Building a Sales Pipeline for Success
The sales pipeline is probably one of the most misunderstood and misused elements of a business - and I don’t mean just for startups! Many large organizations live and die by their pipeline rarely admitting that at least half of the opportunities are little more than creative fiction. For smaller organizations, it is the false prophecy that the pipeline spells success through the sheer amount of data. The good news? A well-managed pipeline will provide great insight into the direction of the company and allow you to truly understand the sales process. So, let’s get moving:
- A pipeline should only have opportunities that are truly qualified. If your pipeline is made up of prospects or worse, suspects, that you think represent potential business - get rid of that junk.
- Those are only contacts that you can manage within your CRM and marketing - they just aren’t opportunities (yet!).
- What is a true, qualified opportunity? I use BANT to qualify for an opportunity. Budget, Access, Need, and Timeline. These are individual elements that ALL need to be satisfied to be considered a true opportunity. There are a multitude of qualifying methodologies: RAIN, BAM, and so on. While somewhat different, their basis is the same - to establish an opportunity as real.
- Budget: Does the client have a budget for the project?
- Access: Am I speaking with the decision maker or key influencer?
- Need: Does the client have a true need for your offering?
- Timeline: Has the client established a timeline for executing the project?
Why spend so much energy qualifying an opportunity? It’s very simple – if your foundation is strong, so too is the structure above it! A pipeline doesn’t mean anything if it is filled with unqualified opportunities – that is just noise.
Now back to those qualified opportunities. The great news is everything past that point is all about execution – which is a very repeatable sales process. Take an opportunity from Discovery to Proposal and then Close! Now let me blow away a few misconceptions:
- A client meeting is nothing more than a meeting. It doesn’t mean anything unless you have qualified an opportunity.
- A demo falls in the same bucket – it doesn’t mean anything. Hint: this is where Need really applies. Does your offering satisfy a need for the client? If not, there is no opportunity!
While executing an opportunity, keep an eye on the expected close date. This will indicate that an opportunity is moving through the sales process, or not. By the way, remember BANT? The last element is Timeline. That is your indication when an opportunity should close. That in turn helps you to forecast the revenue. Yes, timelines move which is okay as long as you are getting feedback from the client. If you are seeing opportunities with old close dates that are stuck you have a choice – unstick them or get rid of them!
Finally, the close. There is nothing better than Closed/Won! Entrepreneurs are generally opportunistic – which means they are very resistant to consider an opportunity lost. There is an old sales adage that applies – a quick no is as good as a yes. Why? You won’t expend precious resources on a dead opportunity and can instead focus on others. Better, if you are truly managing your pipeline you will be able to really understand what it takes to close a sale. How many prospects breaks down to a number of opportunities which ultimately yields a ratio of closed deals. Sales is a highly repeatable process based on those numbers. Understanding that represents a solid pipeline and a path to success – good luck!
Want to learn more? RSVP today for Derrick's online workshop on March 17th.