Applying Process Improvement to the “Art” of Sales.

Applying Process Improvement to the “Art” of

Sales

Air Products University

Reduce L&D costs in support of organization objective to achieve 13% (RONA) Return on Net Assets

Organized L&D by colleges that align to organization core processes

Created Shared Services organization

Sales Training

Complex selling process at Air Products From selling tanks of oxygen to entire gas

production plants that are built on client’s site Sometimes long sales cycles managed by deal

teams Doug Timmel - College Leader for Sales

Analyzed the sales process and began to align L&D needs to sales process steps

Discovering how to apply L&D as a continuous improvement mechanism to improve the sales process

Applying Process Improvement to the

“Art” of Sales

Case Study: Air Products and Chemicals Douglas Timmel February 16, 2006

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Fast Facts

Global gases, chemicals, equipment and services

provider Serving customers in

technology, energy,healthcare and industrialmarkets

Fortune 150 company -- $8B sales Chemical industry safety leader Geographically diversified, with half of our sales

outside of the U.S. Operations in more than 30 countries 20,000 employees worldwide Known for operational and business process

excellence. 15 Different Sales Organizations, 17 SBUs

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What Is A Sales Process?

The Gartner Group defines a sales process as the “Critical steps in selling linked together …[to] … provide the common framework, vocabulary and metrics for how sales organizations review and analyze territories, accounts, opportunities, individuals and sales cycles…”

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Why Focus on Sales Process?

A well-managed sales process helps to improve visibility, predictability, consistency, scalability and sustainability, which often translates into a competitive advantage.

The reality is that selling in today’s complex environment requires a coordinated effort and team approach, making a standardized sales process all that more important.

Training must support competency development, which must support process improvement, which lead to better sales performance.

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The Problem….

The challenge for all sales organizations is to grow revenue in a predictable, consistent manner and sustain performance over an extended period of time.

The Sales Manager’s challenge is to improve the effectiveness and productivity of the Sales organization so revenue and margin DO increase.

How to do this in an increasingly difficult Sales environment?

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The New Selling Environment Increased competition with lower cost basis Consolidation of Purchasing companies Buying Decisions by committee and moving

up to the “C” level to make final decisions Transparency of information Same number of Suppliers and competition

intensifies Opening up new markets and establishing a

sale presence where a history of sales processes is not established.

Pressure on Cost of Sales Increased emphasis on Supply Chain

Efficiency

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The Selling Environment has Changed...Does Sales have Skills To Sell at the “C” level? Understand and be able to “Sell into” a customers

Value stream? Have a discussion with the customer on how the

offering may affect the customers financial performance?

To be able to sell to a purchasing committee with many buying influences?

To sell into complex, global accounts with multicultural buyers with different expectations?

Be able to sell (and keep) price increases in a very dynamic cost environment?

To understand the cost impact of supply chain and service levels, and the vale of forecasting ?

To understand the Value of a robust sales pipeline?

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By Implementing a Single Sales Process and Training Approach

Improved and standardized sales pipeline, with clear visibility and forecast accuracy.

The ability to replicate and scale best practices and learning across the organization.

Improved communication, cooperation, coordination and, resource allocation.

Improved win rates and sales velocity

Lower cost of sales and sales training

Common assessment of competencies

New hire training ramp up time and an accelerate ROI payback period.

Increase in sales productivity and effectiveness.

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Case Study

How Air Products Implemented Sales Process

and Results

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Key Business Issues for AP

All the same challenges facing other selling organizations,

No Alignment of Sales Processes– Many sales processes, little documentation

No holistic or consistent Sales Training approach, all training “ad hoc” at SBU level

SAP “Steamroller” created a burning deck– Connections from SFA/CRM tools “broken”

by move to SAP– Lost visibility of customer data– Previous systems were a myriad of CRM

applications

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Our Path……..

Implementing SAP provided the opening to define a single sales process for the company

Sales Process was established and agreed Established an Enterprise Approach and

converged on crucial decisions such as opportunity stages and corporate metrics.

Tool was chosen to help measure KPIs and become shared vault of “customer knowledge”

Agreed to begin a single, global, Sales University where all Sales Managers could send their salespeople, agents, distributors.

