There has been much discussion and significant practical application of the Theory of Constraints (also referred to as Constraints Management) in the past two decades. The methodology has been applied or suggested in just about every business function imaginable — except one, Sales. The Sales function is integral to every business and yet only a few intrepid souls have ventured to propose improvements to this key function. Rather than avoid or overlook the issue, let’s take a brief, but systematic overview of sales and its constraints.
In the traditional sales process, the only resource is the salesperson. The capacity of this person is the key to enhancing sales.
The time and activities of the salesperson can be broken down into six (6) major categories:
1. Project management (managing the delivery of sales orders already accepted);
2. Customer service (entering and processing repeat transactions);
3. Clerical tasks (data entry, literature distribution, managing appointment calendars, sales activities recording);
4. Social Activities (appointments with customers or potential customers of a social nature);
5. Prospecting (identifying potential sales opportunities); and
6. Business development (appointments with customers or potential customers).
Of these activities, the most important use of a salesperson’s time is Business Development. This is when a salesperson meets with a customer and secures an order for products or services. It is this activity that produces the most benefit and profit. The second most important activity is prospecting. Prospecting is the search for, and identification of, new customers and setting appointments with them.
If you accept this premise of the two most important sales activities, then the best use of a salesperson’s time is on the two important tasks. Any time spent on the other four activities just reduces the time available for these two key tasks.
In application of the Theory of Constraints there are five steps:
1. Identify the constraint
2. Determine how to exploit the constraint
3. Subordinate everything to the constraint
4. Elevate the constraint
5. If the constraint shifts, go back to step 1
If business development is the most important sales task, offloading other less valuable tasks to someone else frees the salesperson to employ more time on this activity. In many companies, each salesperson is assigned a clerical assistant whose job is to support the salesperson by performing routine lower level tasks. This assistant sends out sales literature; enters new sales orders; keeps track of existing orders and reports on their progress or delays; and in many cases calls to set appointments for the salesperson. This arrangement satisfies the second and third steps in the TOC application. The fourth step comes from measuring and compensating the sales team on the two important tasks of the sales function.
If this application of TOC or Constraints Management to the sales function makes logical sense, then why is it that so few companies or sales managers consider this approach? Perhaps it would be advisable to reflect on the potential merits.
You must log in to post a comment.