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transcript
2016 TOCICO International Conference
© 2016 TOCICO. All Rights Reserved.
An integrated design of Sales Pipeline management for sales growth
sustainability
Namkee ChungChonnam National University, South Korea
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
The primary concerns of CEOwould be among others how to increase SALES amount.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Marketing & Sales
Service
Product SalesMarketing Profit
Customer(Existing, New)
Offer
Customer(Existing, New)
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Generic Sales Pipeline
Relationship Acquisition
• Lead
Relationship Management
• Prospect, Account
Opportunity Management
• Opportunity
4
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
The Goal of Marketing & Sales
Increase opportunity
flow
Increase conversion
rate
• Excluded• Delayed• Failed
Prospects Opportunities ContractsLeads
Increase sales
• Excluded• Delayed• Failed • Excluded
• Delayed• Failed
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Increasing Conversion Rate
Increase opportunity
flow
Increase conversion
rate
Increase sales
Prospects Opportunities ContractsLeads
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Increasing Opportunity Flow
Increase opportunity
flow
Increase conversion
rate
Increase sales
Prospects Opportunities ContractsLeads
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Issues bothering CEOs• Salespeople spend only a small percentage of
their time selling • Sales is lumpy and unpredictable• There always seems to be conflict between
sales and other functions• Salespeople are all but impossible to manage
Ref) Justin Roff-Marsh, How to build a high-throughput Sales Process, White paper, 2007.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Dilemma of CEO
D’Control
salespeople's activities
DGive
salespeople autonomy
BMaximize
conversion rate
CMaximize
opportunity flow
AMaximize
sales
Salespeople tend to over-represent the interests of customers.Salespeople can not effectively use the working hours.Restrictions on the sales activities is the time.
Selling requires local knowledge and flexibility.Dealing with customers is like an art rather than a science.
No common patterns for activities
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Justin’s assumption• There is an inverse relationship between conversion
rate and the amount of time salespeople devote to business-development tasks(opportunity flow).
• When conversion goes up, sales volume goes down. – It is non-linear one: incremental increase in conversion
invariably come at the expense of exponential decrease in business-development capacity.
– Sales people achieve increases in conversion by assuming responsibility for more and more tasks. Because most salespeople receive equal credit for repeat purchases and for new-client acquisition salespeople spend increasing amount of time for servicing existing clients.
Justin Roff-Marsh, How to build a high-throughput Sales Process, White paper, 2007.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Justin’s approach
Control salespeople's activities
Give salespeople autonomy
Maximize conversion
rate
Maximize opportunity
flow
Maximize sales
Salespeople tend to over-represent the interests of customers.Salespeople can not effectively use the working hours.Restrictions on the sales activities is the time.
Selling requires local knowledge and flexibility.Dealing with customers is like an art rather than a science.
No common patterns for activities
Division of LaborStandardizationCentralized scheduling
Justin Roff-Marsh, How to build a high-throughput Sales Process, White paper, 2007.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
My approach(Injections)• Centralized scheduling
– Division of Labor– Standardization
• Closing initiative• Correct responsiveness to customers
– Care to increase Conversion Rate
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
My approach(Injections)
Control salespeople's activities
Give salespeople autonomy
Maximize conversion
rate
Maximize opportunity
flow
Maximize sales
Salespeople tend to over-represent the interests of customers.Salespeople can not effectively use the working hours.Restrictions on the sales activities is the time.
Selling requires local knowledge and flexibility.Dealing with customers is like an art rather than a science.
No common patterns for activities
Centralized schedulingClosing initiative
Correct responsiveness to customers
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
How to achieve?• Centralized scheduling
– Sales Pipeline Management– Applying TOC-DBR and/or CCPM
• Closing initiative– Sales Pipeline Management– Using TOC-TP
• Correct responsiveness to customers– Using TOC-TP
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Presentation Agenda1. Methods for Sales Pipeline Management
Centralized scheduling2. How to apply TOC-TP for Sales?