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The Selling Process at AP Two Distinct Sub-Processes

Find and Win Customers – Leading Indicators– Provide an Indication of future success

Retain Customers – Lagging Indicators– Provide Revenue and Profits to the Company– Provide the Forecast to the Supply Chain– Supply the correct inputs for Perfect Order

Fulfillment

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Level 3 Process “Find and Win Customers”

Identify Opportunities

1

leads / sales target list

Develop Relationship

2

prioritized list of qualified leads

Review Requirements and Engage Organization

3

decision to offer or not

Develop and Submit

Proposal

4

proposal in hands of customer

Obtain Commitment

5

agreement to do business

Establish or Modify

Customer Account

6

approved customer account

Process Contract

Information

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contract data input to SAP

Process Steps

Outputs to Next Process Step

Output to FULFILLValid and viable customers

Output to FULFILLValid and viable customers

relationshipconfirmed customer requirements

configured offering

Inputs to SELLMarket modelOfferings (from INNOVATE)Business objectives

Inputs to SELLMarket modelOfferings (from INNOVATE)Business objectives

Leads QualifyNeedsAssess PProposal Neg. Close

Move Data to SAP

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Enterprise Process = Enterprise Tool

Business Rules Can Drive the Process

Sales force automation tool Overlays the Process & Allows for Business Rule Inclusion

All Businesses use the SAME Stage field!

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AP Leading Indicators Align to “Find and Win Customers”

% Leads Becoming Prospects

Revenue Potential from Prospects

Revenue potential in pipeline

– A) By Salesperson– B) By Segment

Number of Customer Touches

– A) By Segment B) by Time Period

Sales Cycle Time on New Opportunities

Won/loss % on new opportunities

% Contract renewals

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Examples of Leading Indicators

Customer Touches

– Increase of 72% from May through August!

Opportunity Pipeline Stage Analysis

– First time we have analysis across company

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KPI – Won vs. Loss %

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Sales Cycle Time – by SBU

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CEO Dashboard

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Examples of Level 4 Processes for “Find and Win Customers”

Find and Win Opportunities...

Find and Win Opportunities...

Identify Opportunities

Identify Opportunities

Develop Relationship

Develop Relationship

Review Requirements and Engage Organization

Review Requirements and Engage Organization

Develop and Submit Proposal

Develop and Submit Proposal

Obtain Commitment

Obtain Commitment

Establish or Modify

Customer Account

Establish or Modify

Customer Account

Process Contract

Information

Process Contract

Information

Create leads● Build awareness

in the marketplace

● Collect leads● Validate leads● Distribute leads● Act on leads● Collect data on

lead quality and quantity

Solicit feedback on proposal

Negotiate Analyze and

revise offering Develop contract Close Collect feedback

on won / lost orders

Develop lessons learned

Approve project

Pre-Selling Build personal

marketplace recognition

Establish / expand marketplace contacts

Discover needs Understand

needs Understand

buying habits Identify decision

makers Build

relationships MAKE SALES

CALL

Screen opportunities

Evaluate competition

Match offerings / capabilities to customer need

Create interest in offering

Support customer’s RFQ creation

Respond to RFQ Prepare / engage

organization for offering development

Develop cost estimates (link to CIA processes)

Approve pricing and proposal

Prepare proposal documentation

Submit and present proposal

Complete documentation

Complete, review, and approve customer information in workbook

Recognize / reward success

Document contract information in workbook

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Find and Win Level 4 Processes Drive Behavior and Outcomes

Make Sales Call

Skills needed: Pre-call planning

Setting appointment Opening statement

Probing

Training required: Sales call Methods Questioning skills Listening

skills

Key Outcome: Process Definition and need to Drive Continuous

Improvement has Allowed AP to Justify a Sales University

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Level 3 Process “Retain Customers”

Segment Customers

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customers in segments

Monitor Segment / Customer

Performance and Feedback

9

financial performance

Analyze Gaps and Engage

Organization

10

improvementopportunities

Authorize and Plan

Improvements

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actions, changes, and expenditures

Implement and Control

Improvements

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Modify Customer Account

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customer data / segment changes

