Tag Archives: sales pipeline

Pumping up your Sales Pipeline

by: Christian Maurer

I still have to meet the sales executive who is happy with her/his pipeline. When you ask them for the reason of their concern, the answer usually is: “it is not fat enough”. How do they know this? Obviously from experience. They know that only a fraction of the deals they and their people are currently working on will be won. The rule of thumb often heard in the High Tech Industry is that one out of three deals is usually won.

The obvious thing to do, is thus to make the pipeline fatter. To pump it up by finding new deals to enter into the pipeline (Prospecting and Lead Generation). As sales people function best when they see monetary rewards for their activities, you might beef up your campaign for pumping up the pipeline with some extra incentives and you set a goal on the number of leads you expect from each individual. This makes perfect sense following the principle that you can only expect what you inspect and what you pay for.

Chances are that sales executives taking such a decision have just shortened the tenure in their current position. Let us see how this can happen.

If you are in a business where the sales cycle (Lead to Close) is some 6 to 9 months, the action you have undertaken will bear fruit at best after the time it typically takes to get a deal through the pipeline. So this action will not be of any help if you are faced with the risk of a short fall already in the next quarter.

Worse yet, you might just have changed your rule of thumb. If you do not have a rigorous qualification process in place which determines when a lead can enter the pipeline, your lead to close ratio might actually worsen. There is a high likelihood that you get the number of leads you have asked for. Your risk is that they are of lower quality and thus a smaller percentage of them can be won. If that is not bad enough, it can come worth. Depending on your Forecasting process, these lower quality leads can also beef up your forecast. The changes to make this forecast are though slimmer than usually due to the lead quality problem discussed before.

There is yet another aspect that can lead you into trouble applying your rule of thumb. If the deals you and your people are working on are not evenly distributed in the pipeline, let us say a higher than usual proportion is only expected to close within six months, then your feared short fall for next quarter will be even more horrid than anticipated.

The reaction to correct a too thin pipeline as described above is human. I see it a symptom of what I call “Sales Executive’s Tunnel View”. I will tell more about this phenomenon in one of my next entries. A further entry will then be dedicated to the question whether the pipeline is a good metaphor to describe our list of deals we are working on.

For a quick measure to prevent you from “Sales Executives Tunnel View” may I suggest that you have a closer look into your pipeline and then apply the principle “try to get more from what you have”?

Christian Maurer, The Sales Executive Resource, is an independent sales effectiveness consultant, trainer and coach. He has a proven track record of helping to increase the productivity of large, global B2B sales organizations.

For the last 10 years Christian has consulted and coached hundreds of sales executives and managers on how to plan and execute their sales strategies by focusing on process management rather than trying to manage results. To assist the management in the execution of their strategies, he also has taught and coached their sales teams to increase their productivity by advising them on how to improve conversion rates and potential deal size with opportunity management, identify more deals and how to best approach potential buyers with account management, how to leverage marketing for their sales campaigns and how to orchestrate their activities with partners.

Assessing the Quality of your Sales Pipeline

By Kevin Steffey

We are nearly 1 month into the second half of the year.  How are you feeling about your chances of meeting or exceeding your sales targets? 

How strong is your sales pipeline?If you are like many sales managers, you rely on the quality of the information provided by your sales professionals on your pipeline of business opportunities.  However, the pipeline as represented by your representatives is often filled with opportunities that are in varying levels of quality. A thorough review of you pipeline can either validate your confidence or give you an early warning of areas to address.

  1. Are there enough prospective opportunities entering the sales process or currently in the process?  Review the business that is currently in various stages of your sales cycle and apply your typical close rates, sales cycle and average deal sizes to see the value of business currently in your pipeline that has a chance of closing this year. Also, look at the volume of new business entering the pipeline on a weekly basis to assess how much you will add to your pipeline and close in the upcoming months.  Often the biggest hurdle to meeting your sales plan is having enough business to work and keeping a strong eye on the lead generation sources to ensure proper flow of new business.
  2. Are the right types of deals in the pipeline?  A common challenge for sales managers is keeping the team focused on working on the right opportunities – not just the easiest opportunities.  Review the pipeline to see if the mix of business is skewed to less profitable product lines or customer types?  Also, looking at the average deal size in the pipeline is critical to ensure that your sales assumptions are valid.  Test the values put in by your sales professionals.  Are they in line with typical deal sizes or are they inflated? Is there a trend you didn’t expect with the sales price or profit margin being pressured by competition or market dynamics?
  3. Is the business moving through the pipeline at the proper pace?  As you review the opportunities with your sales professionals, are the identified next steps with each opportunity occurring when they say they should?  Do the same opportunities keep showing up week in and week out at the same stage of the sales process? It is important to make sure that your percentage of opportunities moving from one stage to the next is not fundamentally changing from your assumptions.

As you compare the results in each of these areas across your sales professionals and against your norms, you will have a strong sense of how confident you should be in your plan.  As you identify your outliers, those reps that are struggling to add the right type and quantity of business and move it through the sales process, you can start to take corrective action and work with those team members to adjust as needed to hit targets.

Kevin Steffey is President of Naviga Recruiting & Executive Search, a national Sales and Marketing Recruitment firm.  Kevin and Naviga have a passion for sales and marketing positions due to their direct impact on the growth of their customers. Check out www.navigarecruiting.com to engage a partner in growing and developing your team.