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Sales process engineering

Sales process engineering

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Encyclopedia
Sales process engineering has been described as “the systematic application of scientific and mathematical principles to achieve the practical goals of a particular sales process". Selden pointed out that in this context, sales referred to the output of a process involving a variety of functions across an organization, and not that of a “sales department” alone. Primary areas of application span functions including sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....

, marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

, and customer service
Customer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...

. Variations of this brief description are possible, but described as such, the discipline is consistent with other published definitions of engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

 and its many well-established branches, but relatively new in its focus.

Historical context


W. Edwards Deming
W. Edwards Deming
William Edwards Deming was an American statistician, professor, author, lecturer and consultant. He is perhaps best known for his work in Japan...

 alluded to sales, marketing and customer service processes in his famous “Production Viewed As a System” diagram, when he included the terms “Distribution,” “Consumers,” “Consumer research,” and “Design and redesign” in his flow chart (see http://www.dln.org.uk/images/image17.gif). However, Deming himself, and many other recent thought leaders in the field of quality and process improvement, such as Joseph Juran, Shigeo Shingo
Shigeo Shingo
, born in Saga City, Japan, was a Japanese industrial engineer who distinguished himself as one of the world’s leading experts on manufacturing practices and the Toyota Production System. Shingo is known far more in the West than in Japan, as a result of his meeting Norman Bodek, an American...

, Taiichi Ohno
Taiichi Ohno
was a prominent Japanese businessman. He is considered to be the father of the Toyota Production System, which became Lean Manufacturing in the U.S. He devised the seven wastes as part of this system. He wrote several books about the system, including Toyota Production System: Beyond Large-Scale...

, and Eliyahu Goldratt primarily focused on aspects related to production and logistics in the arena of manufacturing.

Factors spurring recent interest


Since the early 1990s, the primary emphasis of sales process engineering has been on applying relevant engineering tools to the design and improvement of sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....

, marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

 and customer service
Customer service
Customer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...

 processes. The upturn in interest in applying a more systematic approach to these areas was spurred by a number of factors, including:
  • advent of portable computing devices, laptop
    Laptop
    A laptop, also called a notebook, is a personal computer for mobile use. A laptop integrates most of the typical components of a desktop computer, including a display, a keyboard, a pointing device and speakers into a single unit...

     and personal computers in the 1990’s
  • development of software that enabled the creation, connection, and analysis of related databases (e.g., Customer relationship management
    Customer relationship management
    Customer relationship management is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing,...

    , Database marketing
    Database marketing
    Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes...

    )
  • the relatively large share of expenses consumed by sales, marketing and customer service functions as a proportion of many budgets
  • realization that a careful approach is required in order to get a return (financial or otherwise) on investments in automation
  • recognition that alternatives to automation exist, and that at that very least, a process can often benefit from improvement at little cost through policy, practice, or procedural changes, prior to the introduction of more expensive technology (see also, Lean management).

Selected challenges, tools, and goals


Applying a systematic approach to any field is challenging, perhaps especially so in a relatively new arena. These include the difficulty of agreeing on what and how to measure, where to set performance standards, variations due to customer expectation, the relative “intangibility” of services, and so on. In spite of the difficulties, a growing number of published examples illustrate how to apply many traditional engineering tools to the sales process, including the application of process mapping, simulation, design of experiments, statistical process control, the analysis/reduction of constraints, inventive problem solving, and, given the central importance of human behavior, applied behavior analysis, among others. Each of these tools is connected with well-known engineering goals, including cause-effect analysis, variability reduction, waste reduction, bottleneck reduction, and the theory of inventive problem solving; the literature frequently cites an overarching goal of improving customer satisfaction.

Resources for underlying observational data


One of the difficulties faced by researchers and practitioners in any field is a lack of facts; in competitive arenas, important facts are often deliberately hidden or obscured for reasons of confidentiality. This reality can also retard advancement. In spite of this, a number of “fact books” exist that offer a wealth of basic information germane to sales process engineering, usually specific to a particular form of medium or industry, some of which are available online. Examples include information pertaining to:
  • direct marketing (e.g., Direct Marketing Association’s Statistical Fact Book)
  • radio advertising (e.g., Radio Advertising Bureau's Radio Marketing Guide and Fact Book) (http://www.rab.com/public/mediafacts/2007RMGFB-150.pdf)
  • life insurance (e.g., ACLI’s Fact Book) (http://www.acli.com/ACLI/Tools/Industry+Facts/Life+Insurers+Fact+Book/GR08-108.htm)
  • US agriculture (e.g., USDA's Agriculture Fact Book) (http://www.usda.gov/factbook/)

and government-sponsored statistical abstracts (e.g., Statistical Abstract of the United States) (http://www.census.gov/compendia/statab/).