Forecast Demand

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demand forecast for Supply Chain

Process Steps

Outputs to Next Process Step

Output to FulfillValid and viable customersOutput to Supply ChainDemand forecast

Output to FulfillValid and viable customersOutput to Supply ChainDemand forecast

service performance

Inputs from SELLOf a WON CUSTOMER

Inputs from SELLOf a WON CUSTOMER

improvedfinancial performance

improvedservice performance

contract data changed in SAP

ResultsImproved customer loyaltyImproved segment performance

ResultsImproved customer loyaltyImproved segment performance

Obtain Revenue and Margin

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Examples of Level 4 Processes “Retain Customers”

Manage Customer

Experience

Manage Customer

Experience

Segment Customers

Segment Customers

Monitor Segment / Customer

Performance and Feedback

Monitor Segment / Customer

Performance and Feedback

Analyze Gaps and Engage Organization

Analyze Gaps and Engage Organization

Authorize and Plan

Improvements

Authorize and Plan

Improvements

Implement and Control

Improvements

Implement and Control

Improvements

Modify Customer Account

Modify Customer Account

Forecast Demand

Forecast Demand

Account planning Modify commercial

terms, mid-contract, such as…

price changes hardship

issues force majeure improvements cost

reductions term

extensionsetc.

Input from… Customer Loyalty

measures Customer

Complaint process

Periodic performance assessments

Feedback from on-going customer relationships

Complete documentation

Complete, review, and approve customer information in workbook

Recognize / reward success

Negotiate Close Develop lessons

learned

Mass price changes

Determine need

Develop plan Execute

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Lagging Indicators Align to “Retain Customers” Revenue Attainment /

Growth– A) year to year

change – B) actual total

revenue

Actual New Business Profitability

– A) by sales territory B) by customer

C) OR by account

Wallet share– A) by customer

B) by territory

Price Increase Effectiveness ( within a customer or a territory)

Customers Segmented based on Value/Return

Inputs to Perfect Order Fulfillment

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The Results at Air Products

Enterprise Sales Process, Enterprise Design– Business Rules drives the process

Insight into Leading indicators of Success & Performance for the Entire company

Leading Indicators can be tied to Lagging Indicators

Visibility of customers across the Enterprise

One Tool for the entire company

Have a base to now measure continuous improvement and a justification for establishing a budgeted Sales University for Training

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Process Improvement is Dependent on Training Process Steps identify the critical measures. Ability to measure the Process Steps

indicates speed to execute, efficiency of execution, identification of best practices

Knowing the Process Steps and metrics allows identification of critical activities and competencies to be continuosly improve.

Competencies can be established and training defined to allow Sales to execute the process steps faster and more effectively.

The Process improvements can then be measured and tracked in Dashboards.

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Having and Executing a Sales Process Effectiveness X Efficiency = Productivity

Better Capital ControlCost Effect. Supply ChainRight Process/System

Better Products/ServiceQuality Prod. DeliveryRight Competence/Skill

Customer LoyaltyFaster Response TimeRight Product/Feature

Market Share & BrandFaster Prod/Offer Dev.Right Message

Faster GrowthHigher Sales ClosesRight Customers

Higher Profits/ Sales RepShorter Sales Cycle Right Markets

ProductivityEfficiencyEffectiveness

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Benefits for Air Products

– Unexpected cross selling opportunities– One unified Sales Training approach tied to Process

and measurable with defined metrics. – Global visibility on accounts– Better forecasting for all of Air Products– Better overall competitor assessment– Reduced cost of sales and sales training– Greater Sales Productivity– Eliminated many administrative tasks/costs– Better direction to spend on Marketing funds as can

assess return on leads.– Expect shortened sales cycles– Better Alignment of Rewards with Performance– Better allocation of spend to customer segment and

specific customer opportunities

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Conclusion

Organizations that effectively align and leverage their people, process, training and technology assets are likely to sustain competitiveness over organizations that lack standardized sales processes and a consistent sales training approach.

If you have defined your winning sales processes but have yet to embody these best practices into your company, consider a solution that aligns process to measurements and forms the basis for assessment and training.