eBusiness Weekly
Robert Gonye
The more control and visibility you have into your sales pipeline, the more revenue you’ll bring in an element which keeps sucking the client’s loyalty likened to a vortex.
The new business learning dictionary defines a vortex (modern day pipeline) as a rotating motion around a centre, especially one in which a force situation of suction operates so that the particles are drawn to or held by their relationship with a central point or zone.
Another goes on to say a state of affairs likened to a whirlpool for creating an irresistible force . . . my personal favourite would be a cyclical force regarded as drawing into its powerful current everything that surrounds it.
If those bold terms don’t describe your current sales and marketing processes, then you and your sales staff are not only working too hard, you are most certainly leaving a ton of money on the table.
In scientific terms (with business application metaphors ascribed) a vortex happens when a cold air front (think cold leads) meets a warm air front (warm, inviting marketing-based relationship) and the cold air drops as the warm air rises (gain connectivity).
The essence of a good sales vortex is to provide you a meaningful way of changing mindset, educating people about your product/service company and getting them energised to want to do business with you.
In fact a properly constructed highlight optimised, targeted and relevant sales vortex is the most powerful tool in your sales and marketing arsenal, yet most business owners don’t have one implemented and a lot of entrepreneurs have never even heard of one. The common term is sales and marketing funnel which will be the first point before we go deeper and into an exponentially more powerful tool, the vortex.
Growing a healthy pipeline is possible through careful assessment and management. A sales pipeline is instrumental for the success of the selling process, however, assessing an entire team’s sales pipeline stages especially where the manager is not apprised of the ins and outs of each and every deal requires more than simple intuition.
Managers must develop a more systematic process to test sales pipeline health across the organisation as a whole.
Three key questions which can help sales managers quickly and accurately assess their team’s sales pipeline and no guessing required. Allow me to share on some sales pipeline key questions to maintain a health pipeline
(1) What shape is the sales pipeline?
The immediate image that pops into most sales reps’ and managers’ heads for the term “sales pipeline” is a funnel — wide at the top, narrow at the bottom. This type of pyramid shape implies there’s a 3x multiple relationship between leads at the top and closed deals at the bottom. It’s with this shape in mind that some managers require their reps to have three times the amount of deals they need to close in their pipeline at all times.
Sadly, this profile is inaccurate. A healthy sales pipeline dose not look like a funnel at all
The most significant healthy sales pipeline, once a lead makes it past the first milestone, it should be highly likely that the opportunity closes and creates a new customer. A good sales manager will tolerate poor conversion rates early on (during qualification) in exchange for fantastic conversion rates later (close).
High-performing reps often maintain a double ratio of opportunities to deals in their pipelines, and if your team’s pipeline looks more like a funnel than a cocktail glass, it’s time to make some changes.
(2) What’s the breakdown of revenue vs. units?
Sales teams work off a revenue target, revenue is generally what sales managers focus on when assessing pipeline and forecasting. However it should not be the only metric as it will cause a huge dent to prospects in the pipeline. For instance, let’s say a rep is working three deals, forecasted at $1, $100, and $1 000, respectively. This pipeline contains $1 101 in revenue, and three units.
Prospects are there for two main reasons. First, a pipeline containing a enormous amount of revenue but a low number of prospects is risky. What happens if the high money deal falls through? The rep has nothing to fall back on to make up the lost revenue, and the entire team’s pipeline crumbles. Rather than focusing all their effort on closing the biggest deal in the pipeline, sales managers should instead think about the replacement plan if it falls through.
A metaphor I like to use when talking about revenue vs. prospects that helps to illustrate this point is weight vs. height. Let’s say I weigh 80 kilograms. Is that good or bad? Well, you can’t make that determination unless you also know my height. Just like 80 kilograms on a 800cm frame is unhealthy, having a lot of revenue spread over just a few deals should be a red flag for sales managers.
Tracking prospects can shed some light on sales reps’ bandwidth. Think about it: A deal worth 10x more in revenue probably doesn’t require 10x the amount of effort than a typical deal. Being mindful of prospects can help managers like yourself formulate a benchmark number of deals that one rep has the capacity to work at any given time.
(3) When are deals removed from the pipeline?
Every rep knows to remove a deal from the pipeline when the customer buys from a competitor, or flat out says they aren’t interested. But what about the prospects that express interest and then go quiet? Reps often keep these deals in the pipeline for months and months, hoping that they can restart the buying conversation eventually.
However, while it’s fine for salespeople to check in with these prospects occasionally and try to rekindle the flame, it’s not okay for sales managers to allow these deals to stay in the pipeline indefinitely. To ensure you’re looking at a healthy pipeline, define a purge time-line (somewhere in the neighbourhood of 30 days) and enforce it.
After a deal hits the 30-day mark with no activity, the manager should move it out of the pipeline and into a “deferred” bucket. Placing the deal into the “deferred” category allows the rep to continue working on it but doesn’t affect the overall accuracy of the sales pipeline and not included in the regular day to day expectation.
Pipeline management is one of sales managers’ most critical tasks and by asking these few questions, you can ensure a healthy pipeline that lays the groundwork for blowing revenue goals out of the water on a consistent basis.
The views given herein are solely for information purposes; they are guidelines and suggestions and are not guaranteed to work in any particular way.
Robert Gonye is a Business Growth Expert and Influencer. He writes in his personal capacity. Comments and views: [email protected]
