A sales manager reviews his sales pipeline management using SCOTSMAN methodology
The Four Essential Areas of Inspection in Strategic Sales
8th June 2020
A sales leader manages her sales forecast whilst sales process planning with her team
How to Manage the Sales Opportunity Review Process Remotely
4th September 2020

Eliminating The Root Causes Of Lost Opportunities

A sales leader uses root cause analysis procedures to improves sales forecasting

Join our mailing list to receive our latest posts and updates.

    One of today’s biggest issues for senior management is to achieve the predictability, reliability and consistency of business results demanded by key stakeholders.

    If sales forecasts are running short of expectations, it’s human nature to point towards factors outside of our control, such as conflicting demand signals from sellers or a shaky market (COVID-19, arguably being the likely narrative at present).

    Sales teams must, however, also explore internal reasons to why deals stall or are lost, and initiate remedial actions where necessary.

    According to a recent Gartner Report (Gartner – Response to COVID-19), proactive sales teams are addressing the COVID-19 impact of softening demand and market disruption by rapidly assessing what is working internally and what is not. They are drawing conclusions quickly and making the adjustments necessary to their sales operations.

    Applying tools and processes that arrive at the true root causes of selling issues is therefore critical, especially as Gartner (Gartner – Why Sales Deals Stall) also suggests that 20% of stalled or lost deals result from internal complexity, such as workflows, policies and procedures within the sales process.

    This internal complexity typically leaves sellers operating at a 12% lower conversion rate than they could. Not a great position to be in when times are very tight and every deal counts.

    Sales organizations often fall into the trap of identifying root causes that are unquantifiable, or highlight problems that are outside of their domain. Too often, the tendency is to point to problems outside the control of Sales.

    A Structured Approach

    In most cases, issues arise because of a sub-optimal process, or no process at all, affecting one or more key areas. A simple, well-structured approach that provides a clear view, and important starting point, is essential.

    The use of a diagram such as an ‘Ishikawa’ is arguably the best way to present groupings of the most important areas for consideration when uncovering root causes. Giving meaningful groupings to areas for improvement, using an Ishikawa or similar, will help Sales to identify and solve fundamental problems that limit their results.

    By working through each group and its components in detail, teams are encouraged to deal with each problem area separately, select the most likely root causes and prioritize, plan and implement actions.

    We recommend the 5 WHY’s approach. If you can ask the question “WHY?” about a problem, you have not got down to the root cause and isolated it. Keep asking “WHY?” until you reach a point where the question cannot be asked any more.

    True root causes nearly always impact more than one problem. The more thorough the analysis, the wider the potential improvement and the broader the impact of remedial actions on the bottom line.

    Positive outcomes include:

    • Cost reduction, enabling your pricing to be more competitive.
    • Capacity to redeploy resources to improve the quality of prospecting, or other key activities.
    • Improved effectiveness of the sales process.
    • Greater people productivity.

    These outcomes all contribute to better odds of winning deals and the ability to forecast the resulting business more accurately.

    For a fuller description, with examples that illustrate how to perform the process in practice, read our Brief Guide to Forecasting Improvement through Root Cause Analysis.

    If this blog and our guide resonate with you, please reach out via our contact page.

     
    Mike Wilkinson
    Mike Wilkinson
    Managing Director Advance - Creators of SCOTSMAN®