How to Find Bottlenecks in Your Renewals Process [Part 1 of 2]

Every sales process faces bottlenecks. Existing systems (or people) slow down the process and introduce errors, create unnecessary extra work, and bring down efficiency overall. Bottlenecks cause disruption wherever they occur (e.g. the sales pipeline, customers' buying processes, internal operations), and negatively impact the bottom line.

Identifying these existing bottlenecks and creating solutions to prevent them can decrease stress levels, increase revenue, and improve quality and productivity.

Where are the Bottlenecks in Your Renewals Business?

You probably already know what some of the bottlenecks are in your renewals business. Maybe they are outdated manual processes like pricing or product data verifications, or emailed requests to review and approve re-quotes that must be sent up and down the channel. There are likely even more hold-ups in your renewals process, and the key to removing them and making your renewals more efficient and effective is to figure out what they are in the first place.

There are two different types of bottlenecks that affect renewals teams: short-term and long-term. Short-term bottlenecks often will resolve themselves if you can hold out long enough � they are caused when a team member is out on vacation or leave, or when a system unexpectedly goes down. When the employee returns or IT gets the system back up and running, everything returns to normal.

The more critical bottlenecks to address are the long-term ones, which occur all the time and in every kind of company. They are caused by tasks that take up more time than they are worth, activities that slow down an employee's working pace, tasks that cause work to backlog, things that negatively impact the time to respond to a customer, and anything that slows down the sales process in general.

Research shows that 35-50% of sales go to the vendor that responds first. (Source: InsideSales.com)

There are three primary strategies to identify bottlenecks.

#1: Look for the Biggest Causes of Stress

What process is the most frustrating for you or your team? Does something make you feel like you could be so much more effective if only you didn't have to do ___________ first?

Questions to ask yourself include:

• Is the stress the result of an ineffective system or process, or perhaps it results from a person?
• Is one particular kind of work/output delayed or late more often than it is on time?
• Are people waiting on a specific kind of information or report in order to do their job?
• Is too much work piled up at one end of a workflow and not enough at the other end?
• Are certain people or departments always late delivering items to internal or external customers?
• Is a particular software or system regularly breaking down or not achieving what you need from it?

Brainstorm among your renewals team to find out what the biggest causes of stress are, and you will likely identify several major bottlenecks.

#2: Create a Process Flow Chart

Have a specific process that you know is causing a bottleneck, but not sure what the problem is? One way to start is to map out every step in the process. No piece is too small. Write it all down, make it visual, and attach timelines to it. Where is progress slowing down?

#3: The Five Why's Technique

We're borrowing this approach from Sakichi Toyoda of Toyota Motors. It's a pretty self-explanatory tool for identifying a root cause. Start by naming the problem that you want to address. For example, maybe a re-quote takes two weeks on average to process through the channel and respond to the customer. That's a huge problem. To determine what is causing the problem, work backward and ask "why."

• Why does it take two weeks to process a re-quote? Because it has to go to the distributor for review, wait for them to look at it and make changes, then move to the manufacturer for review and changes, then go back to the distributor, then move back to the VAR, and then if everyone approves, it can be sent back to the customer.
   
• Why does that mean it takes so long? Because each player in the channel uses email. When someone is out of the office, traveling, or on vacation, it holds up the reviews.
   
• Why does the entire channel need to review a re-quote? To maintain visibility into the renewals business and to make sure that the final contract is in line with business strategies.
   
• Why do channel members need emails to maintain visibility? Because we don't have any other tool in use to enable them to review and approve re-quotes.
   
• Why don't we have any other tool in use for reviewing and approving re-quotes? Because we haven't investigated any tools like that. Ah-ha! And therein lies the root cause of the bottleneck. "We haven't investigated a tool" to solve the problem.

Our next post will address how to fix bottlenecks once you've identified them. While you're waiting to read part 2 on this topic, download our most recent eBook, "Shockingly Easy and Successful Renewal Quoting."