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Profit or Client Satisfaction? Go for both!

Posted by: Stelica Gheorghita
Category: Business Consulting

The Schism between Sales and Delivery

Different business objectives will drive different results. While your sales division will focus on Orders Booked, Revenue and Net Sales, Profit Margin and Market Share, the Delivery and Operations is tangled in sorting out the challenges generated by unclear requirements, gaps in client expectations and scope creeping.

Seldom are the internal goals aligned into a comprehensive, end-to-end view, on how the Quality of Delivery will drive Client Satisfaction and how Client Satisfaction will ensure higher Profit Margin for future business with that particular client – because it is true isn’t it: There is no business like Re-business!


Reconciliation is a top-bottom affair

There are 2 must-have qualities that a board of directors, a business unit manager or even a product owner/product manager need to possess: Responsibility and Accountability.

As Stephen Covey defined it in his book: 7 Habits of Highly Effective People, Responsibility represents the Ability to Respond – Diving a bit deeper in this concept we can articulate a theory that any of the above mentioned decision makers must be able to Respond with a clear and concise strategy to mitigate the Split between Sales focus on Profits and Revenues and the Operational never-ending and binding commitment to ensure and maintain Client Satisfaction.

Accountability should be clear at this stage: The decision makers believe so much in this strategy and they are so focused on Plan A that they don’t even need a Plan B. Assuming ownership of this strategy and its results, communicates top-bottom in the organization the engagement and the ability to respond and close the gap between Sales and Delivery/Operations.

 

Closing the Gap between Sales and Delivery

1. Get your Sales Team to own the results of the Delivery

The Sales Teams are designed and dimension with the clear purpose of identifying, qualifying and winning sales opportunities for the organization.

After they’ve closed one deal the Sales are going away to focus on the next deal. This generates a gap and in the overall client-vendor peer to peer relation-ship which majority of business blueprints mitigates by having in place a client business escalation process.

The shortcoming of this is the fact that Escalations are Re-active storms that happen after the deed is done. At this stage the initial desired Profit Margin is secured but the Client Satisfaction is damaged which generates a chain reaction affecting future Profit Margins with that client.

Keep the Sales in the loop and have them present monthly or quarterly Delivery Status Progress at a Business level and using a business slang (no deep dive into the nitty-gritty) – this we’ll ensure that their peers on the customer side have a pro-active view and in case there will be storms (and there will be expecting them as this is the way of things) – they’ll know about them and they’ll be more supportive and accommodating – a clear behavior of a Satisfied Client.

2. Reward (in cash) the add-on sales and cross sales generated by the Delivery Teams

Money is never a permanent motivator, but it can be a huge tool to demotivate – especially when financial bonuses are not in place for an individual that went the extra-mile and generated Sales from a Delivery position.

Design, communicate clearly and put in place a concise financial rewarding scheme for all the client-facing individuals that work in your Delivery and Operations Teams and the your Client Engagement metrics will bloom right away. The Sales will receive more Leads and more qualified Opportunities than never.

This mechanism is perceived by each and every individual like a proof of cherish by the organization. He/She will feel valued and appreciated, this will drive loyalty and engagement which will generate Client Focus and constant effort to exceed expectations which results in higher Client Satisfaction and more Sales.

3.Dash-boarding is king!

There is no story like the story told by the figures.

Design and implement Metrics to measure how high Client Satisfaction is achieved and how this generates higher Profit Margin.

Also measure and report the benefits of having the Sales involved (at the Governance Level) in the end-to-end business life-cycle – it’s their client also and they should be present and engaged all the way!

For Delivery Teams implement Metrics like:

  • Number of Leads by the Delivery Teams
  • Total Net Sales from the Leads Generated by the Delivery Teams
  • Number of Sales Meeting attended by Delivery representatives (to support the Sales Teams)

For Sales Teams Measure things like:

  • Number of Business Status Reports sent by Sales to the Client
  • Number of Escalations in which the Sales Teams have been involved
  • Number of joint client-engagements with the Delivery Teams

4. Involve the Delivery in Pre-Sales

We’ve already established that the main reason for the gap between Sales and Delivery is constituted by their different Business Objectives.

But there is another area that generates the divergent focuses of the 2 divisions: The Pre-Sales.

In this phase the Sales is focused to put together a proposal that will ensure the deal is closed.

The Sales focuses more on the Proposal:

  • To be Functional – Relevant to the client’s need
  • To add Value (create market and business value for the client)
  • And to be Price competitive

What the Sales focuses less on the Proposal:

  • To be Successfully Delivered (in the end) – this means: Risks Planned and Managed, Realistic Timelines and Budgets and Available Internal Resources. We are not suggestion for the Sales to get involved actively in the fulfillment part of the proposal – but merely to retain a Governance role (as a stakeholder), rather than simply walking away completely.

This is where the Sales Team Accountability part comes in.

The best way to ensure that, what the Sales Team sales is what the Delivery Teams deliver, is to create an internal contract between the Sales-Product and Delivery teams at the Pre-Sales Phase.

The Proposal is basically signed off (internally) by all the parties involved and in this way the Delivery Teams commits to implement what the Proposal states and the Sales team has an incentive to remain and act like a checkpoint until the end of the Project/Deal.

5. Share the Spoils

With the Delivery Teams having to carry the weight of the Delivery with everything that this incurs: Scope Changing, constant pressure from managing dependencies etc. – it is frustrating for them in the end to see the Sales walking away with massive bonuses. Offering bonuses to all the teams which are tied to the overall company financial performance, will make the Delivery Teams feel involved and rewarded.

At SOEM, we are working closely with our clients, to Design and Implement internal business models in which:

  • Delivery Teams get rewarded additionally for the overall Yearly Revenue Performance of the Organization
  • An internal hand-shake agreement between Sales, Product and Delivery ensures Accountability and delivers Sustainable client-proposals
  • Metrics are put in place to monitor and measure the Client Satisfaction influence on the Profitability and the contribution of Delivery Teams in growing the business

and in this way the circle is closed, and the Profits are tied to the Client Satisfaction (and vice versa).