Do you have a sales pipeline?
We’re not joking. It’s a serious question because
- not everyone has one (that they set up and officially track, at least), and
- some businesses will say yes, but they’re referring to their sales funnel!
It’s important to be sure of the difference upfront, because we’re going to discuss some sales pipeline challenges you may have. So –
Your sales funnel is like a game of Tetris, where potential customers are sorted and filtered based on their fit with your company’s offerings. Be selective as you fill the funnel!
Your sales pipeline, on the other hand, is like a relay race, where the baton moves intentionally in a certain way at a recognizable speed until it crosses the finish line. Monitor its progress!
This pipeline is what we’re interested in here.
Is Your Sales Pipeline Unhealthy?
At 360 Consulting, when we assess a client’s sales capabilities, we’re often stunned by the poor quality of their sales pipeline!
We can generally count on finding one or more signs of an unhealthy sales pipeline. These include:
Stale Opportunities That Have Been in the Sales Pipeline Way Too Long, Depending on Your Sales Cycle
Sometimes this is due to neglect or sloppiness. More frequently, though, it comes from salespeople holding on to a deal for dear life and clinging to hope when the opportunity has
- been on life support for months and
- should be retired from the pipeline.
Salespeople are notorious for “stuffing the ballot box” with opportunities so that it appears they’re quite busy and engaged. The truth is that only a few of their opportunities have real activity or any real chance of closing.
Deals That Have Been in the Same Stage of the Sales Cycle for Too Long
Sometimes deals get “stuck” in a certain stage of the sales process and need to be either
- moved along within a given time frame or
- removed from the pipeline.
This can happen even with legitimate opportunities, as sometimes the timing simply isn’t right. The deal should, instead, be brought back into the pipeline at a later date.
Deals That Don’t Fit Your Strategy, Marketing Direction, or Ideal Client Profile
These are your original sales funnel unsuitable Tetris pieces – and more common than you think!
Again, frequently, this happens because salespeople figure that something in the funnel to move down the pipeline is better than nothing. They’re wrong!
Let’s say your company sells software into the logistics, distribution, and retail markets, with a minimum deal size of $500,000 to meet your annual sales targets.
So – why are there printing companies, plastics manufacturers, and $75,000 opportunities in your pipeline?
Deals That Don’t Enhance Your Brand or Are a Poor Cultural Fit, or Deals That Have a Poor Chance for Long-Term Success
Sometimes salespeople like to “think out of the box” when it comes to finding new prospects –and generally that’s a good thing.
But it can get out of hand at times. For example:
- If you’re a high-end media firm with a stellar reputation, maybe selling to casinos and online gambling sites is not for you.
- Similarly, after some time working with a prospect during the sales cycle, it may become apparent that there simply isn’t a cultural fit, and the companies may not be successful working together going forward.
In addition to cultural issues, sometimes the financial or legal terms and conditions can handicap an opportunity to the point where neither party will be satisfied with the relationship.
And, if a prospect does get into financial or legal trouble or become at risk of not being able to pay you, it’s better to part ways sooner than later before you make significant investments or sign contracts.
Do any of these signs of an unhealthy sales pipeline sound familiar? Here are five things you can do to fix the problems.
5 Ways to Get Your Sales Pipeline Back in Shape
1 Hold Your Salespeople Accountable
If an opportunity has been around for a while, ask tough questions to find out the true nature of the activity level and the client relationship.
If you’re not convinced the opportunity is real and can close in a reasonable time period, out it goes!
2 Have a Sales Process and Enforce It
Having a sales process with defined stages and steps is a must. Then
- track how long each opportunity has been in a particular stage and
- make sure your salesperson understands the steps required to get it to the next stage.
If those steps can’t be met in a reasonable time period, it’s time to move on (we call this the “up or out” philosophy).
3 Have Discipline Early in the Qualification Process
If a potential prospect doesn’t fit your ideal client profile or strategic direction, you probably realized that from the outset!
Salespeople,– and even sales leaders and senior executives – frequently fall into the trap of saying, “Well, we don’t have much going on right now, so let’s take a flyer on this opportunity to help fill our pipeline.”
However, the time and money you invest in chasing a one-off opportunity would be better spent researching, marketing, and networking to find bona fide prospects that will be good customers, long term.
4 Have Solid Sales Operations and Reporting Tools in Place, and Demand They Be Used and Kept Current
Although you may slip up on this from time to time, investments and discipline in this area return a huge ROI.
Find a CRM that works for your business and size of company and make sure everyone uses it.
This is essential because prospects and opportunities that are not in the tool don’t exist!
So – tie sales commissions and compensation to proper use of the tool to enforce good habits. Accurate data entry and keeping data current are paramount.
5 Recognize and Reward Good Habits
This is key across the board with sales, sales leadership, and senior management.
Salespeople want to spend their time working on real opportunities with a real chance of closing, so the sooner they learn the disciplines of
- time management,
- deal qualification, and
- accurate reporting…
…the better they will perform.
Likewise, it’s up to management to lead by example, and to recognize and reward good pipeline management habits for a healthier sales pipeline.
We Can Help Make Your Pipeline Fit and Healthy!
Need help evaluating your sales pipeline? Or did any of the above observations strike a chord with your organization?
At 360 Consulting, we’re passionate about helping you break your sales records. And we’re easy to work with! Schedule a consultation today.