Good Times, Bad Times

Earlier this week, I had a great conversation with an executive consultant. He told me about one of his clients. The booming economy is being very good to this business owner. His company is actually selling more than they can handle.

He asked me if I could help his client and if so, how?

I told him I could and it all comes down to a simple equation with two variables. Simply put, the number of sales closed is equal to the product of the number of qualified opportunities and the probability of closing an opportunity. It looks like this:

Probability of Closing Sales

What does this look like? Imagine in today's economy of high customer confidence, a company is getting 1,000 opportunities per month and probability of converting a lead to a sale is 10%. Mathematically, it looks like this:

What happens when, not if, the economy takes a downturn? The number of opportunities drops from 1,000 per month to 500 per month. Without improving the probability of closing, the number of sales per month drops to 50.

I have yet to meet the company that is okay with a large reduction in sales and revenue. Even in the short-term, no one wants to see sales dip. This is why something needs to be done in good economic times. But, what?

A look at the equations tells us exactly what it needs to be done. The probability needs to be improved. In the scenario above, if the probability can be improved from 10% to 20%, the product remains the same, 100 sales per month. What's great is this is also the key to grow sales in a stable economy. If you want to grow sales, improve the probability.

The next question is, "How does your company improve probability?"

The answer comes from to important process improvement concepts, Rolled Throughput Yield (RTY) and Theory of Constraints (TOC). These two principle are important components of what we call Sales Process Engineering.

While these concepts appear foreign to most sales professionals, they are becoming a critical part of a successful sales organizations. Today, CRM's exist in the majority of companies. Sales Process Engineering optimizes the CRM by utilizing information to continually drive improvement.

Continuous Improvement is just that, continuous. It should begin before a problem arises.

Sales Process Engineering is at the heart of Selling More While Spending Less™.

#TOC #salesprocess #sales #salessigma #RolledThroughputYield #CRM #SalesProcessEngineering

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