Developing and formalizing sales process


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:

  1. Find leads
  2. Qualify leads and convert them to opportunities
  3. Find out how we can help them and create a proposal
  4. Negotiate

  5. Close the deal/sign contract

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!

Sales Business Process Growth

asked Nov 20 '10 at 09:12
262 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll
  • So is the pricing above 50K to business then? – John Bogrand 13 years ago
  • hm... I am not clear what are you asking? – Alex 13 years ago

9 Answers


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.

answered Nov 27 '10 at 13:49
Jeff O
6,169 points
  • Good advice Jeff, thank you. – Alex 13 years ago


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.

answered Nov 27 '10 at 09:19
Mr. Schwabe
147 points
  • +1 - Good advice. – Virtuosi Media 13 years ago
  • great advice indeed. I have been thinking about doing that for a long time. Biggest obstacle here - if I raise prices, I will need to work with bigger clients and from my experience bigger clients need their vendors to be 'bigger'(we already lost few big jobs cause we were "too small"). On top of that I have such a hard time figuring out how to even get to bigger accounts. – Alex 13 years ago
  • Think laterally. What can you change or add to your business to increase your value in the minds of those bigger clients? Besides, is sales really about how 'big' you are? Or is it more along the lines of does the customer see a unique advantage in working with you. – Mr. Schwabe 13 years ago
  • These are some great questions, I'll keep on meditating on :) Thanks! – Alex 13 years ago


There are consultants that help with this kind of thing (I like Paul Kenny ), but your question is rather open-ended so it's hard to give you a concise answer.

answered Nov 20 '10 at 13:46
Joel Spolsky
13,482 points
  • Thanks Joel, I've revised my question somewhat. Hopefully it's clearer now :) – Alex 13 years ago


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.

answered Nov 27 '10 at 11:15
315 points


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:

  • Test everything - You can test any
    aspect of your business process, from
    scheduling to marketing to
    development and distribution. The
    possibilities are endless and nearly
    every aspect of any business can be
    improved in some way.
  • Each test should be simple - If it’s
    too complicated or difficult, the
    test results may be affected and the
    success of the test is at risk. Also,
    if the goals of the test aren’t
    clearly communicated with those
    involved, it’s easy to run into a
    situation where employees don't understand what is going on and resent the tests.
  • Use cost-based measurements - The key
    to a simple test is to find the most
    relevant and objective measurement.
    Usually that measurement is cost
    because almost every business process
    can be reduced to a monetary value.
    Measure absolute cost.
  • Measure first, test second - It’s
    vital to have a base set of data from
    your current way of doing things
    before you start testing changes to
    your business process. If you don’t
    know where you are, you’re never
    going to be able to get to where you
    want to go.
  • Measurement should be easy -
    Measuring should be quick, automatic
    if possible. The cost of performing
    your test should not exceed the
    benefit you gain from its results.
  • Simple tests produce easy analysis -
    Your test results should be apparent
    at a glance or with minimal analysis.
    If it takes longer than a few minutes
    to perform your analysis, chances are
    that you have too many measurements
    or that your test is too complicated.
  • Test smart - Start testing with your most obvious inefficiencies or where you have the most to gain in terms of ROI.
  • Fail fast – Review your results
    periodically throughout your test. If
    it’s clear that the changes you are
    implementing in your testing are
    producing obviously inferior results,
    stop that particular test. There’s no
    reason to waste money needlessly.
  • Failure doesn’t mean quitting – If
    your test fails to produce positive
    results, try to figure out why that
    particular change was detrimental.
    Form a hypothesis and perform another
    test using your newfound knowledge.
    At the very least, you have
    discovered a method or business
    practice that shouldn’t be used.
  • Apply your test results – The whole
    point of testing is so that you can
    refine your business processes and
    ultimately improve your bottom line.
    If you don’t take what you’ve learned
    and apply it, you’re just wasting
    your money and time.
  • Expand what works – If 80% of your
    profit comes from 20% of your
    activity, do everything you can to
    expand that 20% of your business.
    Concentrate on and expand the
    activities that bring you the most
  • Eliminate what doesn’t work – By the
    same token, if only 20% of your
    profit comes from 80% of your
    activity, why is that 80% such a
    large part of your business? Too many
    people keep doing the same thing,
    expecting to get a different result.
    If your measurements and testing
    reveal an area that is inefficient or
    unprofitable, first try to improve it
    through testing. If it can’t be
    improved and isn’t essential
    supporting infrastructure, be
    ruthless in eliminating it.
  • Look for patterns and principles – As
    you test and refine your business,
    patterns should begin to emerge that
    you can apply to other areas of your
    business and life. You can save a lot
    of time and effort by looking for
    abstract patterns and principles. Be
    aware of them, but don’t apply them
    blindly to new areas without testing
    them first.
  • Systemize and automate – As you
    refine a business process through
    testing, look for ways to integrate
    it into a system that can be easily
    executed. Document your system so
    that anyone can do it with minimal
    supervision or instruction. Wherever
    possible, automate your system so
    that it can be run with the least
    amount of effort as possible.

