Nov 22, 2009 | Demand chains, Management, Operations, Sales
If you want a prediction, go to the lady in the tent at the local fair.
If you want a forecast, talk to those who have an intimate knowledge of the drivers of the outcomes you are seeking to forecast.
Good forecasting is an iterative process, the more you do, the better you get, so long as you understand why the forecast is (almost) never right on each occasion it is done. Continuous improvement techniques are the core functions of good forecasting.
Forecasts are also improved when you leave aside some of the algorithms that manipulate the past into a forecast, and look instead at the drivers of demand, sometimes a qualitative input, to get a better picture of the sales that may come along. If you are selling ice-blocks, it is useful to look out the window to see how hot it may be, and factor that into forecasts, not just rely on sales over the last few weeks.
Oct 25, 2009 | Management, Sales
Generating and qualifying leads is a key function that rarely receives the attention it deserve, and is rarely measured for effectiveness other than looking at sales results.
Like any process, if it can be measured against performance standards, improvements can be made, and in these interesting times, enhancing the productivity of the lead generation and qualification process can only lead to greatly enhanced outcomes.
Most leads emerge as knowledge that a firm is “in the market” that is, they already buy something that you could supply, from somebody else, but if that is all you have, price is the only lever.
Before trying to sell them on your price, set out to understand why they buy, what problem does the product/service offer, how does it make their life easier? Once you know that, the selling becomes a different process, and price is less of a factor.
A sales lead is only of real value when you know why they buy, so why not set about building information on the conversion rates y0u get with differeing levels of knowledge about the “why”, ie, measure the effectivenes of the lead at the first point where you ask for the order, and relate that to how much you know about the “Why”.
Oct 23, 2009 | Demand chains, Management, Operations, Sales, Small business
Demand chains are a representation of the drivers of “flow” through a supply chain, a concept familiar to those engaged in “lean” initiatives, when the motivator to the flow is demand rather than an ability to produce for inventory or against a forecast of sales.
Category management is a process of welding the drivers of demand, the consumer preferences and behavior to the supply of their preferred products, whilst maximizing the returns to the retailer, and others in the chain, as well as delighting the customer.
Few who claim to engage in category management would see the explicit link, as they are typically engrossed in the numbers, but it is there nevertheless, and the successful exponents recognise the link, and leverage the numbers for the sake of the outcome of the entire chain, not just for one link who happens to hold the power.
Oct 21, 2009 | Management, Sales, Small business
It is pretty obvious, although not always acted on that you should define the problem before you spend time trying to sell a solution.
There are many techniques to getting to the point where the sale can be made, libraries have been written, but in my experience, 3 simple questions will get you there. They are not easy to answer, but once you have, a sale is the easy bit.
- How can you help your prospect build sales?
- How can you help your prospect to decrease costs?
- How can you help your prospect to increase productivity?
Answer these, and you have the problem your product can solve defined, and the sell is easy, after all, who can say no to any of these being delivered. One of the rules I use, never go into a sales situation (as distinct from an information gathering situation) without at least 2 of these answered in some form.
Oct 19, 2009 | Management, OE, Operations, Sales
Talking to a client last week about his S&OP processes, (or lack of them despite the software) I realised that we were both using English, but were talking a different language. This is often a challenge in S&OP implementations, and even amongst those who have successfully implemented in different businesses, as a local jargon usually emerges to accommodate the vagaries particular to the organisation, product type, and culture.
Following is a simplified list I gave to him as a basis from which the conversations could be translated, in the common order of S&OP preparation.
- Demand planning. A compilation of data (past sales, orders received & delivered, orders received and undelivered) and qualitative data from the marketplace (competitive activity, accounts won & lost, distribution changes, seasonal influence, and so on). This is not a forecast of what will be sold, it is a quantification of the influences on demand. This data is assembled in a huge variety of ways, often collated by the “Master Scheduler”, but not ideally to avoid capacity bias emerging too early, and the sales/customer management function, and operations management.
- Forecasts. A suite of forecasts for product families rolled into a consensus outlook based on the output of the demand planning process. At this stage it is unconstrained by questions of capacity & input availability. This is usually a specific role held by an individual, often titled “Master Scheduler” and is an ongoing responsibility, but signed off weekly for submission to the Capacity & planning meeting.
- Capacity & supply planning meeting, normally weekly. Puts the acid test of reality on the sales forecasts by adding the capacity and input availability constraints. The output is the daily/weekly production schedule to be executed based on the requirements and trade-offs/compromises that emerge from the more senior SOP processes.
- Pre-SOP. A meeting (normally bi-weekly) of the implementation level of management that makes the trade-offs and decisions that emerge from the Pre-SOP, ready for implementation, and identifies strategic resource allocation issues for resolution. This is the key meeting, and provides input to the senior S&OP meetings, and the capacity & supply planning meetings
- S&OP sign-off by senior management, normally monthly. Over time in successful implementations this becomes a rubber stamp on most occasions, but it retains the control of major decisions that need to be made that have more of a long term and capital utilisation impact than is available to the Pre-SOP management level. Things like new equipment, outsourcing, choices between major customers, contractual compliance, shift additions, and so on are usually signed off at this level.
Oct 12, 2009 | Management, Sales
Selling is all about finding the way your product can add value to your prospective customer greater than the price you are asking for it.
Why is it then that most selling activities I see are the commercial equivalent of “flashing” your wares and hoping the” flashee” is interested in buying?
Surely asking questions is a better way to find out what they may have a need for, often unrecognised until you are able to demonstrate the value of your solution.
So, ask questions, keep them open ended, focus on benefits delivered by your product, not on their features, and discuss them in the context of the prospects environment, which you define by questions.
Looking at a sales pitch as a negotiation, rather than simply a selling exercise can assist the process of questioning, identifying the other parties “buttons” is a part of the game, and the way to do that is with questions.
Still the best sales book ever written is “Spin Selling” by Neil Rackham, and this focuses on the process of questioning a prospect, leading to a sale.
It works.
