I have had an interesting week spending time with a sales team and focusing very strongly on the principles of developing and managing a Sales Pipeline. I was delivering a three day sales workshop covering all aspects of the sales cycle from Pipeline Management, Building Rapport, Tactical and Strategic Questioning, Benefit Propositions, Overcoming Objections, Closing and Account Management.

However, it never ceases to amaze me how much attention the Pipeline Management session receives within any Workshop. It’s not like the sales organisation isn’t managing it’s customer base, isn’t using measurements or doesn’t focus on getting deals on the table….they do!

There is just something about Pipeline Management that makes it so engaging. Having reflected on this for a few days, I think there are many reasons why it resonates with sales people. It is a strategic tool that aligns to the business objectives, yet is very tactical in that you can escalate deals and activities at a micro level too. It is very operational rather than theoretical, and as such it has direct influence on a salespersons targets, commissions and by default their bonus.

However, the reason I think it is so powerful is that a Sales Pipeline is a living mechanism that evolves into a new picture of reality every single day. That picture becomes so visual, and as such, points the way forward so clearly that there are ‘aha’ moments going off all over the place.

There are many types of Pipeline Management, in fact I also use one to manage my own business and link it to my cash flow, but here is the one I introduce to sales teams on my Sales Workshops.

At the top of the funnel you enter your opportunities. I define these into four categories but theoretically you could have others. They comprise:

1. Suspects – people you have never spoken to before and have no idea of their needs.

2. Cold Prospects - people you have spoken with before but for whatever reason they have never done business with you

3. Warm Prospects – people who have done business with you in the past but are not current customers (e.g. dormant)

4. Customers – people with whom you are currently doing business and need to retain or obtain increased penetration

After you have identified all your inputs you need to identify the Decision Makers (DM’s) and the decision making process. Many sales people make the mistake of not fully understanding all the roles and relationships within a customer opportunity and selling to the wrong person. It sometimes takes time to really understand how it all works, particularly in larger accounts.

The third step is pre-qualification, or with existing customers re-qualification. This is your opportunity of asking those 4-6 critical questions that determine whether or not you want to pursue the opportunity. These questions could focus on size, location, buying behaviour, credit history, and so on. The key is to get a ‘tick in the box’ against each criteria so you can confirm that YOU want to do business with these opportunities.

The next phase is the face-to-face meeting or the booking of a telephone appointment. With field sales it would be normal to make an appointment, but so many telephone based sales teams fail to see the benefit in setting time aside in their diaries to have telephone appointments. Not only does it give you time to plan, but it gives a formality to the process and thus makes it easier to move away from price and product.

The next few steps mirror the normal sales process and includes undertaking a needs identification, benefits proposition, negotiation and finally a commitment which leads to an order, booking, contract or whatever.

So there you have it. Eight steps to effective Pipeline Management.

But what about understanding my ratios?

As a salesperson I should know where every opportunity is within my pipeline but I should also know my ratio for each step. What is my ratio for contacting suspects and pre-qualifying them? 1:1? 2:1? What is my ratio of turning each opportunity into an appointment? 3:1? 5:1? What is my ratio for turning each appointment into an opportunity to present a proposal? 2:1?

The ratio game continues all the way through the pipeline until you can answer the fundamental question. How much activity do I need to take before a deal falls out of my pipeine? 30 calls….10 appointments….5 proposals? This data is critical for everyone involved in the sales organisation. The sales manager can identify blocks, identify coaching opportunities, identify benchmarks and best practice. The salesperson can identify which opportunities are going to contribute to their targets and forecast more effectively. The marketing leader can obtain direct feedback on the quality of suspects and prospects going into the pipeline. So it’s a win/win for all concerned.

Of course there is much more behind each of the steps but as a generic model, this has always been well received by my customers.

So my question to you is this……do you or your sales team overtly manage an effective pipeline, and if so, what are your ratios?