In order to succeed in today’s increasingly competitive market, companies have had to become more lean. This is achieved by removing waste and focusing on continuous improvements of internal business processes to reduce costs, improve quality and increase customer satisfaction. In this article, we will discuss the application of lean in a sales process at a fast-growing full-service digital advertising agency. However, the findings and lean solutions described here, could be applied to any sales process in any industry.

Digital advertising is the activity of delivering promotional content to audiences through online and digital channels, such as social media, email, search engines, mobile apps etc. The agency in question, recently repositioned itself as a leader in the design of custom applications, which resulted in increased sales and profits. Notwithstanding, along with the increased profitability, came many other challenges including missed deadlines, over-budget projects, issues and errors. This ultimately led to poor quality in the end digital product to the customer. The goals of this lean project, were to improve efficiency and reduce cycle time of the sales process and lower the cost per proposal. Primarily, to prime the company for future advancement and growth.

Sales process wastes

Value stream mapping workshops were conducted to map out the current sales process at the agency, to understand the existing process, identify non-value added activities and calculate the process time and overall lead time. The results of this workshop showed that the sales process was a highly complex variable process, with a unique and custom approach to each project. The total sales process time was 25 days long with the proposal process taking up the majority (72%) of the time. This included gathering project information, teams and requirements and drafting and reviewing proposals. All of this upfront work was conducted prior to any sold contract agreements, indeed, only half of these proposals (49%) resulted in sales. Further investigations showed that there was no standardized approach or procedures for proposal drafting and no target cycle times for completion of the proposals. A second step in the assessment was analysis of cost drivers in the sales process. Pareto analysis revealed that lost deals and late invoicing/payments accounted for the majority of the drivers of costs and delays to the sales process. 

Streamlining the proposal process

The focus of the lean project was on streamlining the proposal process since this took up the majority of the overall process. In this project, an electronic proposal management and signature system through Nusii was introduced. This platform reduced the proposal cycle time by 50%, reduced the effort involved in the sales process and reduced the cost per proposal. Nusii enabled digital proposal management with a notification system, proposal tracking and online signing. Another time saving of this system was that proposal templates could be re-used for different clients, instead of customizing proposals for each client. Errors were reduced as customers were unable to edit the file and customer satisfaction increased due to the simplistic user-friendly interface and ease to reject or accept proposals.

Customer Qualification

Lost deals were analyzed further and broken down by qualified and unqualified leads. The majority of deals that were lost by unqualified leads was due to the price. The solution was to develop a customer qualification process for screening out unqualified leads to save time and money. A survey tool was developed that prospective customers must fill out prior to any work being conducted. The survey determined the clients needs, budget and timeframe prior to any work commencing. For example, customers needed to have a minimum or starting budget ranging from $5,000-$10,000. Additionally, information on pricing and the process were added to the company website.

Leaning out the invoicing process

The invoicing problems were documented on an A3 report. Analysis of the financial data revealed that the majority (80%) of invoices were sent out upwards of ~50 days late and payments were another 35 days late. Late invoicing and late payments were causing major cash-flow problems at the business. Through the A3 tool, the team were able to map out and streamline the invoicing process and reduce the cycle time for invoicing. Solutions included removal of external approval of invoices, greater ownership on the product owner on their clients invoices and to ensure that the invoices were correct and the electronic transmittal of invoices to eliminate faxing issues.

This article outlines how a lean approach was adopted to reduce the cycle time and improve the quality of a sales process, if you would like more information please contact us and we will help you improve your processes.