How accurate is your corporate pipeline?… here are six reasons why your pipeline may not reflect the true position of your potential sales… and at the end of this post… the consequences for the corporation for it not being accurate.
1. Targets get Set Against Size of Pipeline
It is in the sales reps interest to have targets as low as possible and never more so if accelerators are paid after targets have been achieved. Many sales reps have a genuine fear, backed by evidence, that if the company sees large pipelines they set targets accordingly, therefore restricting the potential earnings. Solution – don’t put all deals in pipeline and then only put them in the pipeline when they are about to close. Even then some deals are not put in the pipeline and they just appear as sold deals – commonly known as ‘bluebirds’!
2. Too Few Deals will get me Fired
Many sales organisations believe there are only 3 things that sales reps need to do to make their number… activity, activity and activity! Therefore, if the individual is having a difficult time filling the pipeline they will leave dead deals in to show evidence of activity. These deals will be added to the factored forecast and the numbers rolled up. As long as there are deals in the pipeline the sales rep believes he wont get fired and has a chance to recover… buys him time to find deals or buys time to find another job.
3. Reputation for Losing Large Deals
If the sales rep puts all his large deals in the pipeline as soon as he gets wind of them and they don’t progress then he believes he will get a reputation of losing large deals. Therefore, these large deals get put in a slate as possible and if they go away then they don’t count against his stats.
4. Being Asked too Many Questions
Another reason for not putting large deals in the pipeline is that they attract too much attention. The corporate officers get seduced by the ‘dark side’ and start to speculate the positive impact the large deal will have on the business and the deal becomes the focal point… it must be closed! Therefore this deal is top priority and so the boss starts asking questions. His boss then also gets in on the act and phones directly for updates… and then his boss also calls… and soon every top officer in the company is on the case…. It’s all unwanted attention, unwanted pressure and unwanted expectations.
5. Forecasting too Large a Number
Most corporate pipelines have percentage probability of closing against each stage in the pipeline. The pipeline stages reflect the sales process and as the deal progresses it attracts a higher percentage and this percentage is multiplied against the order value to produce a factored forecast. Do this for all deals in the pipeline and then you have the sales forecast. However, large deals in the pipeline provide skewed forecasts which appear too high and will provide the wrong expectations. With factored forecasts you are not committing close any deal, just report where they are in the sales process and the factoring does the rest. The sales reps resolution to this problem is move the deal back in the pipeline to a smaller percentage or another way is to reduce the real value of the deal so again reducing the factored value.
6. Losing Control
Sales reps often look at their customers as personal customers. They have developed the relationships, they have their reputation on the line and they make sure they deliver value. If they build these relationships then they will keep selling to the same customer irrespective of the organisation for whom the sale rep is with. If they move on then the rep takes the personal relationship with them. Therefore, if a rep is thinking this way then they will not share all their long term deals… just in case something happens and they need to move on… the deals will go with them.
Corporate Consequences
For most of the above the consequences of not seeing the deals mean the real size and complexity of pipeline is not known… resource planning will be more difficult to do… true position of potential sales not known… and ultimately the corporate decision making capability is compromised.
In the case where rogue deals are left in the pipeline then … management time will be taken on reviewing deals that are not real – sales rep will be vague in answers… big hole coming in corporate number towards end of quarter as these deals will either die at the end or be shown to slip – they won’t close… and it will be too late to take corrective action.
Where deals are being manipulated to show the right forecast number then these compound the problem of not being in control… their real value and real position are not known… and again the corporate decision making capability is compromised.
Another consequence of the corporate pipeline not being used is that there will be many individual pipelines developed for personal use and the corporation in reality is run on many different types of pipeline most of which is for private use only. Standards and accuracy will be different per individual pipeline… and most if not all will be based on Excel. The corporation only wants one pipeline, but because they only want one pipeline they will have as many as the number of sales reps they employ… complete opposite and no control!
