Integrated sales pipeline management

2016 TOCICO International Conference
© 2016 TOCICO. All Rights Reserved.
An integrated design of Sales Pipeline
management for sales growth
sustainability
Namkee Chung
Chonnam National University, South Korea

©2016 TOCICO. All Rights Reserved.
The primary concerns of CEO
would be among others how to increase SALES
amount.

Marketing & Sales
Service
Product
SalesMarketing Profit
Customer(Existing, New)
Offer

Generic Sales Pipeline
Relationship
Acquisition
• Lead
Relationship
Management
• Prospect,
Account
Opportunity
Management
• Opportunity
4

The Goal of Marketing & Sales
Increase
opportunity
flow
Increase
conversion
rate
• Excluded
• Delayed
• Failed
Prospects Opportunities ContractsLeads
Increase sales
• Excluded
• Delayed
• Failed • Excluded
• Delayed
• Failed

Increasing Conversion Rate
Increase
opportunity
flow
Increase
conversion
rate
Increase sales

Increasing Opportunity Flow
Increase
opportunity
flow
Increase
conversion
rate
Increase sales

Issues bothering CEOs
• Salespeople spend only a small percentage of
their time selling
• Sales is lumpy and unpredictable
• There always seems to be conflict between
sales and other functions
• Salespeople are all but impossible to manage
Ref) Justin Roff-Marsh, How to build a high-throughput Sales Process,
White paper, 2007.

Dilemma of CEO
D’
Control
salespeople's
activities
D
Give
salespeople
autonomy
B
Maximize
conversion
rate
C
Maximize
opportunity
flow
A
Maximize
sales
Salespeople tend to over-represent the interests of customers.
Salespeople can not effectively use the working hours.
Restrictions on the sales activities is the time.
Selling requires local knowledge and flexibility.
Dealing with customers is like an art rather than a science.
No common patterns
for activities

Justin’s assumption
• There is an inverse relationship between conversion
rate and the amount of time salespeople devote to
business-development tasks(opportunity flow).
• When conversion goes up, sales volume goes down.
– It is non-linear one: incremental increase in conversion
invariably come at the expense of exponential decrease in
business-development capacity.
– Sales people achieve increases in conversion by assuming
responsibility for more and more tasks. Because most
salespeople receive equal credit for repeat purchases and
for new-client acquisition salespeople spend increasing
amount of time for servicing existing clients.
Justin Roff-Marsh, How to build a high-throughput Sales Process, White paper, 2007.

Justin’s approach
Control
salespeople's
activities
Give
salespeople
autonomy
Maximize
conversion
rate
Maximize
opportunity
flow
Maximize
sales
No common patterns
for activities
Division of Labor
Standardization
Centralized scheduling
Justin Roff-Marsh, How to build a high-throughput Sales Process, White paper, 2007.

My approach(Injections)
• Centralized scheduling
– Division of Labor
– Standardization
• Closing initiative
• Correct responsiveness to customers
– Care to increase Conversion Rate

My approach(Injections)
Control
salespeople's
activities
Give
salespeople
autonomy
Maximize
conversion
rate
Maximize
opportunity
flow
Maximize
sales
No common patterns
for activities
Closing initiative
Correct responsiveness to customers

How to achieve?
• Centralized scheduling
– Sales Pipeline Management
– Applying TOC-DBR and/or CCPM
• Closing initiative
– Sales Pipeline Management
– Using TOC-TP
• Correct responsiveness to customers
– Using TOC-TP

Presentation Agenda
1. Methods for Sales Pipeline Management
 Centralized scheduling
2. How to apply TOC-TP for Sales?
 Secure Closing Initiative
 Correctly responsive to customer needs
3. Conclusion

Example: Manufacturer’s SP
Customer Avtivity Objective
Lead
1.Seeking Lead collection plan
2.Updating Update the list
Prospect
3.Communicating Meeting appointment
4.Face-to-Face
Meeting
Establishing partnership
Opportunity
5.Pulling Requesting for proposal
6.Negotiating Getting a contract
16

1. Leads Seeking
1-1 Defining criteria for eligible Lead
business
sectors
business
size business area
1-2 Information source
Government Community
Web, Facebook, Blog, LinkedIn
Seminars Exhibitions Newspapers
Reports
1-3 Getting recommendations
from existing customers
from friends
17
Objective: Construct a plan for Leads collection

