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Every sales process faces bottlenecks. Existing systems (or people) slow down the process and introduce errors, create unnecessary extra work, and bring down efficiency overall. Bottlenecks cause disruption wherever they occur (e.g. the sales pipeline, customers' buying processes, internal operations), and negatively impact the bottom line.
Identifying these existing bottlenecks and creating solutions to prevent them can decrease stress levels, increase revenue, and improve quality and productivity.
You probably already know what some of the bottlenecks are in your renewals business. Maybe they are outdated manual processes like pricing or product data verifications, or emailed requests to review and approve re-quotes that must be sent up and down the channel. There are likely even more hold-ups in your renewals process, and the key to removing them and making your renewals more efficient and effective is to figure out what they are in the first place.
There are two different types of bottlenecks that affect renewals teams: short-term and long-term. Short-term bottlenecks often will resolve themselves if you can hold out long enough � they are caused when a team member is out on vacation or leave, or when a system unexpectedly goes down. When the employee returns or IT gets the system back up and running, everything returns to normal.
The more critical bottlenecks to address are the long-term ones, which occur all the time and in every kind of company. They are caused by tasks that take up more time than they are worth, activities that slow down an employee's working pace, tasks that cause work to backlog, things that negatively impact the time to respond to a customer, and anything that slows down the sales process in general.
Research shows that 35-50% of sales go to the vendor that responds first. (Source: InsideSales.com)
There are three primary strategies to identify bottlenecks.
What process is the most frustrating for you or your team? Does something make you feel like you could be so much more effective if only you didn't have to do ___________ first?
Questions to ask yourself include:
Brainstorm among your renewals team to find out what the biggest causes of stress are, and you will likely identify several major bottlenecks.
Have a specific process that you know is causing a bottleneck, but not sure what the problem is? One way to start is to map out every step in the process. No piece is too small. Write it all down, make it visual, and attach timelines to it. Where is progress slowing down?
We're borrowing this approach from Sakichi Toyoda of Toyota Motors. It's a pretty self-explanatory tool for identifying a root cause. Start by naming the problem that you want to address. For example, maybe a re-quote takes two weeks on average to process through the channel and respond to the customer. That's a huge problem. To determine what is causing the problem, work backward and ask "why."
Our next post will address how to fix bottlenecks once you've identified them. While you're waiting to read part 2 on this topic, download our most recent eBook, "Shockingly Easy and Successful Renewal Quoting."
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