Building and maintaining a healthy sales pipeline is the key to success in achieving your sales goals.
In this post I break down 3 rules for BUILDING AND MAINTAINING A HEALTHY SALES PIPELINE.
- Rule No. 1 – Always Be Prospecting
- Rule No. 2 – Spend More Time With Better Prospects
- Rule No. 3 – Be Your Own Sales Manager
There is no silver bullet or magic pixie dust that’s going to do this for you. I absolutely love and respect the work my Marketing brethren does, I just don’t believe that there’s a single Marketing campaign or Inbound Marketing program that will build and maintain a sufficient enough pipeline for a business. It’s a collective effort between both teams, but is Sales doesn’t engage the prospect correctly and frequently enough, leads likely won’t convert themselves.
RULE No. 1 – ALWAYS BE PROSPECTING
The minute you stop prospecting for new business is the minute your pipeline starts to dry up.
I always treat my prospecting time like a meeting with a huge opportunity. I mean a big one (arms open wide), one that could maybe be my quota for the quarter.
The general rule of thumb for effective pipeline management, ensuring you achieve your sales targets, is to: KEEP YOUR PIPELINE 4x YOUR QUOTA. This is essentially the goal behind all your prospecting. No one bats a thousand so you have to make sure you account for deals to stall or drop out all together.
The logic behind the 4X rule assumes that if you close 25% of the business in your pipeline, you’ll hit your sales target. This can be different for everyone based on all sorts of factors.
I worked with a startup that needed to 6X their pipeline to be in a position to exceed their growth target. We did an analysis factoring in conversion ratios, win rates, etc.. In the end we determined that realistically, their pipeline was going need some serious work.. FAST. 4X would likely leave them shy of their target by several million of dollars.
4X is a general rule of thumb and getting there can be tough to maintain, especially in highly-transactional businesses. In these models, you tend to close or lose deals faster than you can add new ones. This furthers my point for the importance of making time to prospect each day.
For the record, when I say “prospecting” I’m not talking just about “cold calling”. In my future posts, I’ll be sure to lay out my advice for “Professional Prospecting”. For now, I want to focus the message on the 4X rule of thumb and why you should ALWAYS BE PROSPECTING.
Now remember this, and it’s a very important point. I see reps do this all the time… Getting comfortable and feeling good about where they’re going to end the quarter because they have a bunch of “stuff” in their pipeline. This is why you have to make sure you’re working with the “right” prospects..
Do not shoot for a 4X pipeline, blindly. The 4X rule assumes you’re adding only QUALITY DEALS WITH REAL POTENTIAL to close.
NOTE: “ALWAYS BE PROSPECTING”, first starts as a mindset. You have to ‘want’ to prospect. You have to see it as the most important part of your success, because it is! We can’t even talk about techniques and strategies until you wrap your head around this.
The #1 reason salespeople fail is because they have anemic pipelines. And you know what the cure is? Always be prospecting.
RULE No. 2 – SPEND MORE TIME WITH BETTER PROSPECTS
All that prospecting you do everyday is pointless if you’re not focused on the right prospects.
Effective but subtle pre-qualifying is vital if you want to spend more time with prospects that are more inclined to buy from you.
Bad deals in your pipeline will result in wasted sales time that could have been spent with prospects that fit your Ideal Customer Profile (ICP) and/or developing deals that actually have a chance of closing.
The reliability of your sales forecast is impacted by this in a big way. You’ll end up with an inflated pipeline and a false sense of security, if you’re not qualifying your deals effectively.
To make sure duds don’t creek into your pipeline, use some sort of qualification framework. Most people that I know are familiar with B.A.N.T. Budget – Authority – Need – Time-frame. This is an effective (and timeless) method to help assess if you’re working with a good prospect.
Whatever framework you go with, just make sure you stick to it and hold yourself to doing a sniff test with each and every deal.
RULE No. 3 -BE YOUR OWN SALES MANAGER
Prospecting professionally everyday and being disciplined about who you spend your time with requires a lot of hard work and focus. All that work is for nothing if your not able to depend on your sales pipeline to consistently forecast your results accurately.
This comes down personal accountability which you can do by asking yourself the tough questions:
Here are some examples to try that I’ve picked up along the way:
- At what level are you dealing in the prospect’s organization?
- Do you have an internal coach?
- Do you know exactly what your path is obtaining a Purchase Order (PO)?
- Is there a compelling event or some sort of leverage driving the purchase?
Something else to lookout for in your pipeline is when all your deals are scheduled to close on the last day of the month/quarter. This is a red flag for Sales Managers (depending on your business model). It tells them that you may not have a firm grasp on your deals. It implies a high probability of “slip-age’ (when deals slip past their scheduled close date). If you see this make in your personal pipeline, get real with yourself, make the necessary adjustments, and take action.
The last point I’ll make on this is: “Hope” is not a strategy. I don’t recall exactly where I heard this for the first time but once I heard it, I stuck. Besides, it’s hard to forget when you hear reps say, “blah… blah… blah.., I HOPE IT’LL CLOSE IN TIME”, all the time in pipeline reviews.
Hold yourself to a hire standard going forward and I promise it will help you forecast more accurately. Also, once you have a clear picture of what it real in your pipeline, you’ll have a better idea of how much more prospecting you need to do to get your pipeline back to 4X your target.
The wrap up..
To Build and Maintain a Healthy Sales Funnel there are 3 simple rules you must follow:
- Always Be Prospecting – If you don’t, your pipeline will dry up and there won’t be anything to close.
- Spend More Time With Better Prospects – Or you’ll lose precious sales time that you can never get back.
- Be Your Own Sales Manager – Because holding yourself accountable is truly where success in sales lays.
I break each of these rules down in a bit more detail in the below video clips. I hope you check them out. They were originally posted to the Instagram page (@3Link_Sales).
To reach 3Link, just click here and we’ll get back to you right away.
See you soon,
Derrick Williams, 3Link Consulting LLC Founder & Principal Consultant/Trainer