Secure Closing Initiative Correctly responsive to customer needs
3. Conclusion
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Example: Manufacturer’s SP
Customer Avtivity Objective
Lead1.Seeking Lead collection plan2.Updating Update the list
Prospect3.Communicating Meeting appointment4.Face-to-Face Meeting
Establishing partnership
Opportunity5.Pulling Requesting for proposal6.Negotiating Getting a contract
16
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2016 TOCICO International Conference
1. Leads Seeking
1-1 Defining criteria for eligible Leadbusiness sectors
businesssize business area
1-2 Information sourceGovernment CommunityWeb, Facebook, Blog, LinkedInSeminars Exhibitions NewspapersReports
1-3 Getting recommendations from existing customersfrom friends
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Objective: Construct a plan for Leads collection
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2016 TOCICO International Conference
2. Leads Updating
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1-1 Collecting LeadsBy yourself Recommendation
1-2 Updating the Lead listClassification Numbering
Objective: Update the Leads list
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2016 TOCICO International Conference
3. Prospect Communicating
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3-1 Preparing materials for communicationCompany
Product/Service Sales amount Finance Policy
External environment
Market trend Competitors
Salespeople’s Script
3-2 SchedulingPriority Timing Execution record
3-3 ExecutionPhone call Mailing
Courage Becoming accustomed to rejectionConversation skill
Objective: Secure a face-to-face meeting
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
4. Prospect Meeting
20
4-1 Preparing materials for face-to-face meetingInformation of the prospectWho is the contact/decision maker?
4-2 How to introduce yourself?Go into fast to the point!Design what to talk
4-3 How to respond to customer questions?Gaining confidence each otherNot to suggest a solution
4-4 Questions for investigating customerSearch for common interestGoal/Objective Issues Desired effectsCurrent needs Potential needsOpen-ended Question
Objective: Construct reliable partnership
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
5. Opportunity Pulling
21
5-1 Investigate the reason why the customer want to buyPurchasing reasonPersonal reason
5-2 Presentation to deliver the valueSolutions of problems (organizational / personal benefit)Not boast the productHighlight the Services
5-3 Getting the request for proposalArrange some events for decision making
Test Prototyping Exhibition5-4 Lead the initiative toward closing
Prepare in advance the closing criteria
Objective: Getting the request for proposal
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
6. Opportunity Negotiating
22
6-1 Construct a proposalCustomer Profitability
ROI
Win-Win Solution(Mafia Offer)
Price Delivery Service
Any other issues to be dealt with?
6-2 Revise the proposalWhy does customer reject it ?
6-3 Suggest an appropriate closingPrepare in advance the closing criteria
Objective: Winning a contract
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Centralized scheduling• Sales Pipeline Card• Visual Board• An application of TOC-DBR and/or CCPM
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
3. Prospect Communicating
4. Prospect Meeting
5. Opportunity Pulling
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
TOC way to the Goal: Sales Flow1.
Seeking
2.Updatin
g
3.Communicati
ng
4.Face-to-face
meeting
5.Pulling
6.Negotiati
ng
2.
2.
3.
4. 6.5.3.
4.4.
3. 5.
2.2.
2. 2.
2.
2. 2.
2.
Lead Prospect Opportunity
Sales LT
Little’s Law: Throughput = WIP / LT
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Example: Visual Board
26
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Date Leads Prospects Opportunities Delivery Sequence
2.26S1,S2,S3,S4 P1:Friendly
P2:PendingP3:Unfriendly
N1:ProposalN2:TestN3:Review
D1:ShippingD2:InstallD3:Paid
N1, D2, P2
2.29S1,S2,S3,S4,S5,S6
P1:FriendlyP2:PendingP3:UnfriendlyS3:Friendly
N1:ProposalN2:TestN3:ReviewP1:Proposal
D1:ShippingD2:InstallD3:PaidN3:Assembling
P1,P3,D1
3.2S1,S2,S3,S4,S5,S6,S7
P1:FriendlyP2:UnfriendlyP3:UnfriendlyS3:Friendly
N1:PendingN2:TestN3:ReviewP1:Proposal
D1:ShippingD2:PaidD3:PaidN3:Assembling
P2,P3,S7
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A tool for Centralized Scheduling
Sequencing Rule:• Customer Request Time• Closing Necessity• Available Time
Example: Visual Board
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Presentation Agenda1. Methods for Sales Pipeline Management
Centralized scheduling2. How to apply TOC-TP for Sales?
Closing initiative Correct responsiveness to customers
3. Wrap up
28
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Closing initiative(1/2)• The longer salesperson stay at each step, which
makes the the sales LT longer, the more is wasted the Activity Time Resources of salespersons.
• Especially, obsession to the conversion rate makes each phase prolonged.
• So it would be better to do in a way that shorten the length of stay at each phase, without deteriorating the conversion rate.
• So the salesperson need to be encouraged to finish each step in reasonable time.
