The sales team was ready to throw in the towel, and management was ready to choke the sales department because their average sales cycle was longer than a pregnancy! But instead of giving up, they decided to start a Six Sigma project and give birth to a shorter sales cycle.
Unlock the secrets to a shorter sales cycle with ProcessModel simulation – cutting 9 months to just 5 weeks and increasing product sales
The Great Sales Cycle Shrinking Experiment
At the start of the project, we accepted the goal of shortening the sales cycle from nine months to five months. The completion date allowed for just four months of project work. That meant we couldn’t even observe one sales cycle. So, to see the process interactions, we gathered information from each part of the process and employed process modeling and simulation to link together the process behavior. Process modeling and simulation forced us to develop an understanding of the current sales process, then became a springboard to identify potent and unique techniques that cut our sales cycle to 35 days.
Creating a Win-Win with Reflective Garments
We add reflective materials to existing garments, creating a new safety product for the customer. Our reflective material has more extraordinary reflective properties and is more durable than competitors creating a better and more desirable end product. End users are likelier to use an all-in-one product rather than put a vest over a winter coat and prefer certain named products for fit and functionality. On the other hand, the garment manufacturer instantly taps into a lucrative new market with minimal effort and fulfills the customer preference. In addition, the company responsible for the end user has more satisfied employees that always use the safety product. This marriage of products is one of those rare instances where everybody wins.
Management’s Mind-Blowing Transformation
Our original project charter centered on reducing the time to complete the sales department’s processes. We would explore methods to simplify and standardize emails, quotes, bids, responses to questions, etc. Standardizing and improving all the communications with the customer would reduce errors and variability, which is critical to shortening the cycle time. However, even with all the changes, the process simulation showed a limited reduction in the cycle time.
An overview of the sales process looks like the following:
The process was quite frustrating to the salesperson. Almost every customer expressed interest in creating a “safety product line.” The salesperson would leave sample materials with instructions and check back in a few days. Almost always, the manufacturer failed to create an example product. The salesperson would check back in a week and get the same result. This process could go on for months.
Salesperson: “Did you create an example garment?”
Customer: “Not yet.”
Salesperson: “I’ll check back in a couple of weeks.”
After a while, the potential customer became annoyed and forgot the glow of the original sales presentation.
The Solution to Customer Delays and Sales Time Devourers
Even with process simulation, its challenging to see the magnitude of some problems. For example, we intuitively knew there was a lot of waste in customer interactions, but it isn’t easy to quantify. One of the features of ProcessModel is the Hotspot Evaluator, which gives you a Pareto chart of the significant time wasters in the model. It’s not just how long things took but the cumulative effect of the time wasters.
Using the hot spot evaluator from ProcessModel, the problem stood out like a sore thumb. Eighty-five percent of the waiting time resulted from customer delays. We turned the sample material over to the customer and then waited, and waited, and waited some more for them to act so we could close the deal. The major frustration came not only from delays but also from the number of follow-ups required, and the additional follow-ups were devouring sales time.
A Great Idea!
It was excruciating to watch the customer’s excitement and then be unable to secure production time to create the example garments. In one of the project meetings, the team was musing over the Pareto graph of delays in the sales process when suddenly, two people came to the same conclusion simultaneously. What if our company created samples for the customer? We could ask for three products, take the products back to our company, and have our seamstress produce the examples. What if we could have the seamstress work during the night and return early the next day with finished samples? The excitement of the sales presentation would be fresh in the minds of the customer, and their probability of moving forward would skyrocket.
We created an updated model to show the proposed changes to management. Compared to the old way of doing business and the old model, the new system moved the sample creation to our organization. At first, management was concerned about the extra cost of resources