In early September I suggested that an analysis of your existing sales pipeline was necessary to begin the 2010 revenue planning process (Time Helps No Sale). It was no doubt a painful process, as some of your sales reps tried to convince you that dead or dormant opportunities were still viable. Based on your decisions, many of your opportunities may have been moved to unqualified status and returned to lead nurturing phase.
It is also likely the value of your unidentified pipeline increased dramatically – but at least you gained a good understanding of the size of your challenge, and (hopefully) made sure the proper investments in your sale force were included in the 2010 operating plan.
Those of you that completed the process were likely well positioned to take on a 2010 sales growth number that is achievable with the resources and sales force investment dollars you fought for. For those of you that did not complete that exercise but have already agreed to your 2010 sales goal, it’s very late in the game but perhaps not too late to have a fighting chance at meeting your 2010 commitments.
First, it’s critical to remove All opportunities that have exceeded their shelf life. If your average sales cycle is 3 months but you have proposed opportunities that are 6-9 months old, you should realize the probability of those opportunities closing is almost zero. Kill them or send them back to nurturing. After those deals are removed from the pipeline you now need to apply a basic revenue factoring approach to the remaining opportunities. A conservative approach is to count on 30% of the revenue associated with qualified opportunities that are proposed and in a closing stage. This approach makes allowances for your actual close rates as well as deals that come in below the original forecast. You can now calculate your revenue “go get” by subtracting your factored revenue pipeline from your 2010 revenue objective. Seems complicated, but our Revenue Planning Tool helps you with all the calculations.
Now that you have a good handle on the size of your challenge it is time to determine how to allocate your sales and marketing resources. Four rules:
- Make sure that your marketing team is aligned with your mission and you are providing them ongoing feedback.
- Focus your activities on those high probability environments that fit your capability sweet spot.
- Ensure that you articulate your differentiation in a way that sets you apart from your competitors.
- Now is also the time to make the tough call on marginal new opportunities. Pursuing unqualified opportunities wastes valuable resources and may actually cause you to miss an opportunity that is winnable.
Finally, as a sales leader part of your responsibility is to make sure your entire organization is involved in the selling process. Use the resources of your executive and operational teams to convince and close prospects, a commitment from the top may be the difference between a win and a loss.