Finally, because the corporate pipeline is not accurate and because of the way it is manipulated the reps development needs are not highlighted. Losing big deals early is an indication of poor qualification or lack of account penetration. Afraid to answer questions may mean the rep does not know and therefore not in control. They need help with managing deals… but if you can’t see it you can’t help. All reps need to be able to fill, manage and close their pipeline… and you should be able to see from their pipeline where they need to focus their time… but you wont get this help from the corporate pipeline… however, I do have the answer… but more on that later!
- Colin Wilson, FirstBorder.com
To date I have not posted from another blog. The reason is not important, but for the first time I was compelled to send my readers to another brilliant mentor. Here is the start of her post, and I insist you go read the rest.
Beyond Value: How to Become Invaluable to Your Customers
As sellers, we’re continually told to sell value and to let our prospects know about all of our value-added services. After all, that’s how we’re going to win the sales. Right?
Not necessarily. Value is relative. It’s in the eye of the beholder. So much depends on how the decision makers you’re dealing with perceive “value.” And even then, selling “value” may be totally ineffective – or not enough to make the difference.
To be successful in today’s business environment, you may need to become invaluable to your customers.
Basically customers can be segmented into three different types based on their perceptions of value and what you can do to increase your sales effectiveness when working with them.
Continue reading “Beyond Value: How to Become Invaluable to Your Customers” »
Jill Konrath, author of Selling to Big Companies, helps sellers crack into corporate accounts, shorten sales cycles and win big contracts. She is a frequent speaker at national sales meetings and association events. For more articles like this, visit http://www.SellingtoBigCompanies.com . Get a BONUS Sales Call Planning Guide ($19.95 value) when you sign up for the Selling to Big Companies e-newsletter.
Intent; what is the prospect’s objective and what is their perception of how to get it done? So often a sales rep does not bother to investigate the inner workings of the prospect’s plan, and in the best of scenarios, ends up overwhelmed by an onslaught of objections. More often they find themselves on the merry go round of call backs and wishy washy answers. What may have prevented one of these frustrating outcomes? What could we have taught of budding sales champions to do?
When you are trying to understand the goals of particular purchase or acquisition, it is wise how your prospect sees it working. Ask them simply how they plan to do what they are trying to do! It seems so basic, but more often than not, a sales rep is afraid to uncover these facts. There is this assumption, that if they do ask the questions that will teach them about the prospects perception, it may turn out there offering is not going to work out. GOOD! It is better to find this out early, instead of starting an opportunity and working through the process of selling something to someone who cannot or will not use it.
So, how do we uncover this information now that we have learned who we are dealing with and what they are trying to do? Here are some example questions to ask:
1. How did you realize you could use (Your offering; in these questions, stick to the general offering, not your company in particular).
2. What do you think buying (your offering) will accomplish?
3. What challenges will buying (your offering) address?
4. If you purchase (your offering), are there any problems you do not see it addressing?
5. What particular company’s (offering) do you think best matches your requirements? Why?
Asking these questions will educate you on what you have to accomplish to obtain a customer. In most cases you will uncover some misconceptions about the industry, your product, and your competitors. This will give you an unbelievable amount of data for building a value proposition that allows your prospect to understand your positioning. It also cleans out the people you have no chance of working with. Again, some of these questions may seem intimidating and direct. I assure you that using them will cost you a bit of your opportunity pipeline, but those are the deals least likely to close, and will end up taking up the most of your time. Build the courage to ask these questions and narrow down the field of the people you are ready to work with.
Loyal readers and community. I wanted to remind everyone that the blog has moved to coachingsaleschampions.karlgoldfield.com. What does this mean, and how will our subscribers continue to get their feeds?
1. I will continue to forward from the old blogger site until 2/10/2008
2. I will send an e-mail invite to the new list to everyone left on the old e-mail list 2/05/07. If you registered to receive e-mail in the last two weeks you are fine.
