Integrated sales pipeline management

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.


The primary concerns of CEOwould be among others how to increase SALES amount.



Marketing & Sales

Service

Product SalesMarketing Profit

Customer(Existing, New)

Offer




Generic Sales Pipeline

Relationship Acquisition

• Lead

Relationship Management

• Prospect, Account

Opportunity Management

• Opportunity

4



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



Increasing Conversion Rate


flow

Increase conversion

rate

Increase sales




Increasing Opportunity Flow


flow

Increase conversion

rate

Increase sales




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.



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



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.



Justin’s approach

Control salespeople's activities

Give salespeople autonomy

Maximize conversion

rate

Maximize opportunity

flow

Maximize sales




Division of LaborStandardizationCentralized scheduling

Justin Roff-Marsh, How to build a high-throughput Sales Process, White paper, 2007.



My approach(Injections)• Centralized scheduling

– Division of Labor– Standardization

• Closing initiative• Correct responsiveness to customers

– Care to increase Conversion Rate



My approach(Injections)



Maximize conversion

rate


flow

Maximize sales




Centralized schedulingClosing initiative

Correct responsiveness to customers



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



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



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



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



2. Leads Updating

18

1-1 Collecting LeadsBy yourself Recommendation

1-2 Updating the Lead listClassification Numbering

Objective: Update the Leads list



3. Prospect Communicating

19

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



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



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



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



Centralized scheduling• Sales Pipeline Card• Visual Board• An application of TOC-DBR and/or CCPM



3. Prospect Communicating

4. Prospect Meeting

5. Opportunity Pulling



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



Example: Visual Board

26



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



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



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.

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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.

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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



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

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Co-operation between functions

Service

Product

core requirement

SalesMarketing Profit


Solution

Good Offercore requirement = Solution


Operation R&D Marketing & Sales

33



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 ✔ ✔ ✔

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Correctly responsive to customers



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?

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Exercise: Using CLOUD

1. I’m using third-party machines. Is there a way to buy your machine?

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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



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



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.



Exercise: TARGET TREE



We adhere to the normal value in this deal.

3. We provide an oppor-tunity to test our equip-ment to produce.



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.

.



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



Concluding Reality



Maximize conversion

rate


flow

Maximize sales Good Offer (TOC-TP)

Centralized scheduling (TOC-DBR/CCPM)Closing initiative (TOC-TP)



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: [email protected]•Mobile: +82-10-3601-1785

mailto:[email protected]

Integrated sales pipeline management

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