29
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Closing initiative(2/2)• If salesperson finishes each phase in reasonable
time,The number of completed phases increases.Sales can be improved without sticking to the conversion
rate.This requires salespeople to upgrade their ability of
effectively responding to customer needs.
30
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Expected Effects of using TOC-TP
Conversion rate goes up
TOC-TP is utilized
Assumptions of both parties are exposed
Being correctly responsive to customer needs
Good Offer is madeSales LT is shortened
Opportunity Flow increases
Closing Initiative is reinforced
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Developing Good Offer• Recognition of customer’s core requirement
– Existing customer– New customer
• Solution development– Satisfying customer’s core requirement– Securing company profit
• Terms & Conditions– Fitting solution to requirement– Win-Win Offer
32
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Co-operation between functions
Service
Product
core requirement
SalesMarketing Profit
Customer(Existing, New)
Solution
Good Offercore requirement = Solution
Customer(Existing, New)
Operation R&D Marketing & Sales
33
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
TOC-TP to develop Good Offer
Contents to be developed Target Tree Branch Cloud
4-1 Preparing materials for face-to-face meeting
✔ ✔ ✔
4-3 How to respond to customer questions? ✔ ✔
4-4 Questions for investigating customer ✔ ✔
5-1 Investigate the reason why the customer want to buy
✔ ✔
5-2 Presentation to deliver the value ✔ ✔ ✔
6-1 Construct a proposal ✔ ✔ ✔
6-2 Suggest an appropriate closing ✔ ✔ ✔
34
Correctly responsive to customers
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Example: Customer’s Requirements1. I’m using third-party machines. Is there a way to buy your
machine?2. Currently my products are outsourced. Why do I have to buy
equipment?3. Now being reviewed second hand, is there any reason to buy
new?4. For the price expensive compared to competitor’s, can you
cut it down?
35
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Exercise: Using CLOUD
1. I’m using third-party machines. Is there a way to buy your machine?
36
Change Brand
Not change Brand
Reducing Risks
Securing Opportuni
ty
Clever Purchasin
g
There may be a better conditionImproving profit is high priority
No disqualification in current brandDecision making for change is not easy
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Preparing to deliver the value• Customer’s perceptions(Assumptions) are
– No disqualification in current brand– Decision making for change is not easy– There may be a better condition– Improving profit is high priority
• My preparations(Injections) are– Analysis on customer’s ROI with my machine– Supporting plan to make the machining operation
easy– Not to mention the functionality of the machine
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Exercise: Using TARGET TREETarget: We adhere to the normal value in this deal.
Obstacle Intermediate Objective
1. There is no way of securing the customer a fair return on investment.
1. We look for ways of ensuring a fair return on investment.
2. We cannot meet the decision maker.
2. We request the decision-making arrangements with a person of au-thority.
3. Customers have no experience using our equipment.
3. We provide an opportunity to test our equipment to produce.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Exercise: TARGET TREE
2. We look for ways of ensuring a fair return on investment.
1. We look for ways of ensuring a fair return on investment.
We adhere to the normal value in this deal.
3. We provide an oppor-tunity to test our equip-ment to produce.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Exercise: Using BRANCHWhat-if Simulation: What would it be if we suggest the
normal price?The customer rejects
the purchase.
We suggest the normal price.
.
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Exercise: BRANCHWhat-if Simulation: What would it be if we suggest the
normal price?
The customer rejects the purchase.
We suggest the normal price.
.
Technical support
The customer reviews the purchase positively
Personnel support
Materials
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Concluding Reality
Control salespeople's activities
Give salespeople autonomy
Maximize conversion
rate
Maximize opportunity
flow
Maximize sales Good Offer (TOC-TP)
Centralized scheduling (TOC-DBR/CCPM)Closing initiative (TOC-TP)
©2016 TOCICO. All Rights Reserved.
2016 TOCICO International Conference
Namkee Chung•Professor at Dept. of Industrial Engineering, Chonnam National Univ., South Korea•President of TOC Korea Association•Author of books(Korean); TOC Constraint Management(1999), TOC Golden Rule(2002), Performance 200% Up TOC(2005), TOC Inventory Management(2013)•Co-translator of “Necessary But Not Sufficient(Goldratt)”, “Smart Thinking(Khwa Choon Ean)”•Consultancy to companies in supply chain, project management, strategy & Tactics •Email: tockorea@naver.com•Mobile: +82-10-3601-1785