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Total Quality Selling

    Total quality selling provides an accurate
    assessment of both the internal environment
    and the interactions between
    customer and salesperson.

    In the past, companies enthusiastically applauded their salespeople for getting the big order. Today, as a growing number of sales executives are asking for additional measurement criteria other than traditional sales numbers, the applause is still there, but the enthusiasm is starting to wane.

    One president of a technology-based company wonders, are my sales a result of my salespeople, or do the products’ attributes drive sales? Another executive wonders if the growing trend among manufacturers to dramatically reduce their supplier base will affect his company. For example, Ford Motor Co. has reduced its supplier base by 90 percent.

    To answer these puzzling questions, companies are using customer-satisfaction levels as measurements of successful sales. Such an approach runs counter to the traditional sales credo-“Do whatever it takes to get the order”-but the practice of measuring the quality of the customer-salesperson relationship is gaining momentum. While traditional sales metrics focus on lagging indicators such as revenues, percentage of business from new products and business gained from new accounts, the leading indicators, such as the customer’s assessment of a salesperson’s behavior, will predict future buying patterns.

    Customer feedback

    Total quality selling provides an accurate assessment of both the internal environment and the interactions between customer and salesperson. The heart of this approach is using customer feedback, in the form of surveys, to drive continuous improvement toward surpassing customer expectations.

    Feedback from customer surveys gives managers and salespeople direction regarding future improvement areas. By looking at both individual and group feedback, top management can decide whether to use individual coaching or group training.

    In order to align all organizational elements, from reward systems to current metrics, so that financial results improve from both existing and new customer feedback, implement total quality selling in four phases (shown in Figure 1).

     Cultural assessment
     Business assessment
     High-performance model development
     Return on quality through customer feedback

    Each phase must be completed in chronological order. To assess whether a sales culture is ready for total quality selling, more than 40 percent of the time should be spent in phases one and two. These first two phases assess cultural elements and align them with the drive for continuous improvement and with the customer environment.

    Cultural and business assessment

    The cultural assessment aims to identify the culture type and the feasibility of proceeding to phases three and four. By understanding two key areas-the use of current quality systems and the performance-improvement climate-management can diagnose the culture. If the actual and desired cultures are different, they can recommend the appropriate interventions.

    Performance improvement is a key area in the cultural assessment. If salespeople cannot assess their managers’ coaching ability positively, then coaching salespeople to close their own performance gaps in phase four will be futile. The adage “If you want your salespeople to improve, the managers must improve first” applies to this total quality selling model.

    An organization’s quality systems is another key assessment area. Quality systems include performance management, performance appraisals, hiring and orientation of new employees, and using management scorecards for financial tracking and reward systems. The reward system in a sales culture usually receives the least attention, yet it sets the quality climate and reinforces desired behaviors. Evaluate whether to use both formal and informal rewards to align with strategies and continuous improvement.

    Integrate into the informal cultural assessment interviews with key executives from other departments that influence financial results or cause inefficiencies. For instance, if manufacturing ships defective products, no matter how high the quality of the customer-salesperson interaction, sales will decline.

    Cultural model types

    After assessing the quality systems and performance-improvement climate, diagnose the culture according to one of four cultural model types based on the alignment of these two factors. Of the four culture types shown in Figure 2, the desired sales culture is the integrative culture.

     Integrative. Integrative cultures not only focus on numbers and goals, but on the ways the systems align with strategies and each other. These solid cultures facilitate their salespeople’s ability to determine business priorities, their shareholders and the customers. Performance is predictable and improves steadily.

    The internal environment is strongest within the integrative culture. Because systems are strong and performance-improvement incentives are high, salespeople find it easy to understand the organization’s values. They are working and living within a quality work environment that promotes personal empowerment.

     Procedural. In this type of culture, following polices and procedures becomes the most important order of the day. Once executives see the benefits of bringing established procedures to manufacturing, the sales department becomes the next domain in which all activities must be documented. Often, micro-management is practiced in these cultures, where completing tasks becomes a priority.

     Survival. Survival cultures are more typical of small companies. Cash flow is all that matters. Usually, there are no systems or sales goals. Ask the president for a sales forecast, and you’ll receive a verbal forecast. These companies may be profitable, but they limp along year to year without developing their full potential.

     Goal-Oriented. Most sales organizations are goal-oriented cultures. The demand is constant for attaining sales forecasts. Once one quarter’s performance is completed and acceptable, and everyone is about to breathe a deep sigh of relief, the refrain that’s heard is: “Don’t tell me what you did for me yesterday, tell me what you will do tomorrow.” Ultimately, the urgency of booking business for the next quarter resumes.

    Usually, such cultures employ a variety of systems, but those systems don’t align with each other or with the organization’s strategies. Without such alignment, inefficiencies result from the wrong metrics recognized in an outdated reward system.

    Proceeding from the culture diagnosis

    When diagnosing an organization’s culture, biases are best left behind. The assessment must focus on questions that identify the reason for the existing quality-systems and performance-improvement practices. Such reasons will indicate the forces that resist change.

    Should the diagnosis reveal opportunities for the organization to transition to an integrative culture, appropriate intervention is recommended. For instance, if the sales-force ratings unanimously state that management doesn’t provide accurate feedback on salespeople’s behavior, a coaching and feedback workshop for management could help. If ratings show that only one manager needs improvement in this area, a one-on-one coaching opportunity is more appropriate. Whether with individuals or within groups, performance gaps must be closed.

