5 –Step Plan To Fast-track Your Sales Pipeline Into New Business
Reverse-engineer your pipeline forecast so that you don’t have to rush to drag business in at the end of each quarter or year.
Every sales leader knows the end-of-the-quarter drill: the final weeks of each quarter or year and the mad rush to get business in. This puts an incredible amount of pressure on salespeople, sales leaders, and also on customers who often end up committing to a purchase before they are ready.
Can you relate to this seasonal rollercoaster? As you reach the end of a quarter, there’s this panic to get the business in. As soon as that’s done, everyone relaxes.
Then you rinse and repeat, every 3 months, with an exaggerated version at the year-end.
Now, in a sales utopia you would take the peaks and troughs and flatten them. My guess is that every sales leader would gladly sacrifice the highs of the bell-curve to achieve steady, more sustainable sales results. Flattening the bell-curve would mean you could skip the mad periods of panic. In addition, you wouldn’t have to incentivize clients to fit your timescales and you wouldn’t have to sacrifice your margin.
This in turn would hugely benefit your salespeople. In this perfect world they would be able to operate at their best without the panic and pressure from an impending cut-off point, confident in their ability to deliver steady results throughout every period.
So, what do you do?
Many sales leaders will think their sales people just need to get out there and ask for business. They simply need to take control and own their sales cycles. Frequently a sales leader will go out there with his/her sales people to help them close, mainly through incentivizing the customer to buy into their timescales.
This however, isn’t the problem. The problem isn’t that your sales people aren’t bringing in the business at the end of the quarter.
The real issue is that the business isn’t running its sales pipeline and forecasting
in an efficient and transparent manner, every quarter, month, week and day of the year.
If you’re leaving it until the end of each quarter to close the last deals, it’s already too late. Sacrificing your margin or incentivising your customers to give you commitment and fit in with your timescales is a short-term solution to the problem. In addition, if repeated periodically, this behaviour will not do much to help you build long-term, trust based relationships with your customers, new and old.
Step 1: Start right at the beginning of the quarter or year
Accurate, efficient and transparent forecasting is vital and it flattens the bell-curve.
How you forecast business at the beginning of the quarter
will dictate how you behave at the end of every quarter.
Imagine that at the beginning of the quarter you had an objective view of every opportunity in the sales pipeline.
You would have a clear view, at the beginning of the quarter, whether or not you will be likely to hit the target. That’s when you should start influencing it.
Say it’s January. You are leading a sales team of 5 people. Your target is £1M in Q1 . You’ve been working there for a year. You review your team’s entire sales pipeline. You get a clear, objective, and honest view of every opportunity, where they are in the sales cycle and the likelihood of each deal closing in the timescales specified.
With this clear and accurate information you are then poised to coach the right sales people at the right time on the right deals to make sure the whole team stays on target.
It can happen. But it needs to start on 1st January.
Now – many sales leaders don’t behave this way. They trust that their people own their patch and their target. After all, they’ve just had a hectic push closing the opportunities at the end of the year, the last thing they need now is more pressure, right?
Come 1st of January, they sit down with their team.
Leader: It’s the start of a New Year guys and we need to keep the momentum going from last year. Everyone has their individual target of 200k. Everyone ok with that?
The team: Yes.
Leader: Are we fully confident we can hit it?
The team: Yes!
Leader: Let’s get going then!
They set them free and get quickly consumed by the routine of running the business. Half-way through the quarter they notice some of the big business opportunities haven’t come in.
“That’s interesting, maybe I should speak to him / her about that deal’.
They typically start to worry at the beginning of the 3rd month.
‘Right, I think we might have a problem here. The team is 250k behind where they should be at this point.’
Then they go into analysis, looking at every deal that could be closed at the last minute. Consequently, the gradual ramp up of activity follows, and so does sacrificing the margin or incentivizing the customers etc.
What to do: Come 1st Jan, hit the ground running. No excuses.
Step 2: Build a culture of honesty in your team
It’s all well and good suggesting that accurate, efficient and transparent forecasting is the key to sales high-performance.
However, in order for this to take place, everyone needs to be brutally honest about the deals that they are working on. In other words, as the leader, you need to
build a culture of honesty around sales activity and forecasting.
Typically there are a lot of reasons why sales people do not view the opportunities they are working on or forecast accurately. Here are the usual suspects:
- Optimistic mindset helps sales people to be good at what they do, but it can work against them; especially when they need to be objective about the state of a deal and what needs to happen next to move it forward.
- Some sales people think being honest about the risks in a deal shows weakness or is a high-risk strategy as it could be viewed as them not doing their job.
- They are working to THEIR timescales and agenda, not the one of a client.
