From day one and until recently our sales process was awesomely non-existent and very much adhoc. As we sell creative and web software development services, and lack of good process bit us in the ass few times but generally got us through. These days however it seems to get more and more out of hand as company grows. Hence I am seeking an advice from experienced sales professionals - how to design and implement solid sales process? Where to even start with it?
By sales process I mean an end-to-end communication flow that happens between the time we got the lead and the time we got a deal inked.
Update : As Joel pointed out the question is rather open-ended so I'll try to clarify it a bit. I am a hardware/software engineer turned entrepreneur :) so most of the sales/business/MBA concepts are somewhat foreign to me, but I try to learn as much as I can. These days I run a company that provides creative and technology services(software, websites, consulting etc.) for the past 5 or so years it grew mostly by the word of mouth, which is great but somewhat unsustainable, unpredictable and not really scalable. Since this is the biggest problem for us at the moment I am trying to build a better sales process in this organization. I see it(and please correct me if I am wrong) as something like this:
This is pretty abstract workflow and what I am looking for is some advice as to how to approach each step of the sales process, formalize it and scale it. Basically I am looking to understand where to get leads, how to qualify them, what questions to ask to create a proposal for them, etc. Each of these are certainly very much dependent on what we specifically do, but as it's quite a big undertaking I am seeking for some kind of guidance from more experienced entrepreneurs who understand sales process.
Another Update :
Guys, your answers and insights are just great! What I got from all these comments is not only some valuable information but some great inspiration as well. I would select every answer to this question as 'the answer' but unfortunately I can do that with only of them. But I am truly thankful for your advice!
Congrats - admitting you have a problem is the first step.
Don't "kill the goose that lays the golden eggs." Regardless of your informal process, someone has managed to make sales. Now you want to tell them to spend more time entering data, so you can feel more comfortable with the process. They will see is as micro-management. Good sales people have an aversion to everything that is not sales or doesn't lead to sales.
So what do you do? Start making their sales process easier. Work with them to find tools that help them manage their time and efficiently gather the data necessary to close sales. Remember, it's about helping them close sales and not making sure you get some monthly report. Eliminate duplicate efforts. Make sure your prospecting, pipeline, contact, quotes and proposal data flows into billing, customer service, etc. Maybe you have a technical person who supports the sales process? Knowing what is in the pipeline and coordinating the process can make it easier to manage this person's time/workload. Delays during any point in the process will delay sales.
Maybe you could save money by hiring support staff? Your sales staff needs to know that if they can't provide you with concrete evidence to justify hiring people, it's not going to happen. Push sales people to handle more prospects. They may feel they can't do it, so that's when you offer to take some of the tasks off their plate. They usually don't like giving up control or having someone else lose their sales, but they can't do two things at one time. Again, the focus is on their closing more sales. If someone else can call and setup demo appointments, let them do it, but make sure they are qualified and trained.
Not that you shouldn't try to improve and formalize the sales process, but you should take a look at your existing customer base and find out what they all have in common. There are probably companies of a certain size and/or industry where you are making sales. Focus on this area. A small IT shop will close more deals going after small businesses than Fortune 500 companies regardless of your sales pitch/process. There should also be an effort to up-sell your existing customers. You'll close more sales with this group than making cold calls.
All this should lead to gather, analyzing and utilizing all these data to find what is working and what is not. The real benefit will come when you gain enough discipline to follow the evidence. You may have very good staff right now, but the more people you have to hire, the odds are they will become less qualified - sorry but that's how the math works. You want to be able to train the new people and make sure they do what works and avoid wasting time and money on what doesn't.
At some point sales has to become important. This can be difficult in a technology firm where too many believe if you just make something great it will sell itself. That rarely happens.
You might want to take a serious look at your business model before you begin to 'scale'. And define what 'scale' means to you. Most entrepreneurs think 'more customers' is the only way, but in fact this is often the most undesirable form of scaling a business. More customers equals more stress and more time and more pressure on staff.
