When your sales pipeline lies and what it means
Planning is important in any business. And it's made that much easier when you have insight into the new and recurring revenue being generated. As any budget owner knows, having a sales pipeline you can trust helps you plan with greater certainty.
But what if your sales pipeline lies? And, moreover, what does it mean?
Here are 3 causes of sales pipeline inaccuracy, what causes them and what you can do about them:
1. An opportunity is in the pipeline when it really isn't an opportunity
Regardless of the CRM you use, an opportunity is generally understood as a prospect that is in the process of engagement because there is a problem to solve, a willingness to solve it and a willingness to spend money to solve it. Sometimes, these criteria are are not well understood yet they're still included in the pipeline.
Lack of consistent criteria to qualify leads and prospects
Lack of a consistent process to use to apply this criteria with prospective clients
Pressure to reach a number target: either $ or Number of new leads/opportunities created in a timeframe
What you can do about it:
Identify the criteria about the key aspects of sales opportunities so that sales people have a clear and consistent framework to apply, these may include:
Client Need (what problems are they trying to solve, are there upside opportunities, what is the timeline, what are the upsides and risks?)
Key Stakeholders (who are the key stakeholders and what is their level of influence, who will own the issue or project, who owns the budget?)
Value Proposition (what value can be delivered to all stakeholders, how will the value be measured?)
Decision Making Process (what is the process the stakeholders will use to make a decision, what criteria needs to be met, what is the budget and sign off process?)
Competition (who are the main competitors, how are they perceived by the decision maker and the key influencers)
Solution (will it achieve the desired results, is it well supported by the key stakeholders, will it get signed off?)
Make sure you're rewarding behaviour that will drive the outcome you actually want (i.e. sales over busy-ness). Businesses that reward activity tend to believe sales is ONLY a numbers game. While a certain level of consistent activity will continue to drive business growth, it's the way you manage the opportunities is what counts.
2. The opportunity is genuine, but the size of that opportunity is either understated or overstated
Understating opportunities is mainly a lack of qualification due to a client engagement process that lacks depth and rigour.
If a salesperson hasn't properly scoped the impact of the customer's problem, they may be leave a lot on the table. In situations where a salesperson inadvertently becomes an "order taker" they fall into the common trap of simply proposing a solution the customer specifically asks for, using only the information provided by that person. Further investigation provides a better check and ensures the full nature of the situation can be understood.
Overstated opportunities happen when salespeople "create" a solution to a problem that may exist but hasn't been properly scoped to better understand what criteria is most important to key stakeholders and decision makers, including the budget and potential ROI.
What you can do about it:
Ensure you have clear qualification criteria to ensure the "hard questions" are asked of the prospect to uncover the real size of the opportunity.
Even when there is a greater problem that has been uncovered, the prospect may only be able to allocate a defined budget to that problem. This simply means the most urgent/impactful aspects that can be implemented within the budget should be outlined.
Salespeople must be prepared to dig a little deeper to uncover the real scope of the opportunity.
3. The opportunity's stage of readiness is inaccurate
Have you ever presented a proposal, and then found it virtually impossible to get back in contact with your prospect? Those times when you feel like a corporate stalker leaving voice messages, emails and getting no response?
When the solution presented isn't relevant to the prospect, they may avoid the salesperson because they might think the sales perosn hasn't listened to them.
A key component to relevance is timing; if your solution isn't in the top 2 or 3 business priorities, chances are it won't get any real attention until that changes.
What you can do about it:
Asking early on about timing will help you manage your interactions more appropriately, so that nothing formal is proposed until the prospect is truly ready.
And again, criteria will help any salesperson ensure they've understood the criteria, decision making process and timeframes well.
Using a template to address some of the elements we've uncovered above will help sales teams to have consistency across their engagement with clients and prospects to ensure you can count on what is in the pipeline and plan accordingly.
Tips from John Buchanan, Beyond 19, Coaching Practicing Lead:
1. Reflect on that personal best, "PB" sale or sales day or sales week - what did you do? What was in your control that you nailed?
2. Use your reflection and experiences and combine with the Sales pipeline process above to give yourself BEST chance of creating a new "PB".