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Applying Kanban to Sales

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You might not realize it, but there are many parallels between Kanban and Sales. In particular, what we call “Upstream Kanban” is really what Sales are all about. In fact, a really disciplined sales process will usually turn out to be quite a mature kanban implementation. In this post, I’ll examine the similarities and look at how Kanban can help you with your sales process. 

Options / Opportunities / Leads

In Kanban we talk about having different options – we don’t necessarily commit to everything straight away. This is a similar notion to Leads and Opportunities. Often in sales, we’ll hear about a lead, but not all of them will be converted to opportunities and even a few will be converted to contracts/wins. This is very much similar to the way options work in upstream kanban – we select options that we’d like to explore and spend a certain amount of time on that exploration to see if we want to invest further in them. In sales, we want to get the best benefit from the limited time that our sales team has, so we’ll weed out all of those leads that don’t seem very likely to pull through to opportunities and conversions. Essentially, we discard those leads. Once we’ve got some solid opportunities, we then start to follow these up with the customer. Often as part of this, there are numerous conversations to help clarify the needs of the customer. This will often shape the nature of the delivery engagement, but it might also identify additional leads or opportunities. As part of this process, we may find that this opportunity is not something that is likely to close in which case we’d also close it. In some cases, there may be competition for the sale and we might find that we lost to a competitor. In Kanban terms, both situations are discards but we want to capture the reasons why for later analysis.

Visualise

We’re seeing more and more sales tools start to visualize their workflow using kanban boards. Here are some examples of Salesforce and Hubspot.

Compare that to an example kanban board with an upstream component:

As you can see from both, at various steps along the way, we might discard certain options – for example in “Qualification” or “Needs analysis” in the above Salesforce example, we might find that we’ll close out opportunities. This is similar to the “Risk assessment” in the below Kanban board. Also, the “Closed Won” above is the equivalent of our “Ready” column in the kanban example – our sales team has completed the work and it’s ready for our delivery team to take over. 

Note also that there are counts at the top of each – in upstream kanban, we have minimum and maximum WIP limits to make sure that we have enough opportunities in our pipeline, but not too much to cause the sales team to thrash and miss closing items. We may also want to filter the board or build swimlanes for certain customers that might be a large or higher priority. There are many other parts to these visualizations that can help you manage your sales funnel. 

Another aspect of the visualization is that it gives transparency to the rest of the organization. We can see what is still pending and which opportunities have closed which gives more information to managers and leaders. It also shows the delivery arm of the organization what is potentially coming and needs to be prepared for. 

Managing Flow

Different types / workflows

Often in sales, there may be different types of items that we’re selling. Also, we might be selling to existing customers or new customers. All of these kinds of things may indicate a different workflow that options will travel through. For small items for an existing customer, they’ll often travel through the sales process with little friction because relationships and expectations are already set up around the nature of the product/service at hand. 

For other types, eg new clients / large deals, there may be a larger or more lengthy sales process that is involved. For example, there may be a tender process or there might be a number of people within the organization that you have to discuss the sale with. Some companies have long approval chains and this can also take time and some follow-up from the sales staff. In Kanban terms, these items move through the upstream with greater “friction”. It’s useful to be able to understand these types as we can get a better understanding of how rapidly things move through the funnel and how likely their conversion rate is. 

Often for these larger and more complex opportunities, there are different policies that go with it. Sometimes “sales teams” are formed around a particular opportunity and the CRM tool may be utilized further to capture additional information about the customer such as key decision-makers, advocates/detractors, etc. This all aids in ensuring that the flow of these opportunities is as rapid and smooth as possible – in kanban terms, we want to avoid blockers and minimize the lead time through the funnel. 

Here is an example board with two swimlanes for different types of options:

Actions for leaders

The board will trigger a number of actions for sales managers and other leaders. Looking at the board they can quickly ascertain which opportunities may be blocked or need additional help. In more mature organizations, managers can also help manage the flow through sales by ensuring what in Kanban we call “Labour pool liquidity”. That is, they can pair/assign senior sales staff to help out junior sales staff and provide additional training to make sure that overall the sales team has an ongoing, well-distributed base of common skills so that bottlenecks don’t form in the process. 

Sales managers can also use the tools to help them do better forecasting of how long opportunities take to flow through the pipeline. They can use this to help manage how they allocate the sales team as well as inform the downstream delivery groups of when and if opportunities are likely to be converted to deals. 

Downstream capacity

Overselling can be a problem for long-term customer satisfaction. Imagine if you were a customer and were buying a product, only to find that it will take 9 months to manufacture because of the supplier’s backlog when you need the item in two months. This can negatively impact the reputation and brand of the business and impact future sales. Making sure that the sales team is aware of the downstream capacity is really important when selling so that they can set up the right expectations with the customer around how / when the sold item will be delivered. 

