IS YOUR SALES PIPELINE TELLING YOU THE REAL STORY?

How many times have you walked into a showroom to investigate what you might buy if only you could afford to? Many businesses conduct speculative evaluations. These will only ever be theoretical purchases in that they exceed any available budget or real pressing business need. Regardless of how much sales effort is employed by the vendor, they will never close. Nevertheless, it is often difficult to exclude such "window shopping" evaluations from a vendor's sales pipeline. Do your sales executives have the tools to identify them?

Even when conducted to solve a real business problem with sufficient available budget, many evaluations involve a not too short "short-list" of potential vendors. Furthermore, an astute purchaser will try to keep their options open right up to the last possible minute. Today's business environment inevitably means that all but one vendor on a typical short-list for any real deal will end up being disappointed. At best, only one vendor is ever going to win the business. The rest have unfortunately overstated their sales forecasts and wasted their valuable time chasing deals right up to the end, deals which were probably never going to close their way.

How many future disappointments lie within your existing sales pipeline? Have you a method of mitigating this risk and plugging the potential holes? What is the realistic potential yield from your sales pipeline? Take any typical prospect campaign. Ask the three people most involved or dependent for their opinion on its likelihood of closure: the sales executive, the sales manager, the finance director.

In the absence of adequate systems and procedures, there is a strong likelihood that each will give remarkably different answers. (If you were also to ask the prospective customer the same question, you can bet that they will give you a different answer again).

So, what is the right answer? How can you become more accurate? How do you ensure that a sales executive's evaluation can be substantiated by evidence or events which demonstrate forward progress in a deal, thereby justifying a higher probability of closure of one deal over another?

Of course, a proprietor can overcome this problem by personally getting involved in every significant business opportunity, and thereby becoming familiar with all their intricacies and complexities. Such a proprietor will inevitably have a pretty good handle on every prospect and an opinion on their probability of closure. However, beyond a certain size of company, such an approach may not be feasible or even reliable.

Every company goes through typical pinch points in their growth cycle. As the business grows it generates more issues to be dealt with on a daily basis than the existing hierarchy can efficiently resolve. Consequently these hurdles often coincide with the introduction of new tiers of management.

Reliable and predictable sales performance is an issue for any entrepreneurial proprietor. It is usually one of the key areas of the business that the proprietor is most reluctant to give up in the day-to-day management of the operation. Nevertheless, as a company grows there comes a time when the proprietor is simply far too busy on other strategic issues to attend all sales reviews in person, and has to hand over the reins of the sales function to a dedicated manager.

How do you implement a sales system appropriate for your business? Many entrepreneurial proprietors have little first hand experience of best practice in the sales industry. Few have hands-on experience of the systems and processes employed by the worlds leading sales-focused companies. These systems are used because they are known to work.

They enable management of the day-to-day issues from a distance, they enable delegation of the day-to-day running of the sales function. They enable sales managers to take the necessary steps to ensure that a pipeline of prospects will generate as predictable a revenue stream as possible. A pipeline on which the rest of the business can rely for effective cash flow management, efficient utilisation of resources, and accurate reporting to stakeholders and investors.