Let’s get right to it and start with an amazing post by Tibor Shanto. In his post, “Selling to procurement“, he clearly explains the futility in these efforts. There is no magic way to get purchasing agents to think about anything but price, and with the economy floundering, they become much more powerful. He suggests working higher up the chain, and I could not agree more. Personally, I only prospect or network with VP’s and C-level executives.

Now for Colin and his superb post on Pipeline Management. If you do not know Colin’s work, he runs http://firistborder.com and developed the product Focus. I have written on it extensively and really love his style. This post is hilarious as he likens the all powerful pipeline to the all elusive Holy Grail. Wee bit on the severe side, but that’s Colin for you.

One parting note: Things are really starting to gel for me in the blogosphere. Between twitter, messageSlinger, ki work, and my other clients, life is what I have always dreamed it could be. None of this, and I mean none of it, could have happened without the people reading and supporting this blog. Today, I say you are brilliant and I thank you.

Karl Goldfield

startup sales mentor

Messaging: You can leave it, if it is the right one. Part 1 – No flashing lights! »« Messaging during a coffee break: Self promotion – Let’s get the message out

Colin’s Corner: The 6 Fears of Using the Corporate Pipeline

Posted on January 31, 2008 by Karl Goldfield.
Categories: Colin's Corner, Forecasting, Pipeline.

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

Sales Training: Objection Handling – Listen for queues and objections are our friends »« Jill Konrath makes one unbelievable point

Colin’s Corner – Forecasting – let the reps do it.

Posted on July 31, 2007 by Karl Goldfield.
Categories: Colin's Corner.

Following on from the theme of my last post, I can safely say sales are the life blood of an organisation. Whatever its size, an organisation must sell in order to survive and the primary responsibility of its directors is to deliver growth and increased wealth to the shareholders. Shareholder return is delivered through dividend payments (from profit) and, more importantly, through an increase in share value.

It is the market that sets a company’s share value and the price is determined not only by profit, but also by confidence. It is not unknown for the share value of a company to increase even when they are making a loss. The reason for this is predictability – the directors achieve what they say they are going to achieve.

When predictability is so highly valued, making more money than forecast may be perceived as being as bad as not reaching stated targets. Companies often increase their forecasts if they are having a better year than expected because they don’t want their year-end figures to be higher than predicted. Conversely, organisations also downgrade their forecasts if things are not going as well as expected. Basically, the directors of the company need to demonstrate that they are in control. This is no different to sales people: they must also demonstrate control over their forecasts.

Each month and, more importantly, towards the end of the quarter, the sales professional puts forward his or her best guess as to where he or she will be in relation to their target when the quarter ends. As part of this prediction they may well also name one or two deals that they believe are crucial to them. These are often, if not always, the largest deals they have.
The data is then taken from the corporate pipeline and fed to the sales manager, who will manipulate it and feed it to the sales director or VP of sales. In turn, the head of sales will manipulate it further and feed the data, as a forecast, to the CFO and CEO. Even for a bad looking quarter, thanks to a chain of manipulation and wishful thinking, the figures at this stage will appear less grim than they really are. This allows the VP of sales to explain that with a fair wind they should just be able to turn it around and make the number.

However, when the quarter’s number is not made they can fall back on the fact that they said it was going to be tough and needed a fair wind. Hence the forecasting becomes difficult. The psychology of what’s happening is simple. People want to keep their jobs and believe that admitting that they’ll miss their quarterly target is not the best way to do that. It therefore makes the whole forecasting proposition difficult and the responsibility is taken away from the sales rep and put firmly in the hands of the managers – this is wrong. Sales reps must learn to live or die by their forecasts and once they have learnt how to do this, and the managers have learnt not to fiddle, then forecast accuracy increases and by definition more deals begin to close.

Building a sales plan: Execution Part D- Opportunities – Developing the Gold Rush(Not fool’s gold) »« Coffee Break Pt 1 Finale – Part 2

Colin’s Corner – Wealth Creation – luck or practice?

Posted on July 25, 2007 by Karl Goldfield.
Categories: Colin's Corner.

In the widest possible context, the wealth of a nation is totally dependent on the ability of business within its community to sell their products and services, just as every job within every business is totally dependent for their existence on the sales function’s ability to sell. The sales function is equally totally dependent on the sales ability of each and every member of the sales team. If these individuals do not perform then the organisation does not perform and in turn, if organisations do not perform then the nation does not perform. Do or die. However, it is unlikely that a nation will die due to lack of performance of business… there are too many good businesses to let this happen, but what would happen to the nation if each business could increase their results by just a few percentage points. What effect will this have on the nation’s Gross Domestic Product? Obviously sales success is dependent on many factors, but no matter how well an organisation covers these other factors, if their sales function is less than effective then the organisation will not be effective. Effectiveness is measured in terms of each individual salesperson’s ability to close business – to get the deal. Therefore, it can be argued that the wealth of a nation is dependent on the skills of a relatively small number of people’s ability to win business – so many people dependent on so few. Given this dependency, it is very surprising how little attention is given by business to developing the individual skills and knowledge of their sales force and in turn how little effort is made by sales professionals to hone their own skills. A nation takes pride in sports success, in the success of their performing artists and in the success of business. If we look at both sports people and performing artists, we will see that each individual takes responsibility for their own success… they practice their skills for hours a day to perfect them so that when they have to perform they are at their best. They will push themselves to be the best. However, in the business world it is totally the opposite… very little training is undertaken; rehearsing before an important event – such as a sales presentation – is unheard of and rarely will an individual take the responsibility for developing their skills and knowledge. The attitude is, well I’ve done that training course, tick the list and move on. Many sales mangers or VPs in businesses also tale the view that they employ senior people who don’t need training… crazy, just plain crazy! However, what would happen to business and the nation if sales professionals were to take the same pride in honing their skills just as the sports professionals and performing artists do? Would we see that percentage rise in results… yep, I’m sure we would. Therefore, I suppose the final word should go to Gary Player, the South African golfer who said “The more I practice the luckier I get.”

-Colin Wilson

LI Question: What should I do since people hate cold calling? »« The start of Colin’s Corner – A collaborator and sales trainer

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Why I love Teambox

Brilliant – A new find in Tibor Shanto and a steady favorite in Colin Wilson

Colin’s Corner: The 6 Fears of Using the Corporate Pipeline

Colin’s Corner – Forecasting – let the reps do it.

Colin’s Corner – Wealth Creation – luck or practice?