Last time we talked about Sales Qualification as a key component of the sales process. This time we will look at Pipeline Management.
The first aspect to consider is the sales pipeline itself. As you gather names you will end up with a range of prospects at different stages of evolution. It will help you if you can track each prospect at each stage so that you keep it moving, hopefully with some momentum, in the right direction. The typical stages you would track (with potential likelihood of success) could include:
- Target = 0%
- Contact established = 10%
- Positive meeting = 20%
- Tender submitted = 30%
- Negotiations/discussions = 50%
- Verbal o.k. or email = 75%
- Purchase order/contract = 100%
By way of example, if you have moved a target to stage 5, you may well believe you have a 50-50 chance of success, so you allocate a 50% factor to the value of the work i.e. a £3,000 contract would be ascribed a value of £1,500 at that stage. If you do this for your entire pipeline list of names you can not only track status and action required, but ascribe a figure to your potential future cash flow.
The second aspect is conversion ratios. It is helpful to set and then, with experience, adjust how many targets you need to pursue to get the number of clients you need i.e. how many “targets” do you need to have at stage 1 to get the number of clients you need making it to stage 7.
The third aspect is having some mechanisms for dealing with sales that seem stuck somewhere in the process. Andrew Sobel talks about “6 preconditions to create a buyer”:
- The client perceives a problem or opportunity that is significant in size and importance.
- The client has a healthy dissatisfaction with the rate of change.
- The client believes there is a material lack of internal resource and/or expertise.
- The client trusts that you can do it.
- The executive sponsor feels that the right stakeholders have all been aligned around retaining you and utilising your approach.
- They can see tangible next steps to move forward.
If any of these preconditions are missing, then the sales process will stall. So it is always worth checking back with potential clients to gauge how present these six preconditions are.
Next time we will assume that these preconditions have indeed been met, and consider how to ask for the business.