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Litmus Test

WEDNESDAY, JULY 30TH, 2008
Last blog I mentioned one of my clients who is in the business of selling copiers. He’s struggled for a long time with his sales process and has been continually refining it to get it down to a system he can depend on. He’s done several things in this area including developing a recruiting and hiring process to spot better performers, and purchasing a sales software program so he can closely monitor his staff and provide them with reminders to ensure follow up is being conducted. Performance has always been the bottom line and if you know anything about business to business sales it can be a wild roller coaster unless your people are following a regimented routine to each day work on getting new customers. 
 
What Terry, my client, has done is to develop a required sales forecast the salespeople must complete at the beginning of the month. In it they are to include those customers they expect to convert this month. The requirement is to achieve 90% closure on the dollar volume they list. The intention is for the company to be all but assured that this forecast is accurate and they can take it to the bank anticipating they can cover this for the month. 
 
In order for any of the customers to make the list of sales conversions on the forecast Terry requires them to answer a series of questions, what he calls his litmus test, to make sure the sales person has accurately assessed the client’s intentions, and is assured they will do business with his company.  As he stated, he wants to make sure he can write on check on their forecast.  The salesperson and the sales manager both need to sign off on this litmus test, assuring that not only is the salesperson committed but so too is the sales manager, who ultimately is responsible for sales production for the month.
 
Here are some of the questions on Terry’s litmus test:
 
  1. Is the client fully aware and understands decision making process?
  2. Has the rep delivered our company’s USP [value proposition]?
  3. Does the customer have compelling reason to buy?
  4. Has the rep conducted a Needs Assessment/purchase decision survey?  
  5. Has the client engaged in an initial meeting to determine and understand their needs and recommendations for equipment?
  6. Has the client been delivered a proposal?
  7. Does the customer have compelling reason to buy from us/rep?(tell me what they would say in their words why they would do business with them)
  8. Has the rep identified the customer’s decision making process? (how will decision be made)
  9. Have we obtained a verbal commitment to buy from the customer?
  10. Is the decision maker available? [Can he/she be reached for a decision?]
  11. Has the customer’s credit been approved?
  12. Is a delivery date confirm and is the equipment available [in inventory] to be delivered? 
While many of us are constantly looking for ways to improve our business and get our people to perform better very few of us are willing to put in the effort it requires to demand accountability and responsibility from our people.   I salute Terry for his diligence in developing this system. As has been mentioned here previously, running a business is very similar to parenting. You need a few set of rules, you need to follow those rules and then repeat yourself a lot. 
 
Frequently the trouble with us as parents and business owners is our own discipline. We lack the discipline to follow up and make sure the rules are being followed, let alone setting rules that will assure we get the results we want. Where in your business would a litmus test like Terry developed help your business perform better? Just remember that as important as the litmus test is to develop, the routine of making sure it is followed is critical to achieving the outcome you want. That falls back on your accountability and follow-through. Do you have the leadership skills to be responsible for achieving the outcome you desire?

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