How to Implement the PDCA Cycle in Sales with Concrete Examples
This article explains how to apply the PDCA cycle in corporate sales activities, from the most basic explanations such as the purpose and structure of PDCA to examples of application and points for improvement, so please read on if you are in charge of corporate sales.
That is because it is one of the most useful frameworks for improving a company's sales process.
Since PDCA can also be applied to corporate sales activities, sales forces with sluggish sales performance and companies with slow sales growth due to external factors, such as changes in market needs, have been actively adopting this method in recent years. It's also a useful framework for improving a company's sales processes.
This article explains how to implement the PDCA cycle, especially in sales, with specific examples.
I will also introduce sales support (SFA) tools that will support PDCA, so if you are a sales representative of a company, please read on.
Table of contents:
- What is PDCA in sales?
- What is the PDCA cycle?
- Purpose of PDCA
- Key points of the PDCA cycle in sales activities
- Formulate a plan after clarifying the objective
- Find the essential causes
- Present improvement plans in the form of numerical values
- Do not seek immediate results too quickly.
- Focus on the positive aspects.
- Examples of PDCA in sales activities
- PDCA failure example 1: Ambiguous goal setting and action plan
- PDCA failure example 2: Cases where essential problems (improvements) have not been derived
- PDCA success story 1: A case where sales performance was improved by correctly recognizing the current situation.
- Successful PDCA case 2: A case where the definition was clarified and led to steady results.
- Why SFA is indispensable for PDCA
What is PDCA in sales?
The PDCA cycle is a concept originally proposed for quality control in the manufacturing industry by repeating the cycle of "Plan ⇒Do (execution) ⇒Check (evaluation) ⇒Act (improvement) ⇒Plan (plan)" in the operation of the business.
This cycle is highly versatile and can be applied to any business and is also a very effective method for improving individuals' daily work performance.
What is the PDCA cycle?
It is a method that repeats a series of cycles: manufacturing products according to a preliminary plan, identifying the causes of problems when they occur, identifying areas for improvement, and incorporating these into a new plan.
In manufacturing sites, the PDCA cycle is often combined with KPI, a quantitative evaluation method regarding the degree of achievement of goals to repeat improvements. But it is recognized as an effective framework for any company to practice business management and improvement.
The following is a brief explanation of PLAN, DO, CHECK, and ACTION items:
The first step is to set goals in the areas you want to improve.
Create an action plan to achieve the goal, and the important thing here is to make sure to put a deadline along with a specific numerical goal.
If you create vague and ambiguous goals or plans that cannot be evaluated quantitatively, you'll not be able to identify areas for improvement later on.
We will execute the plan that we have set.
If you are in sales, there will be many things related to telephone appointments and visits, but in that case, it is necessary to record information such as the client name, the content of the negotiation, and the needs of the other party. So, this makes it easier to evaluate what you have done and the results later.
Also, since the parts that are different from the original plan will always come out, be sure to record them that you have modified in the plan to evaluate them later. It's not that we have to go according to plan.
It does not mean that you have to proceed as planned.
It is the stage where we verify and evaluate whether we were able to carry out our original planned goals and whether they led to results.
We will quantitatively measure the actual results and list the issues and problems in doing so.
Evaluate what went wrong with the part that failed to achieve the goal, and analyze the success factor for the successful part.
Examine measures to improve the issues and problems identified in the previous step, CHECK, to improve operations and reflect them in the next step, PLAN.
By repeating this process and regularly improving, we can improve the performance of our daily sales activities.
Salespeople can improve the sales level of the entire organization by improving their sales skills. By improving the efficient management system, we can create a comfortable working environment for each salesperson.
Purpose of PDCA
Even if you are not in the field of sales, you make plans to achieve some goals.
However, if you only set a goal and you can't improve the problems you see from the results you're running, you won't be able to do much better.
PDCA is not about being satisfied with executing a plan once.
The objective is to keep improving performance by consciously repeating the process of evaluating results and making improvements. There is a great significance in repeating the process continuously.
Continual improvement is necessary for any field of work.
To quickly adapt to the environment surrounding a company and continue to provide products and services tailored to changing market needs, it is necessary to continue to implement the PDCA cycle company-wide.
PDCA's key points in sales activities
Now, I will explain some of the key points for keeping the PDCA cycle going in sales activities.
Make a plan after clarifying the purpose
In recent years, people have come to believe that the PDCA cycle is necessary for any field.
However, there are some cases where the PDCA cycle itself has become an objective, and people are confused because they do not know what exactly they want to improve.
First, clarify the purpose of running the PDCA cycle.
When planning, analyze your organization's current situation and quantitatively identify the goals that you need to achieve. Also, make sure to set a firm deadline for achieving your goals so that you can confirm the achievement at a later stage.
Explore the essential causes
In the evaluation phase of action, it is necessary to explore and improve more important causes rather than being satisfied with the superficial causes of success or failure.
Many issues seem to be more complex and have many to be solved.
However, when you look deeper into the cause of the issue, many cases branch off from a single essential one.