2. Leads Updating
18
1-1 Collecting Leads
By yourself Recommendation
1-2 Updating the Lead list
Classification Numbering
Objective: Update the Leads list

3. Prospect Communicating
19
3-1 Preparing materials for communication
Company
Product/ServiceSales amount Finance Policy
External environment
Market trend Competitors
Salespeople’s Script
3-2 Scheduling
Priority Timing Execution record
3-3 Execution
Phone call Mailing
Courage Becoming accustomed to rejection
Conversation skill
Objective: Secure a face-to-face meeting

4. Prospect Meeting
20
4-1 Preparing materials for face-to-face meeting
Information of the prospect
Who is the contact/decision maker?
4-2 How to introduce yourself?
Go into fast to the point!
Design what to talk
4-3 How to respond to customer questions?
Gaining confidence each other
Not to suggest a solution
4-4 Questions for investigating customer
Search for common interest
Goal/Objective Issues Desired effects
Current needs Potential needs
Open-ended Question
Objective: Construct reliable partnership

5. Opportunity Pulling
21
5-1 Investigate the reason why the customer want to buy
Purchasing reason
Personal reason
5-2 Presentation to deliver the value
Solutions of problems (organizational / personal benefit)
Not boast the product
Highlight the Services
5-3 Getting the request for proposal
Arrange some
events for
decision making
Test Prototyping Exhibition
5-4 Lead the initiative toward closing
Prepare in advance the closing criteria
Objective: Getting the request for proposal

6. Opportunity Negotiating
22
6-1 Construct a proposal
Customer Profitability
ROI
Win-Win Solution(Mafia Offer)
Price Delivery Service
Any other issues to be dealt with?
6-2 Revise the proposal
Why does customer reject it ?
6-3 Suggest an appropriate closing
Prepare in advance the closing criteria
Objective: Winning a contract

• Sales Pipeline Card
• Visual Board
• An application of TOC-DBR and/or CCPM

3. Prospect Communicating
4. Prospect Meeting
5. Opportunity Pulling

TOC way to the Goal: Sales Flow
1.
Seeki
ng
2.Up
datin
g
3.Co
mmu
nicati
ng
4.Fac
e-to-
face
meeti
ng
5.Pull
ing
6.Neg
otiati
ng
2.
2.
3.
4. 6.
5.3.
4.4.
3. 5.
2.
2.
2. 2.
2.
2. 2.
2.
Lead Prospect Opportunity
Sales LT
Little’s Law: Throughput = WIP / LT

Example: Visual Board
26

Date Leads Prospects Opportunities Delivery Sequence
2.26
S1,S2,S3,S4 P1:Friendly
P2:Pending
P3:Unfriendly
N1:Proposal
N2:Test
N3:Review
D1:Shipping
D2:Install
D3:Paid
N1, D2, P2
2.29
S1,S2,S3,S4,
S5,S6
P1:Friendly
P2:Pending
P3:Unfriendly
S3:Friendly
N1:Proposal
N2:Test
N3:Review
P1:Proposal
D1:Shipping
D2:Install
D3:Paid
N3:Assembling
P1,P3,D1
3.2
S1,S2,S3,S4,
S5,S6,S7
P1:Friendly
P2:Unfriendly
P3:Unfriendly
S3:Friendly
N1:Pending
N2:Test
N3:Review
P1:Proposal
D1:Shipping
D2:Paid
D3:Paid
N3:Assembling
P2,P3,S7
27
A tool for Centralized Scheduling
Sequencing Rule:
• Customer Request Time
• Closing Necessity
• Available Time
Example: Visual Board

Presentation Agenda
1. Methods for Sales Pipeline Management
 Centralized scheduling
2. How to apply TOC-TP for Sales?
 Closing initiative
 Correct responsiveness to customers
3. Wrap up
28

Closing initiative(1/2)
• The longer salesperson stay at each step, which
makes the the sales LT longer, the more is wasted
the Activity Time Resources of salespersons.
• Especially, obsession to the conversion rate makes
each phase prolonged.
• So it would be better to do in a way that shorten the
length of stay at each phase, without deteriorating
the conversion rate.
• So the salesperson need to be encouraged to finish
each step in reasonable time.
29