A much more desirable method of scaling is to increase your price. Think about it. If you double the amount of customers, you have double the work. But if you double your prices, and lose half your customers - you're making the same amount of money and in half the time. This is the kind of scale dynamic you should be looking at.
You already have the right idea with your sales process. Instead of banging your head against a wall trying to scale it up, why not position yourself as an even higher level service and attract bigger customers, not more.
1.Find leads - Define your competition, your target markets, and definitely define exactly what needs your product will fulfill for them. Develop advertising and marketing campaigns for each segment of your market. Utilizing the competitive data you have researched (by doing a deep analysis of your competitors' websites, to determine where the advertise and who is linking to them), and implement a targeted campaign with various banners on each site. The trick here will be in defining which of your competitors have tapped into the markets that you want to be in, and then you will have a great starting point. The last post is correct - CRM is crucial, but you can make your own, if you're on a budge. Much of the literal funtionality of Salesforce you can set up and track with Google sites (so it's on the cloud). Salesforce gets pricey when you go over a few users, so I'd suggest spending that time to configure in Google, as far as the basic workflow is concerned (unless you just want to save time and use Salesforce), or you can always use Access. Note that Salesfore allows VOIP to work seemlessly, and allows for enhanced relationship sales with LinkedIn plugin, but there are always ways to enhance your own database with some of this functionality.
Previous posts regarding CRM which were useful - How to Build Simple CRM Tool (where I found this great list ), and Inexpensive or Free Tools to Organize your Contacts.
2.Qualify leads and convert them to opportunities.
Do they have money? The best way to determine this will be to get retainer, but you're going to have to meld #2 and #3 to really get this sales process going, because people want to see what kind of work you can do for them.
3.Find out how we can help them and create a proposal
This has more to do with understanding their needs. Taking time to ask scripted questions, provide them with a meeting space where you can consult with them (you can now use google and Word together to have a collaboration for free, but mockups will need to use a different interface). The will be opportunities only when you have determined that they're interested in a purchase, so therefore a little consulting will go a long way in determining what you can do for them which they may purchase (yet I would make sure not to send them anything in writing, because you don't want them shopping around, you want to close that deal ASAP after the consult).
If you've put the time into the consult, and haven't given them any files to take to the competition, they will hopefully like your work. Negotiation is more about calling their bluff, some back and forth questions and answers, and then asking for the sale.
5.Close the deal/sign contract
I'd suggest posting a new question and tagging it "legal" to get some of that contract language.
I'm writing an ebook that will cover a lot of how to do this. I've adapted parts of it to address your question. The advice below will cover your sales process, but you can and should apply it to any part of your business. Hopefully you and others will find it useful.
If you can measure it, you can improve it. There is a danger in getting lost in meaningless statistics, so I’m going to give you two metrics against which you should measure your sales processes. These are the only metrics that really matter when it comes to business: time and money.
Ultimately, you can reduce or convert everything (including time) to one metric. Money.
It’s easy to quantify the time of your employees, but it’s not just their salary that you need to count. You must also take into consideration their benefits, the taxes you pay for them, and any overhead including office equipment, supplies, rent and insurance. Project total costs for an entire year and then break it down to an hourly rate and you’ll get an idea of the true hourly cost of your employee’s time.
While that’s a good start, it isn’t enough. The whole reason behind measuring everything is so that your business can improve with the information you receive. If you’re not performing any sort of analysis and taking action on it, there’s absolutely no point in wasting time measuring.
You should be looking at the cost of performing certain actions and weighing it against the benefit received. It will quickly become obvious what’s working and what isn’t.
Once you’ve weeded out the obvious profit-draining candidates, start looking for bottlenecks in your business processes, even if they’re profitable. If you break down a business process into its constituent parts, chances are that you’ll spot a part of the process that is inefficient. You can measure inefficiency by looking at the time and money a part of the process takes versus the impact it has on the process as a whole. Highly inefficient sub-processes will take a lot of time and money but have little impact on the eventual outcome; highly efficient sub-processes will do the opposite.
The point of identifying bottlenecks in a profitable business process is so that you can increase your margin. If you’re able to optimize or even eliminate a bottleneck, that particular process will cost less, but still produce the same outcome.