- They are interacting with the wrong stakeholders. The real decision makers are often hard to access and difficult to influence. As a result, some sales people find it more comfortable to deal with lower level client contacts. These contacts tell them what they WANT to hear, not what they NEED to hear about the deal they are chasing.
What to do: Creating an environment where your sales people are encouraged to be honest about where they are in the sales cycle is essential. So is introducing clear and objective tools to help them accurately measure their likelihood of success.
Step 3: Reverse-engineer The Size Of Your Sales Pipeline
It is true that completely flattening the peaks and troughs is a utopian idea and it’s next to impossible to think that you will be able to achieve a straight line of solid sales growth.
But this is also not where you should be focusing all attention. If you are good at controlling the deal, knowing objectively where you are, what the next steps are to move forward and how long it will take to move to a ‘yes’, – you can control your overall success against target.
Let’s be realistic though. Deals fall through, customers are unpredictable, things go wrong, budgets get rejected and companies go bust etc. These things amount to ‘acts of god’ in the world of sales. Sometimes, no matter how close you are to the customer, no matter how well you can control all the elements of the deal, something comes out of the left-field that you could never have predicted … that’s just life.
Consistent and stable sales performance is completely realistic
if you reverse-engineer it.
Say my Q1 target is 300k, 100k per month.
How many deals of an average size do I have to close to generate this number?
Let’s say 6, about 50k each.
How many quotes do I have to pull out to get a deal?
As a successful sales person, you know your ratios. When you know your ratios, you can factor the things you can’t influence. You know that if you meet enough people and behave in a certain way using best practice, and you have enough opportunities in your pipeline, any ‘acts of God’ won’t affect your overall success. Your sales pipeline will always be big enough to factor in the ups and downs that are beyond your control.
This is what elite sales people ask themselves on the 1st January:
- What’s my target?
- What do I want to earn this year?
- How many deals do I need to close and of what size?
- How many ‘acts of God’ should I expect?
- What’s my hit rate? (i.e. I close 1 in 3 deals from quote)
- What is the number of quotes I need a year?
- How many new approaches do I need a year to get to a quote?
- How many calls do I need to make per day? etc.
What to do: Look at your target and work your way backwards.
Step 4: Put in place a consistent framework of measuring sales pipeline that applies to everyone and to every opportunity.
Once you make sure your sales pipeline is set up for success you can then introduce a robust and accurate way of analyzing any given deal at any given time. This will enable you to forecast the likelihood of success.
The way to do it is to introduce
A set of fixed criteria that measure the customer’s behaviour and the sales person understanding of the customer.
Here’s how you do it:
- Firstly, put metrics around the objective stage of the deal: first meeting – second meeting – proposal – presentation – commercials T&C’s – Negotiation etc.
- Secondly, put metrics around what customer behaviours / actions you can track that will tell you they are moving forward. Think what steps do we want the client to take at each stage of the deal.
- Next, measure what your sales people know about the customer: their organisation, needs, plans etc. the more confidential the information the customer shares with your sales people the more likely they are of winning the deal. Do they fully understand the customers past, present and future?
- Finally, measure who is involved in the sale and how close the sales person is to each player. Interacting only with one of the decision making team members represents risk and a lot of work to do. Having a direct relationship with all the decision making team where they are sharing detailed and confidential information means your sales person is well positioned to be successful.
What to do: start measuring the 4 following factors: objective stage of the deal, customer actions, your knowledge about the customer and decision makers on the customer side.
Step 5: Make the information readily available and pin-point where to spend you time to get the best outcomes.
Finally, as a Sales Leader you need to ensure you have
a simple and effective way of collating this valuable pipeline information.
It needs to be readily available for you to look at and highlight which sales person and which deal needs your attention on a day-to-day basis.
What to do: use your CRM or Longley Academy’s Sales Gap Methodology to get a full picture of where the deal is at.
None of this is an exact science. You’re dealing with people and people can be unpredictable. Companies go into administration, or get sold. Decision-makers get replaced.
You could have a deal in your pipeline that is forecast at 85%, and it’s worth £1M. You are getting ready to come up with timescales for negotiation and a closing strategy. Then, out of nowhere, the company is bought out, and they put a halt to all spending.
Your sales person could be a ninja, the sales leader could be a ninja, the recommendation and the product that is on the table could be the best fit for the customer. And it could still fall out of bed.
That’s why if you need 4 of these deals to hit your quota, you make sure you have 6 of them in your sales pipeline.
- You are a superstar cause you smash your target by 50% because you never hit an ‘act of god’.
- One company goes bust, another gets taken over, and you still hit your target.
The trick is not to focus on how to best run around at the end of each quarter to bring in the business you need to hit target.