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Sales Pipeline: How to Build a Transactional Pipeline

November 7, 2020 / Comments (0)

sales-pipeline

A CEO’s corporate life depends on them…sales vice presidents, directors, and managers are routinely fired because of them and salespeople have to prepare them.

Welcome to the world of the sales pipeline.

A sales pipeline is your company’s revenue lifeline — it’s both a forecast and a snapshot of where each prospect is in the sales process and what deals are likely to close, in relation to each salesperson’s quota.

As a young salesperson, I was always hounded by my over-exuberant sales managers to produce a sales pipeline that showed I was worth the salary and expenses I was paid…and to justify the existence of my sales manager and director, who put in endless hours to qualify and validate each and every prospect that I had painfully entered into the manual card system after hours of cold-calling and face-to-face prospecting.

Back in those days, sales management was brutal — you could either “sell” or you couldn’t and sales managers were quick to remove you from your desk, which was simply viewed as a revenue and profit center and they didn’t care who occupied the seat behind that desk…only that it performed in line with the company’s sales expectations.

While I didn’t like the style of sales training back then, I did learn a lot as to how to manage a sales team and I would come to put that learning into practice when I ran my first company at twenty-five, building revenues from a standing start to over 6 million UK pounds in 2 years and later, when I ran my main technology staffing company and grew sales from zero to $60m in 6 years.

The success came down to many factors and of course I had a very talented team of salespeople in both cases, which I must add that I trained in the main, from scratch, preferring to teach my own sales methodologies rather than work with experienced salespeople, who would bring with them their own systems and also their baggage!

But one of the main factors was my rigorous system of sales pipeline management.

Over the years in both my own companies and the ones I have mentored and coached, I have seen sales pipelines that look impressive at the first glance, but when you drill down into each prospect, there is a lack of substance…or as I term it, a lack of prospects that are going to transact with the company.

A sales pipeline must be a transactional one.

I use the term “transact” rather than “close” because I do not believe you ever need to close a sale — if you have to do so, then something has gone wrong during the process.

The best salespeople influence buyers by having a systematic process that starts with a compelling value proposition, constructed through detailed research that compels the buyer to buy from them, rather than an aggressive all-out sales process that requires a “push” at the end to get the potential customer over the line.

They also work with their target companies at the highest executive levels and once they engage at this level, deals are far more likely to be concluded or not because they are dealing with key decision-makers.

Many sales pipelines are unfortunately full of prospects that need to be pushed over the line and that is why many sales quotas are not met and in some cases, with disastrous consequences.

You can read more about my overall sales philosophy in this article:

“Sales Training: The Ultimate Guide to Help You Become a Key Influencer.”

Sales pipeline stages

sales-pipeline-stages

 

There is nothing more satisfying for a salesperson than taking a totally cold prospect to a paying customer…and then retaining that customer for the life of the business.

I used to explain to all of my trainee salespeople that this is the #1 goal of every salesperson because you get to go through the full sales lifecycle from prospecting, influencing, transacting, and then managing and developing.

In broad terms, these are the stages of the sales pipeline and it amazes me why some people feel to over-complicate the process by adding unnecessary layers to it and this is not helped by some of the complicated sales CRM systems that allow you track and manage each and every interaction of the sales process.

But I know many salespeople who spend as much time managing their CRM systems in order to satisfy management as they do selling.

Sometimes less is more!

So let’s go through the stages:

Prospecting

The first interaction with a potential customer is vital if you are going to set the scene for a transactional relationship but it is essential that you contact the right people in your target organization and at the right level from the start.

Dealing with some of the world’s largest technology companies, I always started by contacting the executive leadership team from the start, because they were the ones who could make the decisions and they would tell me right from my first interaction with them if they were interested in what I had to offer.

The process takes longer than working lower down in the organization, but the results are far more certain.

But you also need to do your homework and conduct research about your market, customers as well as keeping an eye on the global economy.

The more information you have, the better your chances of overall success, and you also need to be aware that you will have to work with other members of the organization in order to validate and prove your value proposition, which of course takes time, but for me, it was worth it with the size of the deals that were concluded at the end of the process.

Too many salespeople operate at the wrong levels and that is where the process can go wrong — many of my prospects were unqualified by my sales managers in my early sales career because I was talking to people who could not have made the decision to buy from me and I was simply wasting my time, as well as theirs!

When you approach companies at the right level and through detailed research, you will have a much stronger potential pipeline…but be warned, it takes a lot of work and effort.

Influencing

Once your prospect is entered into the pipeline, then you can start the influencing and not the selling process.

There is a vast difference between influencing your prospects rather than simply applying the sales tactics that many sales trainers and leaders advocate — today’s buyers are far savvier than ever before and they can spot sleazy sales tactics in a heartbeat.

If you follow my methods, you will be approaching companies at the most senior executive levels and then will be “sponsored” by them to work with other business units and their people…but these people will require hard data to support your business case which is where your ability to handle all types of sales situations, including social ones, will come into play.

