In the ever-evolving landscape of sales, one thing remains constant: the importance of a robust sales pipeline. It’s the lifeline of any successful sales professional, a conduit through which potential clients become valued customers. But how do you create and nurture a pipeline that consistently delivers results? The answer lies in skill development.
In Hollywood, many films are based on true stories. Don’t let your revenue pipeline be one of them.
There are 3 macro criteria you should be looking at now (and a few subsets thereof) to determine if your revenue pipeline has enough in it to hit your goals for 2021. Listen in to this video for a description of each, and make plans to adjust if there needs to be more in development.
Keeping the pipeline filled with qualified opportunities is one of the toughest things a sales person is required to do. And just as water in a pipe will follow the path of least resistance, so will a sales person when not kept on task. It’s like homework in college or that dentist appointment that you’re putting off; eventually these issues have to be addressed.
But why do today what you can put off until tomorrow? Introducing the #1 pipeline killer – procrastination. Just like pressure gets water in a pipe moving, a plan is the best way to prevent procrastination from sneaking in.
Here are 3 ways to bite off a “chewable” plan and keep constantly back filling the pipeline:
- Assess Current Customers – in many industries 60-70 % of new revenue is generated from the existing customer base. These prospects are the most likely to close in a timely, predictable time frame. Forecasting this revenue is the most accurate. As a frequent customer of a Brooks Brothers, I was recently contacted by a sales person. Through our conversation I gathered that I was a targeted customer because I spent $X in their store every year. They know that I’m already a buyer and with an assigned salesperson they could easily increase those sales.
- Assess the Quality of Leads – no matter if leads are given to you or leads are organically generated, the most qualified leads are those with a personal connection. In today’s world we are interconnected as in no other time in history. That’s the marvel of social media. I find in my business that the business-focused social media is very beneficial. Do I know who someone in the company that I’m targeting? An introduction from a mutual acquaintance turns a cold lead into a really warm lead in an instant. To spend time most effectively is the name of the game, and one of the ways I do this is with social media.
- Assess Progress with a Milestone – This is adding water pressure to the pipe. The speed and velocity of the water through the pipe depends on pressure. Sales people need triggers in place that quickly determine the speed and velocity of deal from contact to close. There needs to be a trigger immediately after the first conversation. Did the customer share any goals with me? If so, that’s someone I need to spend more time pursuing. The best milestone that can provide a great forecasting tool is a Deal Map. This is a document that lists by date and responsibility a map of the deal. Buyer and seller agree to the terms and proposed timeline of the deal. When both parties are working off the same document, forecasting probability and close date are easy to determine.
To get to the golden customer sometimes it means you have to sift through 100 not-so-golden ones. It’s easier to tackle this daunting task with a plan. As the ancient Chinese philosopher, Lao Tzu, so wisely said, “The journey of a thousand miles begins with one step.”
Most senior executives have found themselves reflecting on the past quarter’s results and questioning the projections for future quarters. Quarter or year-end discounting, a flurry of end of quarter deal closings and just plain wishful thinking are all common behaviors that cast some legitimate doubts over the future quarters’ forecast.
Having confidence in your pipeline is the key to meeting or exceeding sales quotas. In just about any economic environment, missing sales goals is not a situation any executive team wants to end up in but all too often, there’s that quarter or year-end surprise. Here are a few best practices to consider:
- Have Enough Opportunities – Depending on the length of your sales cycle and your win ratio, this will vary. As a rule of thumb, if you don’t have at least three times the amount of opportunities in the pipeline as your sales goal, you may be looking at a pipe dream instead of a pipeline.
- Grade the Opportunities – Not all opportunities are created equal. You must have measureable fact based rules for assigning values to each of the opportunities. Using historical data to grade the opportunities in the pipeline is critical to creating an accurate forecast. Using standardized milestones for each opportunity in the pipeline is the primary tool for assigning a grade.
- Create an Opportunity Profile – Using historical data to understand the characteristics of different types of deals in your pipeline will keep your team focused on making sure they have a portfolio of A, B and C opportunities. Concentrating all your resources on a few “A” opportunities can often lead to disappointment or reduced margins if you need to discount to salvage too few opportunities in the pipeline. An “A”, “B” or “C” opportunity can be upgraded with a new budget year, a new decision maker at the customer company or just by creating a new urgency to benefit from the value of your solution.
- Ongoing Business Development – Waiting till the pipeline is getting empty or till the end of the quarter is a recipe for failure. The amount of time spent on business development may vary, but having salespeople spend 10-20% of their time every week or month is a good rule of thumb. Opportunities in the pipeline are constantly being closed, downgraded or deleted. Business development activity is a critical step to maintaining the pipeline. By doing ongoing business development, you are more likely to reconnect with an opportunity that is in the process of going into play.
- Define your Sales Process – Having a clear view of how long it takes different types of opportunities to move through the pipeline is essential to managing your opportunities. While sometimes a sales cycle may be compressed by an offer to discount, more often than not, the buyer just bakes in your new offer into the negotiation and proceeds to move towards a decision on their same timetable. If you offer a discount too early, they may use that as a starting point for future negotiations.
- Ongoing Inspection – If the management team doesn’t inspect the pipeline regularly, it shouldn’t expect to have a high degree of confidence in hitting the goal. It’s only human nature that sales teams will pay attention to the things that their management focuses on. If there is a focus on evaluating opportunities, the sales team will make sure they have opportunities. The goal is to close sales, but leads and opportunities just don’t magically appear.
Managing a sales pipeline is an arduous task that requires diligence, detail and discipline. The alternative is to resort to strategies that have failed the test of time like “Spray and Pray”, “Hail Mary” and wishful thinking. There’s no time like the present to schedule a pipeline review. The longer you wait, the more likely you are to miss your goal.
Flannery Sales Systems helps organizations develop and implement a repeatable sales process. Improving the effectiveness of your sales organization is the key outcome we provide to clients. We would welcome an opportunity to explore your needs and understand where you could benefit from improved skills and sales processes. Flannery Sales Systems works with a broad cross section of industries and we are confident we can enhance your results.