Companies that use a sales process are more profitable, on average, than companies that do not. But that doesn’t necessarily mean now is the time to design (or redesign) your sales process. Let’s take a look at some of the pros and cons of sales processes.
5 Sales Process Pros
As the opening demographic showed, there is a direct connection between having a sales process, and better profits. Here are some of the “pros” that lead to improving profits through sales process.
Effective sales processes have RIMS: they are repeatable, improvable, measurable and scalable.
- Repeatability: When no process is in place, it is difficult to repeat what works. Like playing poker without a strategy, each rep treats each deal differently, making it almost impossible to ensure a repeatable and predictable outcome.
- Improvability: With a sales process in place, when effective methods are discovered, they can quickly be shared across the team in the form of updates to the process. Without a process, it is difficult both to learn new lessons, and to share them with the team.
Measurability: Most organizations forecast revenue by setting a goal for X% improvement over the same period the year before, and they base production and other operational decisions on that factor. But the world is moving faster, and this legacy forecasting method isn’t keeping up. Having a sales process, along with reporting, means that annual forecasts can be fine-tuned in real-time.
While conducting recent case study research, an interviewee told us, “Our sales process metrics allowed us to see a slowdown coming months before our competitors. In response, we revised our business model. What would have been a serious disruption to our business was only a blip on the radar.” Sales process will increasingly define the difference between survival and failure.
- Scalability: Organizations are looking for opportunities to grow faster than they have to grow their staff. A sales process enables this kind of growth. Without a process, not only is it difficult to scale the sales team, but the behind-the-scenes support required by the sales team may have to grow faster than revenues – chipping away at margins.
Manageability: With a process in place, sales managers can identify opportunities to coach their teams, specific deals that require their direct involvement, and process updates to improve results.
5 Sales Process Cons
Those are some pretty compelling reasons to consider adopting a sales process. But there is a dark side that you should be aware of. Sales processes, when done incorrectly or at the wrong time, can spell disaster. Compare this list of cons to the list of pros to determine if you’re ready to take the next steps.
- Wrong Process: Oftentimes sales leaders assume that the place to begin a sales process is with a pipeline management approach. But for many sales teams, this is the wrong place to start. A better approach may include tighter activity management or lead qualification. Creating a new sales process rather than understanding what has worked historically and starting there, could mean distracting the sales team from what is leading to success.
- Complexity: There is often a tendency to over-engineer a sales process. The result can be a frustrating and time-consuming process that hurts the productivity of the sales team.
Repeatability: Both a pro and a con – it is just as easy to repeat worst practices as it is to repeat best practices. Well intended business analysts (or company executives) often develop a sales process without really understanding the implications for the front lines. This hamstring the sales team by repeating counter-productive steps.
Rigidity: Sales processes are different from other business processes – they balance flexibility (the human touch) with rigidity (standard steps). When sales processes follow the standard business process paradigm, they can be overly rigid, not allowing sales reps to flex to the unique needs of individual prospects. The resulting friction can cause lost sales.
Disruption: Any new business process will cause disruption. Disrupting the process of generating new business can have a particularly devastating effect. This should be considered in the planning and change management portion of the sales process project to ensure it is anticipated and mitigated.
Have you experienced any of these pros or cons? What others would you add to the list?