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Scrum in Sales

Scrum has it's roots in software development, but it is often applied in other domains. Manufacturing, education, contracting, defense, even non-profit work. One area of early success in adopting Scrum has been sales.  Businesses that have used Scrum for sales say it made a chaotic process transparent, predictive and controllable. We have commonly seen Teams increase their hit rate by 50%.

Estimated time for this course: 30 minutes
Audience: Beginner
Suggested PrerequisitesScrum Framework, Product Backlog, Scrum Board

Upon completion you will:

  • Understand how to manage your sales process with Scrum
  • Know how to set up a scrum board for a sales team
  • Know how to organize your sales team into a Scrum team
  • Understand how to compensate an agile sales team
  • Qualify for PMI PDUs. See FAQ for details
Scrum in Sales Overview:
Sales teams at first may be skeptical of the team oriented nature of Scrum. It is very different from a traditional commission-oriented sales and they are often initially hesitant to share leads and sales techniques. Due to the individual nature of sales positions, Scrumming sales requires a cultural shift. Compensation and financial incentives for a Scrum sales team must be aligned with the team’s success, not individual results.

There are some adaptations to Scrum in a sales context. See the tabs below for details.

Backlog and the Sprint
The first thing any Team needs to get started is a Product Backlog. For a sales team, think of this as your sales pipeline. The Product Owner needs to make a list of all potential leads and then prioritize them according to business value. This can be done in a couple of ways. The Product Owner might want to prioritize the leads according to the highest potential revenue, from hottest lead to coldest, by which client might generate additional leads, or by some combination of factors. Ordering the Backlog is part science and part the judgment of the Product Owner so it is important that she has a clear sense of the company’s sales strategy and how to implement it.

Sprint Structure: It is up to the Team to determine how long the Sprint should be. Some sales teams have been known to Sprint quarter to quarter. Other Teams find week long Sprints to work. Generally speaking, iterations should be long enough to move a lead to the next step of the sales process but short enough to keep the Team focused and limit the amount of unplanned work that needs to be addressed in the Sprint. Selling a high-grade weapons system takes a lot more legwork than selling a widget. A sales force for a defense contractor may need a longer Sprint than the team selling the widget.

The Meetings
Sprint Planning: At the beginning of every Sprint, the Team needs to plan for the coming iteration. This means discussing what leads in the Backlog need to be pursued and how best to work as a team to move each lead forward. The idea behind Sprint Planning is to start the Sprint with a clear idea of what needs to be done and who might be best positioned to accomplish it. Thorough Sprint Planning makes for a smoother Sprint with better outcomes.

Daily-StandupDaily Stand-up: Because sales people are often on the road or are remotely located, many teams struggle to find a time for everyone to meet. It is the job of the Scrum Master to coordinate the team using whatever tools necessary and convey to the Team that meeting everyday and discussing Impediments can increase Team performance. By communicating with the other sales people, the Team can leverage the Team’s entire knowledge base for every lead. This can have a major impact on the number of leads that turn in to sales.

Refinement: During each Sprint, a cold lead can turn warm or even into a sale. It is important that the Product Owner stays in touch with the Team during the Sprint so she can up-date the Backlog accordingly. This will make Sprint Planning easier.

Review & Retrospective
Sprint Review: In software, Teams demo their products. In sales, the review is an opportunity to show your fellow Team members what deals you closed and how you did it.

Scrum Inc. RetrospectiveSprint Retrospective: In Scrum, the Retrospective is the fundamental ritual that allows the Team to inspect and adapt. In sales the Retrospective is particularly powerful. Implementing Scrum is a challenge. Once the Team has accepted the cultural change and has started to build some experience with the Scrum framework, it is important for the Scrum Master to convey that Scrum is more than just a way to organize, it’s a philosophy of Continuous Improvement. Every Retrospective needs to produce a Kaizen or top improvement for the next Sprint. Over time, the Kaizens should build and have a positive impact on the Team’s Velocity, or how quickly a lead moves from cold to closed.

The Scrum Board
The Scrum board is a tool that makes work transparent. In traditional Scrum, the Scrum Board is used mostly by the Scrum Master as a way to see how the Team is working: if they are getting off to a slow start, if they are having issues moving work to done or if the Sprint is in danger of failing. In sales however, the Scrum Board takes on an even more critical role.

As the slide above shows, leads are usually listed vertically down the board in order of priority, and rather than one work in process (WIP) column, on sales boards there are multiple columns across the horizontal axis for each step in the sales process. Leads are moved to the far right “done” column only when a sale has been closed or the lead has proven fruitless.

The transparency created by posting all sales leads and their status helps the team to see what leads are struggling to move toward the done column. This allows the Team swarm on sales when they start to wither. As a sales team gets more experienced working the Scrum Board, patterns usually start to emerge. In the case study attached bellow, the team was able to figure out how many cold calls it would take to move a lead from cold to warm. In turn, they then were able to see what sales activities would move a warm lead to a hot lead or a sale. By tracking leads on a Scrum board and discussing what worked and what didn’t every week, the sales process became transparent. The Team was then was able to discern patterns in sales activities and apply metrics, allowing them to better predict the outcome of any lead. For the Team in the case study, this lead to a 50% jump in sales.

A Team might want to set up an acceptance test like, “any lead that doesn’t move at least 3 steps through the sales process by mid-Sprint should be abandoned.” This allows Teams to spend more time on leads that have a higher probability of closing. This is how the Team improves sales as entire unit. Improving individual performance is a fool’s errand, improving the Team is a much easier prospect.

Commission based compensation is an incentive to increase individual performance. Unfortunately it has the ill-fated side effect of eliminating any possible collaborative thinking that might lead to an increase in overall sales. In many respects, commission works against the best interests of the organization.

Scrum in Sales seeks to leverage the collective knowledge of the Team to the benefit of the organization. For this reason, compensation needs to be based on Team wide incentives. This is a huge cultural shift for sales people who believe they have an intrinsic gift for getting customers excited about a product. But once the sales process is made transparent, it becomes obvious that by sharing contacts, leads and techniques both the organization and the individual Team members will benefit financially from an overall increase in sales. Whatever incentive program management decides on needs to be designed to raise all boats.

Power of Scrum in Sales
The Team should be aware that as they improve, their efforts might impact other parts of the organization. In the case study mentioned above, after the team increased their consulting sales, the human resources department couldn’t keep up with recruiting new consultants. So, the sales team lent them a hand and then created a system to inform them when sales were increasing so the human resources could increase their effort as well.

Implementing Scrum outside of its traditional role is relatively new. Organizations are just now pioneering new ways to use Scrum. However, since Scrum is based on Continuous Improvement and adaptation, it is well suited for most applications. The important thing to remember is that when first adapting Scrum, Teams need to be rigorous in their practices. First-time Teams tend to cherry-pick the Scrum process to fit their old way of doing things. This leads to what is called Cowboy Scrum and doesn’t produce the same results.

Be rigorous, inspect and adapt and strive for Continuous Improvement. That is the power of Scrum.