Closing initiative(2/2)
• If salesperson finishes each phase in reasonable
time,
 The number of completed phases increases.
 Sales can be improved without sticking to the conversion
rate.
 This requires salespeople to upgrade their ability of
effectively responding to customer needs.
30

Expected Effects of using TOC-TP
Conversion rate goes
up
TOC-TP is utilized
Assumptions of both parties are exposed
Being correctly responsive to customer needs
Good Offer is made
Sales LT is shortened
Opportunity Flow
increases
Closing Initiative is reinforced

Developing Good Offer
• Recognition of customer’s core requirement
– Existing customer
– New customer
• Solution development
– Satisfying customer’s core requirement
– Securing company profit
• Terms & Conditions
– Fitting solution to requirement
– Win-Win Offer
32

Co-operation between functions
Service
Product
core requirement
SalesMarketing Profit
Solution
Good Offer
core requirement =
Solution
Operation R&D
Marketing & Sales
33

TOC-TP to develop Good Offer
Contents to be developed
Target
Tree
Branch Cloud
4-1 Preparing materials for face-to-face
meeting
✔ ✔ ✔
4-3 How to respond to customer questions? ✔ ✔
4-4 Questions for investigating customer ✔ ✔
5-1 Investigate the reason why the customer
want to buy
✔ ✔
5-2 Presentation to deliver the value ✔ ✔ ✔
6-1 Construct a proposal ✔ ✔ ✔
6-2 Suggest an appropriate closing ✔ ✔ ✔
34
Correctly responsive to customers

Example: Customer’s Requirements
1. I’m using third-party machines. Is there a way to buy your
machine?
2. Currently my products are outsourced. Why do I have to buy
equipment?
3. Now being reviewed second hand, is there any reason to buy
new?
4. For the price expensive compared to competitor’s, can you
cut it down?
35

Exercise: Using CLOUD
1. I’m using third-party machines. Is there a way to buy
your machine?
36
Change Brand
Not change
Brand
Reducing
Risks
Securing
Opportunity
Clever
Purchasing
There may be a better condition
Improving profit is high priority
No disqualification in current brand
Decision making for change is not easy

Preparing to deliver the value
• Customer’s perceptions(Assumptions) are
– No disqualification in current brand
– Decision making for change is not easy
– There may be a better condition
– Improving profit is high priority
• My preparations(Injections) are
– Analysis on customer’s ROI with my machine
– Supporting plan to make the machining operation
easy
– Not to mention the functionality of the machine

Exercise: Using TARGET TREE
Target: We adhere to the normal value in this deal.
Obstacle Intermediate Objective
1. There is no way of securing the
customer a fair return on
investment.
1. We look for ways of ensuring a fair
return on investment.
2. We cannot meet the decision
maker.
2. We request the decision-making
arrangements with a person of
authority.
3. Customers have no experience
using our equipment.
3. We provide an opportunity to test
our equipment to produce.

Exercise: TARGET TREE
2. We look for ways of
ensuring a fair return on
investment.
1. We look for ways of
ensuring a fair return on
investment.
We adhere to the normal value in this deal.
3. We provide an
opportunity to test our
equipment to produce.

Exercise: Using BRANCH
What-if Simulation: What would it be if we suggest the
normal price?
The customer rejects
the purchase.
We suggest the normal
price.
.

Exercise: BRANCH
What-if Simulation: What would it be if we suggest the
normal price?
The customer rejects
the purchase.
We suggest the normal
price.
.
Technical
support
The customer reviews the
purchase positively
Personnel
support
Materials

Concluding Reality
Control
salespeople's
activities
Give
salespeople
autonomy
Maximize
conversion
rate
Maximize
opportunity
flow
Maximize
sales Good Offer (TOC-TP)
Centralized scheduling (TOC-DBR/CCPM)
Closing initiative (TOC-TP)

Namkee Chung
•Professor at Dept. of Industrial
Engineering, Chonnam National
Univ., South Korea
•President of TOC Korea
Association
•Author of books(Korean); TOC
Constraint Management(1999),
TOC Golden Rule(2002),
Performance 200% Up TOC(2005),
TOC Inventory Management(2013)
•Co-translator of “Necessary But
Not Sufficient(Goldratt)”, “Smart
Thinking(Khwa Choon Ean)”
•Consultancy to companies in
supply chain, project management,
strategy & Tactics
•Email: tockorea@naver.com
•Mobile: +82-10-3601-1785

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