- May 1, 2005
- Posted by: Dave Kurlan
- Category: Understanding the Sales Force
We evaluated a sales force this week that had pipeline problems. Most companies have pipeline problems; they simply lack the awareness to recognize how serious those problems are. Of even more concern is how long it takes to fix a faulty pipeline.
From 50,000 feet, there can be only two obvious pipeline issues: Not enough opportunities and poor pipeline quality. Yet it’s rare when the executive team can blame lack of growth on the pipeline. Instead they site things like changing market conditions, the economy, competition, complacency among veteran salespeople, long sell cycle; and sometimes they even admit that the sales force isn’t closing very consistently. But blame the pipeline? Not usually.
We ask salespeople to choose 4 opportunities on which they are currently ready to quote or propose or one where they already did that and are waiting for a decision. We ask them approximately 20 questions about each opportunity and then we perform our pipeline analysis.
When salespeople have difficulty coming up with 4 opportunities we know there is a quantity issue. Even in a company where one huge sale per year per rep would be enough, the salespeople must be working on several opportunities. And when multiple closes per quarter, per month, per week or per day are the goal, there should always be numerous opportunities at this stage in the selling cycle.
A pipeline with poor quantity suggests possible lack of goals and plans, expectations not being communicated or executed, the likelihood of excuse making and a probable lack of accountability by sales management. In addition, I could assume that the company has salespeople who are living off repeat business from existing customers and management may even incorrectly identify these salespeople as top performers – one of my biggest pet peeves. It wouldn’t surprise me to learn that the company has selected salespeople who just aren’t wired for prospecting because their hidden weaknesses won’t support the activity. Since the pipeline should be an advance measure of whether the sales force has enough opportunities to meet future sales goals, companies must be able to rely on the quantity of the pipeline to manage activity.
A pipeline with lack of quality is quite a different issue because management cannot use the pipeline in the manner for which it is intended. The pipeline, when properly filled and filtered, should provide management with a crystal ball connecting future revenue to a future point in time. And the filtering or qualifying process should be an excellent source of material for coaching from sales management. When our analysis suggests lack of quality, it means that the qualifying being performed by salespeople and sales managers is elementary at best. It rarely includes much more than asking a question about budget and decision making, two issues from as many as 20 required to completely qualify of a prospect.
So pay attention to your pipeline and you’ll be able to take advantage it. Fill and and filter your pipeline and it will become the predictive tool it should be!