    With action plans and a timeline for closing performance gaps, do an abbreviated post-assessment two to three months after the initial assessment. The post-assessment solicits salespeople’s observations to measure changed behaviors. This closes the feedback loop, and management leads change by its own good example.

    While performing the informal cultural assessment, do a brief business assessment. This assessment identifies the environmental factors driving revenues (such as technology, economics and government). Understanding the influence of these factors answers the question: What else can impact financial results besides improvement within the sales force?

    Aligning the quality systems with the organization’s strategies was mentioned earlier. In most companies, as strategies change, the same quality systems remain in place. The strategic sales plan serves as a reference point for adapting quality systems.

    Additional information from the business assessment includes understanding customers’ motivations to buy, revealing the organizational strategies and operational tactics used. This information will be used in the high-performance development model in phase three.

    High-performance model development

    Phase three identifies the exemplary sales behaviors that will both exceed customer expectations and give a competitive advantage. In this phase, it is important to avoid prejudices based on the actions of top sales performers in other organizations.

    There are popular selling models that show salespeople how to master a best practice, such as asking technical questions until specific financial needs are identified. It is tempting to use these models as part of developing the high-performance model. But this temptation can be a dangerous trap.

    How does an organization pinpoint the right best practices? First, collect baseline information from sales management and top salespeople. In getting at their best practices, it will be tempting to listen to what should happen in hypothetical situations. But, by identifying real sales situations and asking top salespeople what they do, exemplary behaviors can be recorded more effectively.

    To get consensus from sales management on the best practices could be tricky because each manager is very different. Using taped interviews of three to four customers during fact-gathering stages provides direction and guides consensus. These fact-based customer interviews will balance managers’ instincts and help create a formidable best-practice list.

    After listing and ranking the best practices, survey a random sample of at least 50 customers. Ask customers to rank the listed best practices and include the frequency that the competition and the organization’s salespeople use them. This provides valuable information on the use of best practices compared to the competition. More important, the survey results sort out the “keeper” best practices from the “discards.” Phase three’s keepers are used to develop phase four.

    Return on quality by customer feedback

    Phase four requires customers to complete a survey that rates each salesperson according to the best practices. This feedback drives professional and financial performance. In the survey, customers are asked to assess a salesperson’s best practices on a five-point scale, ranging from “much better than expected” (5) to “much worse than expected” (1). Send the survey to customers at a time predetermined by senior management and the consultant. Don’t tell salespeople or sales managers when the survey will come out. This prevents the “halo effect” commonly seen prior to a performance appraisal-an occurrence where a salesperson’s behavior improves dramatically one to two months before a performance evaluation.

    Selection criteria for surveyed customers must be linked to the program’s goal to show a return on quality. The best customers to survey are those who interact with the salesperson at least four times a year. Collect a minimum of 10 survey responses. When selecting a customer, financial impact can be shown, provided the customer’s buying behavior is not based solely on:

     Product attributes being more important than quality of sales interaction
     Word of mouth from an influential third party
     Selecting the lowest-price vendor

    For a clean correlation to financial impact, these variables must be minimal relative to the quality of sales interaction.

    The heart of total quality selling is identifying where the salesperson is rated less than “much better than expected.” Meeting expectations are the initial objectives of a quality program, so merely meeting customers’ expectations isn’t enough. Customers who are “highly satisfied” are six times more likely to repurchase from a company than customers who are just “satisfied.” The only truly loyal customers are totally satisfied customers.

    Process the customer-feedback surveys quickly and thoroughly. If the surveys indicate that most salespeople need to improve in common areas, group training is called for. Should the responses be dissimilar, establish individual coaching opportunities between manager and salesperson. Whatever method you use to close performance gaps, be sure to create action plans with timelines.

    For individual salespeople, a performance management system can help improve targeted areas. The system gives the manager and salesperson an opportunity to interact on a monthly basis to monitor progress regarding two types of goals: economic and value-based.

    Value-based goals link to what is most important to the organization. Many organizations regard quality as a value. If a salesperson needs improvement in a best practice, a value-based goal is established within the framework of the performance management system on how the best practice will be rated by the customer.

    The use of performance management systems has been reviewed by various organizations. In a 1994 study of 437 companies by Hewitt Associates, many of them, of all sizes, reported that they use a performance management program. When their financial performance was compared with companies that didn’t use performance management systems, Hewitt found in almost all cases that “companies with performance management have higher profits, better cash flow [and] stronger stock value than companies without performance management.”

    Setting value-based goals is a major departure from traditional management-by-objectives and goal-setting programs. By accomplishing value-based goals, key economic goals and strategies are realized more quickly and effectively. Most important, the organization will observe a financial return on its quality efforts. One high-tech manufacturer of storage devices realized an annual $3 million increase in sales from its quality-sales initiatives.

    Economic goals are the minimum standards for the organization to hit its financial targets. As an example of a minimum standard, most organizations’ sales forces must prospect for new business. Striving to maintain the minimum number of prospects to attain financial targets could be an economic goal.

    Performance management systems should be used as an ongoing developmental tool. After salespeople accept value-based goal setting and show signs of improvement that both they and their managers observe, make plans to repeat the survey. This repeat assessment is a key step to closing performance gaps.

    Total quality selling represents a change in the way to manage the sales profession. One executive calls this approach “reinventing the sales process.” Most executives of truly quality-driven companies are excited about the increased accountability of their own and their salespeople’s actions. By adding customer metrics into flexible sales cultures, organizations will be using a leading indicator to future financial growth.