No matter how much you solve a superficial issue, similar issues will come out one after another. However, if you solve essential and fundamental ones, there will be no issues.
Show improvement plans as numbers
It is also necessary to indicate the improvement plan as numbers as possible and concretely indicate what to do and how many times.
Even if we can find the essential issue, if the measures to improve it are ambiguous, it will not lead to concrete actions, and we will not be able to measure the effect.
It is desirable to set goals specifically, but it is necessary to provide quantitative improvement proposals as much as possible to improve them and lead to the next plan.
Don't expect results too soon
As explained in the purpose of PDCA, PDCA improves operations by practicing it over and over again.
Since it is rare to see an immediate effect just by practicing it once, it is necessary to accumulate improvements. If it doesn't work, don't give up and practice it repeatedly.
Look at the positive side of things
In the PDCA cycle, we tend to focus only on improvements.
However, it is also necessary to look at the successes and growths and think about what you can do to grow further.
In some cases, it is often better to truncate areas that you cannot improve. And focus on the areas that have more room for improvement.
Examples of PDCA in sales activities
I will now briefly introduce some examples of successes and failures of the PDCA cycle in sales activities.
Example of PDCA failure 1: Ambiguous goal setting and action plan
One company's sales team has been experiencing a drop in the overall number of closed deals, so they set a goal to improve the closing rate by implementing the PDCA cycle.
They set a goal to increase the number of contracts per day, and they tried to increase the closing rate by their methods, such as making more sales calls and visiting more customers. However, it didn't work for any length of time, and before they knew it, the members had forgotten that the PDCA cycle even existed and had returned to the state of sluggish performance.
Causes of failure and areas for improvement
The cause of this failure was the vagueness of the goal setting and the lack of a concrete action plan.
Since each individual acting in a disjointed manner based on the vague goal setting of increasing the closing rate, the team could raise points for improvement and did not receive appropriate feedback.
As you can see, many organizations stumble at the point of goal setting.
The team needed to set specific, quantified goals and create a concrete action plan to share with the team.
Example of PDCA failure 2: Not being able to derive the essential problem (improvement)
One software promotion team, concerned about chronic declining sales, thought of interviewing customers themselves to understand changes in their needs and decided to implement PDCA to improve their products.
However, attempts to incorporate the opinions of various customers into software development were not very successful.
In addition to the fact that customers' opinions varied and many factors were difficult to link to improvements, the response was not positive even if they made improvements to the products.
After several months of trial and error, they were eventually unable to derive what aspects would suit the customer's preferences, so they continued to propose existing software.
Causes of failure and areas for improvement
What the customers wanted was not an improvement plan for the software itself but a way to apply it to their actual business.
Many customers understood the full functionality of the software. But they did not know how to apply it to their own business.
Therefore, the promotion team, working with the sales force, switched from a simple way of selling conventional software to a consulting-type sales style.
That allowed them to improve sales by advising on the appropriate implementation method for each client's environment.
PDCA Success Story 1: Improving sales performance by correctly recognizing the current situation
Mr. A, assigned to the sales department, saw the decline in sales performance in the past few months as a problem and decided to use the PDCA cycle to improve his performance.
To find out the problems with the current sales method, he picked up the differences in behavior before and after the performance started to decline, process by process.
After realizing that the time of day to make calls and the materials' content were too vague, Ms. A made a concrete plan to improve these issues and repeatedly implemented and improved his plan.
As a result, his sales performance improved, and he now ranks first or second in his team.
Success factors and areas for further improvement
One of the factors that made the PDCA cycle successful was, above all, that he started by correctly recognizing his current situation.
Then, he would divide my sales process into different stages, conduct his research and analysis to identify specific issues, and set specific goals for improvement.
To successfully implement the PDCA cycle, it is essential to correctly recognize the current situation and have a concrete action plan.
PDCA success story 2: A case of clarifying the definition and steadily achieving results
A web marketing company was concerned that the effectiveness of the marketing measures they were proposing to some of their clients had started to decline over the past few months.
In response, the company decided to clarify the numerical targets that should have been achieved based on the results of other measures and re-defined the target users.
That led to the realization that the client had been approaching users that they had not envisioned originally, and they decided to re-propose a marketing strategy from scratch.
As a result, the client company's sales gradually has begun to improve, and they were able to return to the same level of sales performance as other clients.
Success factors and areas for further improvement
As I have repeatedly mentioned, it is necessary to make specific and quantitative goals, execution plans, and improvements in the PDCA cycle.
In this case, re-defining the target audience from the start highlights what needs to be improved.
If you are just blindly going around the PDCA cycle, you may focus only on the wrong improvements before you know it. By regularly re-defining goals and targets, you can correct blurring during the execution phase.
Why SFA is indispensable for PDCA
By using the SFA's customer information sharing function, you can significantly reduce the time and effort required for business reporting and input, as well as the cost of information sharing. By cutting down on such wastes, you can dramatically improve productivity.
Why don't you use SFA in this way to revitalize the PDCA cycle in the sales field?