through non-standard practices that are remembered and shared with others. Even those companies and employees that I coach have trouble being called “sales people” even though what they do does have an impact on company revenues. Maybe that is why most businesses do not even print the word “sales” on business cards.
The primary duties of anyone in the business development field is to create opportunties for their company by finding a need in the marketplace and filling that need the products or services that their company offers. How do you do that without being “sales’ like? I would offer that the activities that you do have an impact on how you are perceived and that some of the best sales people I have know have never been described to me as “sales people”.
What do these people do differently that leads to increased opportunities for their companies?
- Perform strategic business reviews with current clients that helps them understand how you have added value to their business and what other services you offer
- Conduct lunch-n-learn sessions for account managers in other companies that can refer you to opportunities in their client base.
- Schedule breakfast and lunch meetings with centers of influence that are secondary stakeholders in targeted companies you want to work with.
- Focus your free time and champion a non-profit by volunteering your services to help with their fund development.
- Ask current clients for referrals.
- Introduce your clients to prospects, strategic partners, and other service providers that help them grow and improve their business.
- Make sure all of your family and friends know what you do.
Working any of these tactics into your activity calendar will help you increase your opportunities without the traditional sales tactics that are taught in videos and highlighted in the movies.
How can they be called “Salespeople”?
Salespeople spend most of their time on non-revenue producing activities. Really?
A recent study found that salespeople spend more than 70% of their time doing things other than selling. Our research found that salespeople spend, at most, 30% of their time in face-to-face selling. The rest of the time is spent handling administrative tasks, making collections calls, resolving logistics issues, attending meetings, and filling out reports.
How can we call these folks “salespeople” anymore when less than half of their time is spent selling? Maybe we should call them “support account administrators who occasionally sell.” Who is at fault–salespeople or management? Finger pointing does not really accomplish much other than scapegoating the blame.
It confounds me when salespeople tell me that they cannot make more face-to-face calls. Why not? Do buyers perceive little value in the meeting? Do managers require salespeople to yield to administrative distractions? Is traffic that bad?
I grew up in a sales culture where we were required to make eight face-to-face sales calls per day. If we were in the office between 8 AM and 5 PM, our bosses assumed we were goofing off, and we probably were. Sales managers scrutinized our phone credit card statements to make sure we did not spend the day doing phone work versus face-to-face selling. We did paperwork at night or on Saturday morning. If it sounds a bit Draconian, it was not. We were salespeople after all, not office people. I learned a work ethic that helped me start and run a successful business, and I am eternally grateful for the lesson. Maybe it is time for some old-school selling rules again.
How to Guarantee Your Success in Sales
What you do today has an affect on your future income. Whether you’re a sales manager developing a plan for your salespeople or a salesperson developing your own sales plan, you need to develop a daily and weekly plan that is based on pre-determined activities levels reverse engineered from your goal in order to be successful. It is the only way to stay focused on growth and stay self-motivated to actively pursue success, rather than waiting for it to come your way.
How do you develop the plan?
1. Set your annual sales goal that is needed for you to make your targeted income level.
How much do you want to make this year? How much revenue do you need to close in order to justify your salary and company overhead expenses associated with your position? If you don’t know your goal, how do you know what success looks like?
2. Define your ideal client and what their average value is to you.
Do not take every piece of business you find. What type of clients do you want? What is their average worth to the organization? If you do not have business intelligence to use, your need to determine an average worth of your client base to set a baseline for the next steps.
3. Divide the sales goal by the average client value to determine how many clients you need.
If your goal is to make $100,000 this year and the average client is worth $5000 to your organization and you make 10% commission, you need to find 200 clients…..Pretty simple! Know how much business you need to close in order to meet the goal.
4. Know your closing ratio.
If your closing ration is 50% and you know you need 200 clients, then you need to propose to 400 targets to meet your goal. Again, pretty simple!
5. Know how many targets you need make proposals for.
You can’t do business with everyone. If you do, I guarantee that you will lose money. 20% of the typical customer base in any company costs more money to the company than they bring in revenue. If you make sure you are talking to “qualified” targets based on your ideal client profile, you will know how many qualified targets you need to propose to.
