Defining Value in the Sales Process

Much of Toyota’s success over decades has been attributed to Toyota Production System (TPS) or Lean. So, while the US auto industry charged ahead on its chosen path of destruction, Toyota remained competitive and viable. Interestingly enough, they have done this while keeping nothing secret. In fact, you would be hard pressed to find another company with more written about them in the last 25 years.

So, what is it about TPS that makes Toyota better? It comes down to the core principle, elimination of waste. To replicate their successes, it is important to understand the Lean definition of waste.

Waste is anything that does not add value.

Value is anything the customer is willing to pay for.

Value added activities must meet all three of the following criteria:

1. It changes the shape or form of the process or product

2. The customer cares about it

3. It is done right the first time

It is easy to see how all of this applies to manufacturing, but what does it mean to the sales process? Note I am addressing its relevance to the process and not the sale itself. This is an important distinction for reasons mentioned in an earlier blog (The product of the sales process, May 4th, 2009)

I don’t think sales professionals would disagree with applying the above definitions for value and waste to the sales process. What else do we call an opportunity worked on for twelve months only to find the customer is not willing to pay for it? Waste seems like a great definition to me.

It is for this reason we need to understand the customer’s “win” result. In doing so, we can shape the process to fit her needs, provide what she cares about, and not waste her time by having to rework the process. If the process delivers value, we can eliminate waste from the process.

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