Eliminating waste in sales

If you are like most business owners and leaders, you are frustrated by waste. Especially when is it obvious like wasted materials in what we build or manufacture and wasted work hours when employees do incorrect work or make mistakes that cost us more time. 

These things often go beyond frustration to flat-out anger. Particularly when we can see how much it is costing us and the negative business impact of wasted time, energy, money, materials, resources, etc. 

Recently I spoke at a conference of contractors, and the attendees were all owners and senior leaders. I asked the audience what they thought acceptable material waste was in building projects. The consensus was 5-10% at the most. Then I asked what they thought was an acceptable close ratio in sales. Most answered between 25-50%, however some were as low as 10%. Next, I asked them how they would feel if they wasted 50-75% of the materials they bought. The audience shared that it would not be acceptable, and many said people would get fired if that was the case. 

So why do leaders look at waste in certain parts of their company so differently? To understand this better, we have to dissect a business. Every business, regardless of size, industry, etc. only has three parts: 

1. Selling what you do. 
2. Delivering what you sell (the product or service). 
3. Back-end operations and administration.

We tend to put tons of time and energy into focusing on eliminating waste in parts two and three. We implement processes and systems, we build tools, and we create resources to ensure we have minimal waste. However, when it comes to part one – selling what we do – we put extraordinarily little effort into the same. Instead, we think that is the way it has to be or that is the industry average. 

Imagine if you allowed the amount of waste and errors in other parts of the business that you allow in sales. If you are a builder, think about wasting 40%, 50%, 60% or more of the materials you use. If you are an accounting firm, think about wasting large percentages of man hours in getting work done for clients. The vast majority of business owners get uncomfortable thinking about that level of waste in delivering what they sell or the back-end operations. 

So why is it okay to waste so much in the sales department? Why do we accept low close ratios, wasted sales appointments, poor forecasts, and crazy expenditures on pursuing sales? Why is it so okay to waste time, energy, money, and other resources in pursuing and securing business, but not in the other parts? 

It does not have to be this way. If you are frustrated by this waste, either before or after reading this article, there is good news. We will be delivering a series over the next few issues on how to eliminate waste in sales. We will share articles on eliminating wasted time, eliminating wasted energy, and eliminating wasted money. 

In the meantime, if this waste is frustrating you, begin to identify where you see waste in your sales efforts. Focus on where you see time, energy, money, and other resources that are not leading to the outcomes or producing the results you want. If you don’t know how and genuinely want to improve, find a business growth consultant who can help.