Even if you have efficient and profitable processes, you still might be able to improve them to make them more efficient and more profitable.
If you can measure it, you can improve it. If you test it, you will improve it.
Testing sounds intimidating, but don’t let it scare you. In a business context, testing is measuring the ROI of two or more different business processes that accomplish the same task. The application of the test results means that you simply choose the method that is most profitable.
Here are some general principles for testing and improving your sales process:
In summary, look at what you are currently doing now for your sales process. Don't change anything yet, but measure everything to get a good grasp on what works and what doesn't. Then begin testing, one variable at a time, to see if you can improve your ROI. Once you find an improvement, adopt it as your standard practice and test again.
You'll find that if you can foster a culture of testing and change, your business will be far more agile and will be able to continually improve itself. If you're able to apply this principle of testing to your business, it will be worth more to your business than any pre-made marketing plan or sales process because it will be tailored to your business, your industry, and your employees. That's not to say don't look at other sales processes, definitely use them as inspiration, but make sure that they actually work for your business rather than just blindly applying them. Measure everything. Test everything. Best of luck!
With terms like "sales process" & "end to end communication flow" it looks more like a business model / customer development process need vs. a lead generation / management issue.
Here is a good presentation from venturehacks discussing this topic:
http://www.slideshare.net/venturehacks/customer-development-methodology-presentation Also worth considering - customer segment & value proposition. A recent book on the subject business model generation (preview PDF) is worth looking at for insight.
So you already have an idea of the potential problem with how you're doing things now. Some problems with communication, and maybe some other issues that have nearly messed you up.
Well, start with that. Put in a central communication system that everyone will actually use. Or better still, find something fit for purpose that you're already using, and start using that for sales too.
So if you're using Google docs, great. Or Sharepoint. Or dropbox with any common app. I'm a fan of ticketing systems - bet you already have one of those, and the problems it solves (where's all the information; who's on the case; what's not being dealt with) for support issues may be exactly what you need for your sales processes.
Whatever it is, choose it, start to use it, and review how it goes week by week. Maybe this will turn out to be enough for your culture, business and needs. If not, you'll have discovered the next most important issue. Either way it's progress.
What I don't recommend is that you jump straight from a situation where the way you're relating to prospective customers in order to find, get and deliver great work, to someone else's sure-fire sales system. Not that you don't have anything to learn, but that if you focus on 'great sales process' you may just disrupt a bigger system that's been working well.
First, some businesses scale better than others, but this does not mean that you cannot set in place a process to increase your activity.
Second, dont focus too much work and effort on developing a process, neglecting the rest of your business.
It seems to me, that what you need most are 3 things:
1. A SIMPLE crm system where you can track leads | Opportunities
2. A simple way to manage projects, and give your clients a way to view them.
3. A referral structure where you actively ask for referrals, (adding them to your crm), and perhaps reward those firms that give you the most referrals.
After placing these there legs in place, i would begin to grow it.
You can find online software to help you setup the 3 items, (3 does not really need its own app). I think the tools from 37signals should work great in your situation.
Afterwards, once you have this data, on a monthly or quarterly basis you can make adjustments. Say you decide to telemarket, find out how much you are spending per month on that versus how many Leads, Sales and Amounts of Dollars it returns. Do the same for email marketing, flyers, print ads and even your referral.
Having high level access to what processes work, will give you the most insight on what works best for you..
BEST OF LUCK, message if you need further details...
Virtuosi Media is right on target; however, the biggest key/opportunity, which is in the last bullet, needs to be your primary focus – SYSTEMATIZE!!! (sorry for shouting, but it’s that important.) That means document everything that is important to sales in terms of:
Alex, reiterating what you said in your “update” (in a positive perspective), you want your business to be sustainable, predictable, and scalable. The above five items, collectively, are the answer to your question and go well beyond the sales process – do it in everything your success-proven business does. There is much more, but those are the top five.
Thank you for not only asking, but also for sharing your own vulnerabilities with your busienss.