As we close out the first quarter of 2013 its likely that the entire senior leadership team is giving the sales pipeline a really close inspection. After all, the success or lack thereof in Q1 really sets the sales stage for the rest of the year at many firms.
How does your sales pipeline look today versus the end of 2012? Many firms are surprised to see that a significant number of deals have started to age, some to the point that they are likely a loss or no decision. Why are deals stalling, or worse, being lost to competitors or no decision? They ask themselves, How could a pipeline that looked promising just a few month ago decline so quickly?
The answer may be surprising because as a CSO or sales leader you could be the core problem.
If your sales process allows sales reps to self-select sales targets they may be pursuing the wrong prospects. Reps are accustomed to hearing from their management teams that their pipelines are not big enough and so they pursue opportunities in the wrong sectors or those that have a low probability of success. They focus on the quantity of prospects or pipeline dollars rather than finding prospects that fit your companys sweet spot.
Another practice that leads to a bloated pipeline is setting an arbitrary target for what should be in the pipeline and when. If you hire a new sales person and state that they need 5X their annual quota by their 6th month on board they will be driven to achieve that goal. This approach definitely skews your sales metrics and conversion statistics and wastes a tremendous amount of time sifting through the pipeline to determine which targets actually merit sales time investment.
Two Steps to Escaping This Pipeline Purgatory
First, take the time to profile your perfect prospect. By understanding which types of clients you have had the most success closing and servicing you can focus your sale teams on similar prospects. Which industries or vertical markets have you been successful selling into? Is there a revenue size range that is a strong fit for you? Trying to win the mega deal is a nice dream but you cant bet the entire company on winning one or two deals.
Second, consider moving the lead generation function under marketing if its not already there. Building a lead generation and qualification process under marketing will allow you to provide the sales team a steady flow of pre-qualified prospects of the right size and in the right industries. The process also ensures that your sales resources are focused on high value activities such as final qualification and proving the value of your company.by