Examples of application


Another difficulty faced by engineers and students in any field is the difficulty of finding examples of how to apply the principles involved. In the case of sales process engineering, a number of books and articles have been written on various facets pertaining to the subject, including:
  • application of experimental design in marketing
  • application of statistical process control to sales figures
  • application of theory of constraints to the quotation-order-delivery cycle.

Future directions


Future directions for sales process engineering include broadening the available pool of underlying observational data, publishing further application of the principles, and advancing educational efforts to expand and teach the relevant body of knowledge.

The label “sales process engineering” is not trademarked or copyrighted. Except that of the discipline of engineering itself, the term connotes no bias toward one philosophy/school-of-thought or another. Therefore, one of the chief contributions of sales process engineering per se is that the very concept can provide those who must plan systems, implement projects, and maintain improvement, with an organized frame of reference based on techniques that have helped other, better-established, disciplines to progress.

Serious practitioners have begun to emphasize "three core principles" of sales process engineering in an effort to broaden the appeal of the discipline to a wider range of sales executives. These principles are: 1) Continuous improvement of the sales process is a fundamental necessity 2) Metrics are required to judge the rate and degree of improvement 3) A well-defined sales process is a pre-requisite for determining meaningful sales metrics.

See also


For further information, see:
  • applied behavior analysis
    Applied Behavior Analysis
    Applied behavior analysis is a science that involves using modern behavioral learning theory to modify behaviors. Behavior analysts reject the use of hypothetical constructs and focus on the observable relationship of behavior to the environment...

     and behavioral psychology
  • design of experiments
    Design of experiments
    In general usage, design of experiments or experimental design is the design of any information-gathering exercises where variation is present, whether under the full control of the experimenter or not. However, in statistics, these terms are usually used for controlled experiments...

  • Demand chain
    Demand chain
    -Concept:Analysing the firm's activities as a linked chain is a tried and tested way of revealing value creation opportunities. The business economist Michael Porter of Harvard Business School pioneered this value chain approach: "the value chain disaggregates the firm into its strategically...

  • industrial engineering
    Industrial engineering
    Industrial engineering is a branch of engineering dealing with the optimization of complex processes or systems. It is concerned with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials, analysis...

  • Sales management
    Sales management
    Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm's sales operations. It is an important business function as net sales through the sale of products and servicess and resulting profit drive most commercial...

  • process improvement
    Process improvement
    In organizational development , process improvement is a series of actions taken by a process owner to identify, analyze and improve existing business processes within an organization to meet new goals and objectives. These actions often follow a specific methodology or strategy to create...

  • simulation
    Simulation
    Simulation is the imitation of some real thing available, state of affairs, or process. The act of simulating something generally entails representing certain key characteristics or behaviours of a selected physical or abstract system....

  • six sigma
    Six Sigma
    Six Sigma is a business management strategy originally developed by Motorola, USA in 1986. , it is widely used in many sectors of industry.Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and...

  • statistical process control
    Statistical process control
    Statistical process control is the application of statistical methods to the monitoring and control of a process to ensure that it operates at its full potential to produce conforming product. Under SPC, a process behaves predictably to produce as much conforming product as possible with the least...

  • theory of constraints
    Theory of constraints
    The theory of constraints adopts the common idiom "A chain is no stronger than its weakest link" as a new management paradigm. This means that processes, organizations, etc., are vulnerable because the weakest person or part can always damage or break them or at least adversely affect the...

  • "TRIZ
    TRIZ
    TRIZ is "a problem-solving, analysis and forecasting tool derived from the study of patterns of invention in the global patent literature". It was developed by the Soviet inventor and science fiction author Genrich Altshuller and his colleagues, beginning in 1946...

    ," or theory of inventive problem solving
  • quality management
    Quality management
    The term Quality management has a specific meaning within many business sectors. This specific definition, which does not aim to assure 'good quality' by the more general definition , can be considered to have four main components: quality planning, quality control, quality assurance and quality...

    .