3. I will fire up the new wordpress site on 2/10/2008
4. The old blogger site will have one post remaining that simply sends people to the new site.
So, if you have not already done so:
1. Change your e-mail or feed by deleting the old one and signing up again.
2. Go to Technorati, Stumble It, Digg, etc… and refav or relink to the new URL’s.
3. Accept my sincerest thank you for your patience as this blog grows up.
All of us here at Coaching Sales Champions appreciate your readership and look forward to your continued support.
Delivery: 10
Before I begin this review, GO BUY THIS BOOK RIGHT NOW!!! If you have not read it, you should. If you do not like reading tutorials on selling, this is the book for you. Instead of having the author talking at the reader, in High Probability Selling, Jacques Werth and Nicholas E. Ruben instead choose to tell you a quaint story about a struggling sales representative that is hired by a packaging company and is taught their system. The book is barely 200 pages, and if it were not for the oversized font on the small pages, it may have been less than 100. The majority of the book reads like the dialog of a play. It is two people talking about sales, then eventually a sales rep and a prospect conversing. These factors make it an unbelievably easy read, yet in this simple format and short story, THEY DELIVER AN AMAZING SET OF PROCESSES FOR BECOMING HIGHLY SUCCESSFUL.
Concept: 8
The only reason their concept did not get a 10 is that it was designed for a saturated industry where tendencies lead to working with middle management. It did not lend itself to working in two of my favorite roles.
1. Start-ups or emerging technologies – To completely relate to the story in this wonderful book, you work in a saturated market where the prospect understands what you are offering and your unique positioning. It leaves no room for education of evangelizing. While I can see that they may have trainings facing these markets, or may argue that the high probability prospects will already understand if they are really high probability prospects, I suggest that their style would have to adapt to a process that allows for teaching.
2. Working with the top level executives in major corporations –I would say their frank style, accompanied with the mindset of letting the prospect disqualify themselves at any stage would fare well with the executive prospect. What I think would not work is the simple prospecting style of asking what they have is something they are interested in or not. The top executives will not be listening. Without grabbing their attention with DATA, or RELATING SUCCESS WITH PEOPLE THEY CARE ABOUT, you can more or less forget working with them.
Message: 9
Here it is in a nutshell, and I almost feel you should not be allowed to read my opinions before you read the book.
1. Only work with people that are trustworthy, willing to work on your terms, open up and share information, and allow you to talk to all of the people involved in the decision making process.
2. DISQUALIFY EVERYONE ELSE!
3. Make sure you treat your prospects as people. Get to know them on a personal level, before, during, and after the sales engagement.
4. Work with authenticity. You cannot work this process if you do not sincerely want to learn about the people you are prospecting. You cannot work this process if you are not trustworthy.
5. Before you move from one stage to another in the process, review the conditions set to get there. They call these the Conditions of Commitment and the Conditions of Satisfaction. If you truly engage with people in this manner, you will close AN AMAZINGLY HIGHER PERCENTAGE OF YOUR OPPORTUNITES!
Again, the message is fantastic. I have a couple of concerns about the abruptness in the language. While, I know it is merely examples, the harshness in the style will turn off many people. My suggestion would be to adapt the philosophy of the communication, but make the style a bit more embracing. Always allow for prospects, opportunities, and potential customers to opt out of the sales process, but do it in a manner that shows them a bit more respect than the dialog in this book.
For the younger sales person here are two important points. It is critical to remove the “pitch” from your sales habits. This is one of the greatest lessons of this book.
1. If you have to convince someone that what you are offering is what you say it is, you are dealing with a low probability prospect.
2. Everyone slips up, even the most talented and experienced of people. Michael Jordan shot a few air balls and had some turnovers, Tiger hits balls into the rough, Bill Clinton puts his foot in his mouth, Rosie fails as a magazine mogul, and you will screw up and slip back into bad habits. So what, move on.
Overall score: 9
READ THIS BOOK, READ THIS BOOK, STOP READING MY BLOG AND DO READ THIS BOOK.