Why you should read this whitepaper
Generate ideas and solutions for effectively generating, collecting and managing revenue. A business is a group of departments and functions, but all should have one common goal – to drive revenue. This can be achieved through three key changes:
- Making the process more efficient
- Helping sales teams sell more – to both new and existing customers
- Providing excellent customer experience and service which builds brand loyalty and keeps you customer coming back to you and not to your competitor
All of these changes can be accomplished through an efficient Lead To Cash (L2C) process.
What is L2C
L2C is the process your organisation takes as the customer goes through their sales cycle with your business.
Combines ‘Opportunity to Order’ and ‘Order to Cash’ or ‘Quote to Cash’ as it is sometimes known.
Covers each step;
- Marketing and lead generation
- Lead nurturing
- Sales conversion
- Order processing
- Invoicing and Collections
Can be applied to new sales and repeat sales, after all, retained customers are more profitable for your business than new ones.
Benefits of improving L2C
Aberdeen Group’s “Breaking the Law of Physics: Shortening the Last Mile Through Workflow Automation” by Peter Ostrow (April 2013), presented the following figures for the ROI of a great L2C process.
- 105% larger deal size
- 49% higher proposal volume
- 28% shorter sales cycle
- 26% more reps achieving quota
- 17% higher lead to conversion rate
Better L2C ultimately leads to improved customer experience, which has its own benefits. A Harvard Business Review article suggests that in transaction based businesses customers who gave the highest marks for their experience went on to spend up to 140% more and continued to subscribe for an additional six years compared to those who gave the lowest marks.
Having a seamless view of the customer journey, and as a result better visibility of common issues and questions, also helps cut costs. Forrester estimated that it costs a company £3.87 to answer a call in a UK call centre, and £3.70 to respond to an email. If you can’t resolve a customer issues first time these costs will accumulate. Alternatively, use the insights gained from your L2C data to help the customer resolve their own issue via your website and the end cost becomes negligible.
Why is it important
Connecting front-office marketing and sales, with back-office business processes, a company can increase sales and order accuracy, eliminate the need for manual handoffs and significantly decrease the length of time from original sales lead to the receipt of cash from the customer. Plus! The increased accuracy and efficiency ultimately leads to increased customer satisfaction with all the associated benefits from improvements to loyalty, repeat sales and revenue.
An integrated L2C process is easier to manage from a single location, even across multiple sites and geographies.
Reporting and forecasting are also simpler. You can quickly see which combinations of products, services and promotions are most effective and profitable. You get a better understanding of the experience the customer seeks, both in marketing messages and customer service, allowing you to repeat this. Finally, the whole process becomes much more scalable – meaning you can easily grow the business or roll out the solution to other business units.
What can go wrong
With long and complex processes there are plenty of places where things could go awry. The chance of problems are increased each time there is a change in software system, process, department or requirement of the data. Examples of problems:
- Don’t know how effective marketing leads are at generating revenue
- Sales teams can’t see the full picture so don’t spot opportunities to increase revenues through cross selling and upselling
- Data collected by the sales and marketing teams is inefficient/inappropriate for back office operations, causing delays and errors
- Sales and Marketing teams have no visibility of stock levels, service availability or lead times leading to over promising to the customer or missing the opportunity to make a quicker/amended sale
- Manufacturing and logistics departments have no idea of upcoming peaks and troughs in predicted sales leading to inefficiencies in planning and ordering
- Accounts and Finance teams don’t have the correct contact details for customer billing departments, leading to delays in receiving payment and even cash flow difficulties
- Customer service teams don’t have an integrated view of the customer relationship causing delays in service or resulting in the customer being passed through multiple departments to resolve their issue
- Poor integration causes bottlenecks, delays and errors which cost the company money and demoralise staff
- Customers don’t receive the experience they seek so either don’t buy or don’t renew, instead switching to your competitors who can provide the value they want
- Failure to retain customers and high costs and poor performance in acquiring new ones can cause a drop in company profits and revenues
How to fix it
Don’t just focus on one part – it could be the root cause of that problem is earlier in the process.
For example, simply putting the sales departments across multiple business units onto the same CRM won’t automatically improve the customer experience and increase revenues. The different teams may have different processes for collecting and collating information, so the data one team needs to cross sell products from another may not be there. Also, if there’s no connection between CRM and order processing, those orders may fail to be created and dispatched correctly. And if the finance team in one department, using their legacy accounts system, are unable to invoice for the products that have been cross sold, you’ve got a whole heap of new problems. So whilst you’ve fixed one issue you’ve not tackled the root cause or seen the impact on the rest of the process. At best, you’ll stand still, at worst, the upheaval adversely affects staff morale and customer experience resulting in declining sales and revenues.
