By Robert J. Donahue
October’s article addressed some basic steps to measure the quality of sales. This time, I want to address why the concept of quality sales must be addressed and some of the problems faced.
One of the misconceptions concerning quality in the sales process are those who subscribe to an out-dated philosophy that it is production’s responsibility to improve and measure quality in terms of customer satisfaction. When measuring quality improvement in the sales process, management must move away from a holistic approach to quality improvements. This movement begins when they internalize a simple concept: When measuring quality as part of the sales function the rewards can be far greater than they are in manufacturing.
For quality practices to be interfaced into sales you need to rethink the sales process. Improvement is only possible when you view your entire business as a continuous quality loop, or process, with the customer as its initiator.
Salespeople typically never touch the products they sell. Therefore, quality improvement efforts in the sales function are typically not attempted, much less formalized. Measuring quality in sales is presumed to be too difficult. Yet, if you were to review the reasons behind most reruns and missed delivery dates, the answer lies in poor communications from sales.
The value of a sale
The big problem is in how management measures the value of a sale. The sales function has for years erroneously been measured against financial objectives such as bookings, profits and operating objectives, including hit and miss rates. These measurements are generally determined using nothing more than “seat-of-the-pants” hunches or best estimates of potential sales from a given customer, group of customers, or region. Financial objectives, when used as a measurement too, l have nothing to do with the quality of the sales much less service improvements.
In fact, this type of measurement is the root cause for misdirecting the sales force in how to build customer loyalty. The success rate of 80 percent of salespeople today is so far off base that it is surprising that companies survive. Yet management will use the economy, competition, cost of raw goods and poor employee practices as the reason that profits are so low. Added to this list is the fact that salespeople generate expenses and absorb a high percentage of the company’s costs of compensation. Salespeople are the essential communicator between the internal and external customer, and more than any other group direct the actions of manufacturing.
A recent report put out by the American Management Association (September 2002), stated that 85 percent of all paperwork includes at least one error. That might not seem like a very high percentage, but erroneous or missing information not only clogs the sales process, but also plays havoc on downstream processes. Erroneous information initiates a chain of wasted effort and money and eats up more than 25 percent of the operating budget.
There are other identifiers, beyond the financial cost to measure and improve the quality of the sales in quantitative terms, these include:
Improved Sales Management. Measuring current and potential nonconforming process errors related directly to poor or missing information from sales. This will give management an objective evaluation and guidelines for corrective actions when entering a job into production.
Improving the Performance of Salespeople. Share information to improve performance of the organization. I have never been able to figure out why salespeople will spend hours with a customer gathering bits of information, and then keep the information to themselves. When common sense dictates, information must cascade throughout the organization. How can any organization meet the customer’s requirements if they have nothing to measure against?
Retain Existing Customers. Sales-and-customer oriented companies know that a customer is a lifelong asset that appreciates every year if managed properly. It is vital to any business to retain its customers for a number of reasons, the most viable of which is cost. It costs five times more to create a new customer than it does to keep and cultivate on old one.
Attracting New Customers. The best and most effective communications network of all is word of mouth. Customers talk about salespeople as much as products.
Customer Satisfaction and Value-Added Service. When establishing a quality program in relationship to sales, the efforts must concentrate on customer requirements and satisfaction. In order to meet customer requirements written and unwritten, your sales services effort must meet user needs. Your goal is to enhance the use of the product by providing superior support for the existing and developing needs of the customer. A customer sees this support as having a quality sales program in place that works.
Your Focus Should Always Be Value and Satisfaction. Customers define value in their own terms. If you want to satisfy your customer, you have to look through their eyes. When you or I make a purchase, we are not buying value directly. What we are buying is an expectation of perceived value. We don’t, and won’t, find out until later whether those expectations were met.
Why is it important to understand that the customer is purchasing an expectation of value? It’s simple. The value may be greater, or less than, the expectation. If it’s greater than expected, you both win, if less, you both lose. Remember, at the moment of sale, the customer expects the benefit to be greater than the cost. This is what I meant when I said they are purchasing an expectation of value.
When dealing with customers you must realize that if anything happens during, or after the sale that adds to the cost, or decreases the expected benefit, the value is decreased, and you have an unhappy dissatisfied customer. What counts more in today’s graphics marketplace is perceived value and benefits. Most firms today concentrate more on the money or profits, than the cost to the customer. By doing this they make the mistake of losing their perspective for fully servicing the customer.
Remember, additional cost seen through the customer’s eyes is time and frustration. Here are four simple questions in determining if your customers encounter frustration.
- Do customers have to deal with management if there is a problem?
- Are delivery dates promised and missed?
- Have customers complained about having to reschedule?
- Have customers complained about the time spent trying to get through to your production staff, customer service reps, sales or accounts receivable?
If you answered yes to just one question, guess what, that’s one too many.
Here are three sales quality service related questions to consider:
- Do you have a written policy on how quickly quotes are turned?
- When customers have questions, is the response timely and accurate?
- Do your front-line people have the authority to give customer satisfaction on the spot?
If you answered no to just one question, guess what, that’s one too many.
Without systems that allow you to monitor how customers, internal or external, see your business you limit your ability and narrow your focus on how best to serve them.
If you don’t focus on your customers, someone else will—someone who knows how to measure and control his or her organization, someone who understands what quality sales management means.
You must learn to measure and control your sales operations before customer satisfaction can even begin to become a viable concept.
Robert Donahue is president of the Graphic Arts Training Council, which specializes in ISO 9000 and TQM systems. He can be reached at (818) 567-1357, or at email@example.com.