6. Know how many prospects you need to qualify as targets.
How many prospects do you talk to or meet with that do NOT meet your ideal client profile? At first, the prospects may seem like they can do business with you but when you are done talking or meeting with them, it is not a good fit for the organization. It’s not your fault! They looked like a target and do NOT feel remorse by disqualifying them to stay focused on better targets.
7. Know how many leads you need in the top of the funnel to qualify as prospects.
The phone book is not a lead list! Although you may think everything with an address is a prospect, you need to be smart about where you spend your time and energy to develop business. Much like the conversion of prospects to targets, the smarter you are about the leads that you generate, the more successful you will be at moving leads to clients.
8. Develop your “lead-o-sphere” to fill your funnel.
Much like the universe started in chaos and eventually developed into form, you need to form leads from the chaos in the market place. What are your lead sources? Who have you partnered with to be a complimentary provider? What networking groups have you joined to increase your contact base? What service organizations do you belong to? What boards are you on? What social events do you attend? Where do you go hang out? Who is in your LinkedIn network? Who are your centers of influence? Who do you need to meet to put you in a position to talk to your next lead?
You can download the “Get There” Calculator on the Technik Resources page to help you determine what your funnel volume and funnel velocity needs to be to guarantee your success.
Why You Need Sustained Activity Goals and Metrics
One of the most dangerous mistakes a salesperson can make is to go without activity because it will cause major problems in producing results later. As much as a salesperson may want to resist activity goals and metrics, they are necessary, and as much as the sales manager may not want to measure or enforce activity goals, it is necessary that you do so even when the numbers are being made.
Maintaining Momentum
The great game of sales is not very different than an athlete maintaining peak performance with the right activity (training). Without the right sales activity (prospecting) for even relatively short periods of time in sales, your pipeline starts to look a little light. Without face-to-face meetings, your deals start to stall and your pipeline looks even weaker. Eventually, your numbers will not be sufficient for the company to consider you a value to the organization, your commissions will sufferr, and a change will have to be made.
Maintaining momentum requires that you keep some standard of activity level, just like an athlete. Your activity goals and metrics are an indication of your future sales results. Your activity metrics are a snapshot of your fitness level as a salesperson and without them it easy to underperform and miss your numbers.
Build a “Model” Week for Momentum
The best way to maintain momentum is to create a “model” week with specific activity goals with prospecting calls and prospect meetings. Every week is not going to look exactly like the “model” week, and some are going to look very different based on the demands of the business you are in. One week of poor activity isn’t likely to make or break your quarterly or annual sales results, so it’s better to look at the averages since some weeks are naturally going to be more productive than others. Activities like prospecting calls and first sales meetings are good metrics and it is important to review your results and make changes to your activity levels as necessary.
Selling is one of those endeavors where it is very difficult to make up for lost time. You can train in the off season and perform during the season. You can also train like crazy in the season but you are guaranteed to produce nothing but a sense of frustration and panic. Activity goals and metrics are what keep you deliberately training for the season and in sales, the season never ends.
Sales Accountability VS Organizational Responsibility
Customers are disappearing, buying habits have changed, profit margins are shrinking, marketing budgets have been stripped, and the competition is entrenched. To compound the problem, your sales team is only selling 20% of the time, call reports are fictional, sales are unpredictable, and the training seminar that was purchased has had no impact on results whatsoever. In this day and age, more production is needed from the sales team and they need to be held accountable for results.