To fix the problems you need to know where you are now, where you want to be, then create a roadmap of changes that lets you reach your desired destination. Unfortunately it’s far too often easier said than done.
You can make the solution easier by breaking it down into simple steps.
Step 1: Where are you now
First of all, make sure you know exactly what systems are being used across your business for the current L2C process. These aren’t always the ones you think. For example, where problems have been long standing it’s not surprising to find staff have found their own workarounds, using emails and spreadsheets to transfer data and analyse it where the proprietary systems are failing them.
Next, understand how your staff use the system. This can be done through process mapping, data analysis and stakeholder interviews. It’s also a great opportunity to listen to all the problems the staff have with the systems and process, and the suggestions they have for how things could be done better.
With all this information you place it’s much easier to see where problems are really occurring and the impacts those problems have on the whole process.
Step 2: Where do you want to be
You probably already have a clear idea of what you want your ideal process to look like – a utopia where all the systems talk to each other, all staff follow the documented processes, and your customers receive a seamless end-to-end experience encouraging to spend more with your business.
Stop! Is this realistic?
Yes, it’s the ideal but can you actually achieve this and does the cost involved guarantee a level of return that exceeds that expenditure?
There will be some parts of your dream that are just unattainable for now so you need to make sure you have a realistic end goal. This doesn’t mean that you don’t aim for that utopia, you just accept that you may not reach that immediately. The most important thing is that you aim for a state where you are increasing revenues with staff and stakeholders who are fully engaged with the aims and all actively working towards that improvement.
Take each aspect of your end goal and rate it on the ease of achieving and the value it will create. This will let you create a list of the things to achieve that are essential, those that should be in place (but won’t kill the project if they aren’t), those you could have and those you’d like to have.
The first part of your change should be achieving the essentials. With these in place you can review the shoulds, coulds and would likes, and decide if they are still relevant or have changed priority, and start planning the next stage of your L2C improvements.
Step 3: What needs to change
Now you know where you want to be, and where you’re starting from, you can work out exactly what needs to change.
For each planned change make sure it is reviewed by stakeholders from all departments so they can feed into the project and let you know how that change will impact them. There’s often a lot of compromises to be made at this stage as what would create the perfect situation for one department could result in increased work levels and impracticalities for another. For each comprise decide if the value created outweighs any difficulties, and discard the change if it doesn’t.
When you have your final list of changes you need to plan the project so they are all implemented within the timescales and budgets imposed. Rather than trying to do everything and then review it, break the project down so you deliver the changes that create the most value first. Since the impact of a lot of these changes may be hypothetical it is also important to make sure you review progress, and impact, at regular intervals. An implemented change may cause a problem that you hadn’t considered before, or it may not actually be provided the value expected. If this is the case don’t be afraid to review the changes and priorities and redraw your route map – after all, it’s better to make the small adjustment now than to wait till the end of the entire project and realise you are no better off.
What a great L2C process looks like
You have all the information you need – but aren’t drowning in a sea of data. Everyone who needs access to the data can do so quickly and easily, without having to get developers to write code and scripts for reports
Your marketing team know what appeals to your customers and can promote products and bundles that incite them to purchase. They also know which marketing activities not only generate the most leads, but which of those leads convert, so they can create more of them.
The sales team are aware of the customer relationship and behaviour so they can offer appropriate products as part of cross selling and upselling to increase revenue. They can also quickly and easily see what is available to sell and create quotes without having to check multiple systems or departments
The business can easily see which products/services are most popular and most valuable, and therefore plan production or scheduling more effectively, to make sure efforts are focused on revenue generating activities
The order can be passed to the dispatch department with the right information so the chance of errors in dispatch and delivery are reduced
Accounts teams can see exactly what was ordered, and the discounts or promotions applied, making invoicing straightforward without the need for the re-keying of data. Bills are sent to the right addresses and in time for customers to take advantage of any early settlement offers.
Customer service teams can see the complete customer history in the same place so they can quickly resolve any issues and even pre-empt enquiries, saving them time and you money.
Your customers get a great experience when they do business with you. This makes them more likely to become loyal, spend more with you and recommend you to other potential customers.
The Smart Tips L2C Optimisation Process
The CAM methodology has been developed to help organisations deliver rapid results from business change, and to enable them to maintain that momentum into the future.
In essence, follows the same steps as outlined in the section ‘How to fix it’ but lets you capitalise on our skills and experience gained from related projects.
We don’t just leave our clients with a successfully delivered project that creates real business value, we leave a legacy in the form of knowledge transfer from our consultants to your internal teams so they are better placed to perform valuable analysis, and deliver optimised projects for years to come.
