Better, Cheaper, Faster: Redesigning the Sales Lead System

An interview with Brien Palmer

This article originally appeared in the Fall 1998 issue of the Quality Management Journal.  It was written by Dan Stowell.  Reprinted by permission.

Thank you for your very positive  response to the Sales and Marketing Corner. We have received lots of encouragement and support by phone,  fax and E-mail since the first column  appeared in the summer issue of QMF.  Many of you also requested reprints of  the nine article series on quality in  sales. As a result, we will continue to  make the article reprints available. Just  contact the editor at the E-mail address or Fax number listed at the end of this  column.

In the last issue of QMF we announced that future columns would include stories from QMD members willing to share their own experiences in improving sales or marketing quality. This month, we have just such a story from QMD member, Brien Palmer.

Brien has been involved in quality since the early 1980's when he began in the nuclear industry as a quality  manager. Later he became an indepen dent consultant, and in 1994 he was  engaged by Respironics, a medical device manufacturer in Murrysville,  Pennsylvania. Early in his engagement, the company hired Brien to be a full-time internal quality consultant, and it  was during his employment at  Respironics that he was asked to help  improve the company's sales process.  We interviewed Brien recently, and  here is his own story.

dms: Brien, tell us a little about  Respironics.

Brien Palmer: Respironics develops and  manufactures medical devices. Its products range from non-invasive ventilators and portable volume ventilators to technology for the diagnosis,  treatment and monitoring of obstructive sleep apnea. The company has  about 600 US employees, and generated almost 180 million dollars in revenue in 1997, and it is growing rapidly.  As you can imagine, being in business of producing medical devices, the company is very focused on quality. If your  readers want more information on Respironics, they can check the company's web site at www.respironics.com.

dms: How did you get started on this project ?

Brien Palmer: About two years ago, the manager of internal sales approached me.  One of his responsibilities was to process sales leads such as those that came in from trade shows and telephone re quests. He said, "This isn't working.  We don't have a process. I tracked time to closure once, and it took me 60 days  to contact the customers, and that's just crazy. You work in the TQM department with re-engineering and stuff like that. Can you help me?" So I said sure.

dms: What happened next?

Brien Palmer: I told him that the first thing  he needed to do was to get a management sponsor, so we got the director of sales (now VP of sales) to fill that role. The next step was to apply my standard process for re-engineering. We put together a cross-functional team made up of people from all over the  company. Team members came from sales, marketing communications, accounting and information systems. I provided training in team skills. Then the team developed a charter and mission and reviewed them with the executives. They set expectations and defined the project deliverables. With  that foundation established, we assessed the existing process for responding to literature requests. We soon discovered that there really was no process. Everybody did it differently.  While the team was defining the existing process, a neat thing happened. One of the administrators said,  "You know this is really more than sending literature. We are dealing with  a prospect. This is a potential customer."

dms: How did that awareness afffect the project?

Brien Palmer: We decided to reframe the project. Instead of asking how we could ship literature faster, we decided to see how we could close more sales. Shipping literature was just one step in a larger process that resulted in a sale to a satisfied customer. It was a philosophical change, and from that day forward we started thinking about the sales process.  With that in mind, the next question the team raised was, why reinvent the process. So we benchmarked about six other companies for best practices. We got some really good information.  We also found the mother load of in formation on sales leads, a book called "Managing Sales Leads: How to Turn Every Prospect into a Customer". It re ally helped us build the business case for doing things a new way.

dms: What were some of the key  points in the book?

Brien Palmer: The major thing that I remember is that 45% of the companies who  inquire about a product will buy within  a year, and that's astonishing. They would buy from you or your competitors depending on who followed up. We also learned that 80 to 90% of the  people who inquire have the authority to buy. However, 22% of the companies who advertise never respond to re quests for literature. Of the companies who do send literature, the average  time to reach the customer is 58 days.  This told us that our current process  was about average, and that improving our sales process could provide a  real competitive advantage.

dms: What happened next?

Brien Palmer: We developed ideas for changing the internal process and the team  created various scenarios where they would design the process and then lay  it out on a table top. We call them table- top scenarios. Then we would pilot test  it in one area. After a successful test, we wrote up the new procedures and  initiated it throughout the organization.

dms: What were the results of your new procedures7

Brien Palmer: Our most dramatic improvement was reducing the cycle time from 60 days to 2 days. This is how long it takes to respond to people who want product information. Our customers  have appreciated the improved service. They tell us that they have never had service like this before In contrast, our benchmarking told us that in many  companies a very high percentage of  leads just get dumped. I have summarized some of the other benefits in this table. (See figure 1)

dms: How did you handle process  measurements?

Brien Palmer: One good example was the  way we measure the cost of leads and the effectiveness of attending trade shows. When you look at a lead on a piece of paper, it is easy not to think of  the cost. However, there are significant costs in going to a trade show in terms  of hotel bills, travel, shipping and setting up the displays and this does not even count the salaries of the people.  We now measure all of these costs and  divide by the number of leads that come from the show. We actually developed very detailed matrix of all the  shows, how many leads we got, how many closed, and how it cost per lead.  This was a key measurement for the director of sales. He wanted to know where to spend his time and money. Now we have done what we  call closing the loop. Closing the loop is providing feedback on the effectiveness of sales  activities. By the way, getting people to report was one of the hardest parts of the project.

dms: How did management participate?

Brien Palmer: We had great management support, and I really have to credit the director of sales, Bill Thompson. We asked him specifically to be present at several key meetings, and I think that demonstrated his commitment. On one occasion, he suggested doing something one way, and it was different  from what the team had recommended. I asked him if he would consider taking the team's approach. He  paused for a moment and then said,  "Yes, let's try it that way first." That was a pivotal point, because he could have insisted on his own approach.

dms: What was your own role in the project?

Brien Palmer: I was actually pretty heavily involved. I served as the team facilitator and the project manager or coordinator. I maintained the schedules and provided the team with just-in-time training in the quality techniques.

dms: What did you learn from this project?

Brien Palmer: The most striking thing to me was that marketing and sales is a sys tem within the business, and you can improve the system with the same tools that you use in other areas of the business. Quality is contributing profoundly to the marketing performance objectives, and I am really excited about that.

dms: Thank you for taking time to share your story with the readers of the Sales and Marketing Corner. Brien Palmer's story is a great example of how quality professionals can help an organization achieve its sales and marketing objectives. Brien is a quality professional who had  no significant sales or marketing experience. He got management support and used traditional quality improvement techniques including teams, just-in-time training, process management and benchmarking. He and his team established baseline measurements, developed new processes, pilot tested and implemented them, and then measured the results.

Congratulations to Brien and the team at Respironics.

This column is edited by Dan Stowell.   He is a consultant with D. M. Stowell & Company and author of the book, Sales, Marketing, and Continuous Improvement. To submit questions for the advisor y board or provide comments or ideas for future columns, call him at 203-264-4606 or send him an E-mail at GBCC61A@PRODIGY.COM. He is also the direct source of reprints of the nine article series on Quality in Sales.

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