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!

answered Nov 27 '10 at 05:33
Virtuosi Media
1,232 points
  • Can someone explain the downvote? – Virtuosi Media 13 years ago
  • Can't explain the downvote, but I disagree with your assumptions. If you can't quantify something, it is impossible to determine if you have improved it, but it does not directly lead to improvement. Money is only half of the equation - time is the other. Making a million dollars is useless if it takes you a hundred years. You make it sound as if testing is some sort of panacea. Many companies have conducted test, made changes and lost a lot of money - ever hear of New Coke? That was suppose to beat the Pepsi Challenge. – Jeff O 13 years ago
  • If it was just about testing, then it wouldn't lead to improvement. The second half of the equation is applying what you learn from the test. Not every test will produce better results. You only keep what works. What I'm suggesting is a systematic cycle of testing-analysis-improvement. Did New Coke mean that Coke is now out of business? No, they tested something (New Coke) in the market, found out it didn't work, and reverted to the old formula. I agree that time is a factor, but you can convert it to a monetary value. Each unit of time is worth X dollars. 1 measurement makes it easier to test – Virtuosi Media 13 years ago
  • wow, that's great. Thank you! Some of these items I am already doing, but some I guess I am not taking these far enough, not with sales anyway. – Alex 13 years ago


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: Also worth considering - customer segment & value proposition. A recent book on the subject business model generation (preview PDF) is worth looking at for insight.

answered Nov 30 '10 at 03:57
Jim Galley
9,952 points
  • Yes, I am familiar with this methodology. Actually read Steve's book about it. For some reason I had some hard time applying it... Tried 2 times actually didn't work all that well... I guess I am doing something wrong. – Alex 13 years ago


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.

answered Nov 20 '10 at 18:57
Jeremy Parsons
5,197 points
  • Jeremy, beautiful advice - thank you! We do use FogBugz as our ticketing system, and a mix of Dropbox and Google Docs for CRM-like management of customer data. I am looking at things like Salesforce and Zoho right now, but these are just the tools so I am trying to solve the actual problem before I stick with tools for it. One problem is though that the bigger system that's in place right now is not working all that well. It brings in business but I(and my partner) feeling stuck...growing very slowly – Alex 13 years ago


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...

answered Nov 27 '10 at 10:43
2,079 points


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:

  1. Customer Interactions. Every customer interaction that you intend or can reasonably anticipate must be identified. You want clarity as to what is to happen, why, by whom, and the documentation/metrics to be created for each such interaction.
  2. Best Practices. You know how you want sales done (whether it’s the way that you have done it or someone on your staff). (If you don’t know, hire a consultant to help.) Document it so your staff can be trained to do it that way. (This is a key to the scalability that you want.) As you discover issues or improvements, update your documentation and retrain. Train, train, train as sales guru Chet Holmes preaches.
  3. Measurability. Make everything measureable (within your documentation). Remember the adage – what gets measured gets done. Measurement is also key to scalability and quality control. Build measurements into your best practices. Make sure that if your sales staff is supposed to do certain things, that there is a check list or other measurable criteria that they complete that shows that it’s been done. The resulting data is key to being able to manage quality as organizations expand.
  4. Continuous Improvement. One you have the above, you are positioned for aligning your organization with Edwards Deming’s Plan-Do-Check-Act continuous improvement process.
  5. Lead Generation. This is not as much about creating documentation as it is reading a document – actually a book. Check out David Scott’s book “The New Rules of Marketing & PR ”. Most software develop firms are still living in the old world of lead generation. Scott’s book will change your business life. Check out some of the reviews in Amazon and you will be sold. It has totally changed my business start-up and, as a result, I am engaging angel investors based, in part, on what I gained from the book.

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.

Good luck!

answered Nov 27 '10 at 12:44
128 points
  • Thank you Craig! – Alex 13 years ago

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