The influencing part is really about using your communication skills to deliver a “no-brainer,” compelling value proposition that has the buy-in from all parties concerned.

You need to map out the process carefully and make sure you do not miss people in the organization that can help deliver and support your business case and here, many salespeople focus on one person or a small group of people rather than going wider through their target companies.

Some salespeople are fearful of this approach worrying that the more people involved in the decision-making process, will lead to more potential problems, but I have found the opposite — it created far more opportunities for me, but it does require that you have done your homework and research to ensure your proposition is in line with your prospects needs.

Transacting

If you have progressed through the first stages, then you will have a much stronger chance of success and matters will follow their natural course.

This approach is rarely understood by many salespeople as they desperately try to move through the stages to get a signature on a piece of paper to close the sale.

I have found that if I approach the key decision-makers first, and then work systematically through the rest of the organization, I will have a much greater chance of success — the initial people will have mentally “bought-in” to my proposals from the first interaction otherwise they would not allow me to progress any further.

Managing and developing

Now that you have the deal, or even if you have lost it there is a process to manage and develop the account.

In my early sales career, I would not spend enough time on this vital aspect as I was too busy trying to hunt for more deals, which is why I would lose accounts and especially if they had not bought from me in the first place.

If they haven’t bought from you then you have to go through your entire approach and that will often mean you have not spoken to the right people from the start.

With my system, if you get through the initial prospecting stage there is a very strong chance you will conclude the deal…and it may not be in the initial time frame you expected or it may occur months down the line because your timing was off, but by talking to the right people from the start, you will know if there is any interest immediately.

For the salespeople who sell at lower managerial levels, you will always be reliant on them having the authority to sign off the deal themselves or if they have to get further approval, you will be reliant upon them to present your business case which is not as effective as having you being able to present it.

In today’s tough economic climate, it is becoming more and more common for board members to sign-off on the smallest of deals.

Sales pipeline management

sales-pipeline-management

 

If you are a CEO, sales leader, and your sales team is working in the way I advocate, then you will be able to instantly look at your sales pipeline with far more confidence because when you are working at the highest executive levels there will be a lot of activity following the initial engagement or relatively nothing.

And once the activity gets underway, it is easy to check and follow the process all the way to the conclusion and if you are a salesperson, you will have a ton of prospecting activity initially, but then you will start to build a funnel that will lead to a ton of sales…but it may take you some time to get the activity moving, which is natural when you are working at the higher levels.

However, if you are working hard and consistently at the front end, then you will reach a tipping point and you will soon gain momentum.

I am not and never have been a gambling man and unfortunately, some of the sales managers, directors, and vice presidents I have met and worked with would have had more luck in the casino betting on a straight “red” or “black,” than they had with the integrity of the sales pipelines that they had put their names to.

I look at a ton of sales pipelines in my coaching and mentoring capacity and the first thing I do is to look at the seniority of the contacts in the companies concerned.

In one example and this was for a major international company, I could see that there was not one C-suite executive in any of the salespeople’s contacts.

The sales quota was not being met and decisions were slipping away from each projected time-point.

My advice was to get the top salespeople to immediately focus on moving up the value chain and while it may reduce the pipeline in sheer numbers of active contacts, there would be an increase in quality that would eventually shine through.

It was more or a pipeline “cleansing” activity that worked beautifully — as well as increasing the value of the contacts in the system, it unlocked some hidden opportunities that would never be uncovered from working at the lower levels, and with a bit of creativity, some major deals were concluded.

As a sales leader, you will be directly responsible for the integrity of your company sales pipeline and your CEO will be dependent upon it — as will your company shareholders, investors, or potential investors, so it is vital that the pipeline is accurate and reflects the true position of each and every customer.

As a former sales-focussed CEO myself, I needed to know that my sales pipeline was real and it would deliver the revenues that I had projected in my business plan, which played a critical part in the cost of our specialist cash flow finance that we required to operate the business.

I once had a situation where one sales director was failing to deliver the results as projected and this was purely down to pipeline management — the salespeople were projecting numbers that were not being met and as a sales-focused CEO, my role was to travel around the globe and meet our existing and potential customers at the highest executive levels to develop business and I relied heavily on the sales teams in the offices to deliver the business I had secured.

I replaced the sales director and within a couple of weeks we were reaching the original projected numbers which meant that they were always there, but needed to be flushed out — this was achieved by a rigorous analysis of the sales projections and reducing the sales pipeline by around forty percent!

By weeding out those customers who were unlikely to transact with us we were able to laser-focus on those who would and the rationalization process led to immediate and profitable results.

I urge each and every sales leader to do the same.

Operating and managing a sales pipeline should be a simple process if it is approached in the right manner and for me, it begins by making the right contacts at the right level in your target companies.

From there is it a matter of following a logical, systematic process where the company can validate your business case and matters can come to a natural conclusion hopefully benefitting all parties concerned.

Neil Franklin

neiljcfranklin@gmail.com

Neil Franklin-Entrepreneur

Last modified: November 7, 2020

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