To truly hold sales people accountable, organizations have a responsibility to have certain things in place. These responsibilities include:
- Having a lofty goal in place
- Aligning the company on the lofty goal
- Knowing their “ideal” client
- Having current marketing materials
- Knowing opportunities exist in the market
- Being market-oriented and customer-centric
- Being able to measure success
Once these responsibilities are taken care of, the next step is to design a sales system and create a roadmap that is reverse engineered on the lofty goal. This road map should include clearly defined expectations such as:
- Specific activity metrics
- Weekly sales plans
- Public activity calendars
- Expected funnel size and velocities
- Structured reporting mechanisms
- Time bound results
Once an organization has taken care of their responsibilities, developed a sales system to follow and fully communicated what is expected, only then can the sales people be held accountable
Increase Your Sales Throughput with Process Alignments
| No matter what you offer for a product or service, customer buying habits have changed and organizations are becoming increasingly frustrated by a lack of market understanding, conflicting strategies between marketing and sales departments, and a lack of understanding about buying decisions. These frustrations are leading to unfocused selling efforts and wasting precious marketing dollars.To combat this, organizations must align their sales & marketing process to answer key questions in each stage of the prospect’s buying process in order to convert market opportunities into sales. Here are some pointers about what you need to accomplish when the prospects are asking the following quest Why do I need to solve this problem?
The customer is looking to learn so you should teach them in the way that they want to learn. Connect your teaching to something they’re passionate about but remember to be polite and keep it relevan Why do I need you to solve this problem? The customer needs to make a decision so you need to become a trusted advisor by creating relevance, building credibility, demonstrating value, and being honest about limitations Why should I buy from you now? The customer is looking to commit so you need to motivate them by providing a reason and making their decision easy by eliminating risk. How do I get the most out of my purchase? The customer is looking for confirmation so you need to continually add value, fix all problems as they arise, and inspire them to demonstrate why they made a good decision. By aligning your sales process to your prospects buying process, you will shorten the sales cycle and utilize your marketing dollars more effectively because your efforts will be focused. |
How to Stop Guessing about Increasing Your Sales
Whenever it comes time to focus on increasing sales, most companies focus in the wrong place. How do we know that? Simple, there are more wrong places than right, and without an understanding of how to focus, the odds are you’re going to get it wrong. So how do you get it right? The answer is to understand the theory of constraints and the lessons it holds for increasing “throughput” in sales
What is throughput? In sales, throughput is simply selling and delivering more products and services to your customers…..a simple idea, not always remembered by those who attempt to manage sales efforts. How often have you seen a sales manager attempt to manage the sales process by measuring a single intermediate point when they should be measuring enough intermediate points to determine the “constraint” to increasing sales.
A constraint is defined as anything that limits a system from achieving higher performance. To increase throughput (sales) you need to follow a five-step process:
1. Identify all of the constraints in the sales system. Every business unit has at least one constraint and most have several and sales is no exception. What are your constraints? Too few leads, too few qualified leads, too few qualified sales people to follow-up on the leads, too few people to create useful proposals, too few qualified buyers……
2. Exploit the system’s constraints. Make sure you don’t bother to increase output of things that are not constrained. If a constraint is too few people to qualify leads, then increasing raw leads beyond the level you can qualify is a waste of system resources. Maximize the input to the constraints just to the limit of the constraint’s ability to handle the input. Any more is a waste of resources.
3. Subordinate everything else to the decisions made in step 2. This will maximize system efficiency. That is, the cost of selling will be minimized for the level of sales being achieved, but it doesn’t yet increase sales. The reason is that we have not yet relieved any constraints, we have simply acknowledged that they exist and that trying to “force feed” more through the constrained system is a waste.
4. So now we must elevate the constraints. What is the one step in the process that if you expanded its capacity would increase sales? Make sure you understand what the constraint is and then expand its capacity until it is no longer the constraint.
5. Sales will increase and… there is now another constraint so go back to step 1 and repeat the process.
This process sounds simple. It seems obvious, and it’s tough to force yourself to do it. We are too quick to want to jump on a “solution” without understanding if we are increasing throughput or activity. The purpose of your organization is not to increase activity but rather to increase throughput and it will not happen by guessing.
What got you here won’t get you there……
As companies have built new production capacity through the implementation of LEAN principles over the past few years, their weakest link is now the sales process that is still being managed by principles from the 1950’s. “Outside” sales people are only selling 20% of the time because of the way the organization is designed. If a company is serious about growth, they need to evolve their company to a customer orientated model that allows more sales to happen. Placing the right people in the right positions with the right procedures will allow a company to increase their customer retention and maximize their selling opportunities.
I hope these thoughts and philosophies help you increase your opportunities.
Peter C. Rathmann 