The sales department bottleneck
/The Traditional Bottleneck Location
A business can enhance its throughput and therefore its profitability by locating the bottleneck in its operations and taking whatever steps are necessary to mitigate the impact of that bottleneck. For example, a bottleneck operation can be provided with an inventory buffer, additional staffing, outsourced production, more production equipment, and so forth. These concepts are frequently implemented in the production area to improve the capacity of a business to produce goods. But what if the bottleneck is actually located in the sales department?
The Sales Department Bottleneck
A good way to view the sales department bottleneck concept is to first examine the typical sales process, which is:
Locate prospects
Meet with prospects in an initial sales call
Conduct a product demonstration
Issue a quote to the prospect
Negotiate the terms of the contract
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If the sales manager is tasked with increasing sales, his first reaction will likely be to increase the number of sales staff, so that they can locate more prospects. However, adding more prospects may not be the problem. Instead, there may be a bottleneck further down in the sales process that is preventing additional sales.
How to Locate the Sales Department Bottleneck
To locate the sales department bottleneck, match the capacity level of each step in the process to the amount of actual sales activity being handled. For example, it is entirely possible that the group providing product demonstrations is too small, and can only provide a fixed number of demonstrations per day, no matter how many new sales prospects have been located. A likely result is that new prospects cannot obtain a demonstration in a timely manner, and so purchase from a competitor instead.
Thus, an examination of actual to available capacity at each step in the sales process will reveal where there are bottlenecks. Another clue is that there should be a backlog of work in front of these bottlenecks. The problem can be dealt with by adding staff to these operations, rather than just piling more headcount into a search for more sales prospects. In short, identifying the sales department bottleneck can result in a highly targeted decision to increase staffing only when doing so will clearly increase sales volume.
How to Prevent a Sales Bottleneck
We have just described how to detect a sales bottleneck, but an even better approach is to keep one from happening in the first place. Here are some options for preventing such a bottleneck:
Plan the sales process in advance, anticipating work volumes at each step in the sales funnel. This is a good way to initially assign sufficient staff to each step in the process.
Spend more time up front, prequalifying leads to keep them from entering the top of the sales funnel.
Be aggressive about eliminating sales leads at each step of the funnel as soon as it become apparent that they will not result in sales. This can significantly reduce the number of leads in the funnel.
Provide sufficient training to your sales team, so that they can efficiently process sales prospects at each step of the sales funnel. This allows them to eliminate prospects as soon as possible.
Install a monitoring system over the sales funnel, so that you can detect blockages in the flow of prospects through the funnel. You can then reallocate resources between the various sales steps to reduce these blockages.
In short, there are several ways in which you can make your sales funnel more efficient, and reduce the possibility of having bottlenecks arise within it - though a fair amount of preplanning is required.