Conversely, we don’t want our downstream teams to be sitting idle because it will cost the business a lot of money. Thus the sales team might need to ramp up their efforts if they see that delivery is under capacity. Therefore, the sales manager will really have to make sure that they are balancing the sales pipeline and adjusting as appropriate. In such a case, they may need to talk to marketing to help create more opportunities to feed into the sales pipeline. The sales manager is often playing the role of what we call in kanban the “Service Request Manager” – helping to manage the flow upstream and balance with downstream. 

Policies

The policies of any system define how the system works. These are equally important in sales and many sales teams start to make these really explicit and even embed them into their tooling to help their process. These can apply all the way across the sales cycle, but I’ve chosen to expand on a few as they also have important kanban concepts behind them. 

Option select / discards

There may be certain rules around which opportunities to explore and which to discard. Sometimes, we might favor a strategic customer over a tactical one and discard the tactical opportunities to focus on the strategic item. Sometimes, we have enough of a particular opportunity currently in play and may need to discard some of the many options because we simply can’t service them all. Some leads might be too small and we’re better served by focusing our limited time on the larger ones. It’s also often easier to sell to an existing customer, so we might favor these over new customers. 

This is where your sales can be closely linked to your overall corporate strategy. For example, we may wish to target a specific market or customer persona. In which case we may discard leads that don’t conform to those targets and keep our focus on the strategic goals. This might impact other policies as well – we may add more sales reps (capacity) to those target markets. In Kanban terms, these may appear as specific swimlanes on the board and it may also involve putting some WiP limits in place to ensure we have the right balance between those goals. 

There can be all sorts of different policies at play when determining which opportunities to follow and which to discard. Each organization and sales team are going to have different policies – what is important is, like with any policy, that they are clear to the team so they can be followed. Once you set up the “rules of the game” you can let your sales reps get on with “playing the game”. 

WiP Limits

These are also very important because we want to make sure that the sales team always has the right focus. As with upstream kanban, we may need to have minimums and maximums to make sure we’re working through the leads in the most effective way. Often we may set these in sales as targets/quotas/goals and we may do it for the overall sales team or per sales rep. This ensures that we have the “minimum” moving through the pipeline to keep our delivery teams moving effectively. We may also need those maximum’s because we don’t want our sales reps to be thinly spread and not closing deals rapidly enough. 

The shape of the funnel can also inform sales managers of potential actions. Similar to using WiP limits in kanban, sometimes the funnel might get too thin, which means that this will likely lead to starvation downstream. This can trigger additional actions such as working with marketing on new campaigns to drum up new leads to add to the funnel. 

Feedback loops

The key kanban feedback loops of the board, the data, and the cadences often come into play in sales. As per the section on visualization above, we can very quickly see what opportunities are in the pipeline, who the customers are and how big the potential deals will be. The funnel really is a major indicator of the performance of the sales teams and can lead to a number of management actions to course correct. 

We often use this in conjunction with data to help us make decisions. For example, some of the modern sales tools will give us an understanding of the lead times through the pipeline for each type of sale. If we also track our discard rates we can start to forecast when and how much will get through the pipeline. Sales managers will often use a number of data points to help them understand how their sales team is performing and what they need to do to improve that performance. 

There may also be cadences where this happens – for example, a sales team may have a retrospective over recent wins and losses to understand how the successful items get through their flow. This will often result in updates to policies around which opportunities to explore or discard. Sales managers will often also do the equivalent of a flow review with the data and this might include key business owners/stakeholders to make sure that they’re hitting the mark. Through this, they can look at the effectiveness of their current strategies, bottlenecks in the flow, and sales department capabilities to make sure that the sales team is providing a “fit for purpose” service for the rest of the business. There may also be additional reviews with other teams such as marketing, support, downstream service provision in the spirit of a kanban “Operations Review” to make sure all of the groups are working together to the greatest effect. 

Conclusion

Upstream kanban has many similarities with running a sales team – indeed, you might say that a sales team is a really great example of how an upstream system works. Like any kanban system, you only get out of it what you put into it, so I’d encourage any sales staff and managers to critically think about how their system is put together and make sure that you have the right feedback loops to get the best bang for your buck. For those interested in learning more about Upstream Kanban, please check out my Kanban Systems Improvement course for more information. 

About the Author- Daniel Ploeg

Daniel is the first Australian to become an Accredited Kanban Consultant (AKC) and Accredited Kanban Trainer (AKT). As such, he is passionate about helping teams become “Fit for Purpose” using Kanban to help them. Helping the teams unburden themselves from being overloaded with work as well as helping managers make better commitments and expectations is part of what he does. You will see Daniel at conferences and meetups talking about how Kanban can help you. You can find more articles by Daniel on his blog page or find more information about Evogility here.

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