Does this conversation sound familiar?
Sales Manager: “When do you expect to close the deal with ABC?”
Sales Person: “Next month for sure.”
One Month Later…
Sales Manager: “I thought you were going to close the deal with ABC this month.”
Sales Person: “Definitely next month.”
Another Month Later…
Sales Manager: “What is happening with ABC deal?”
Sales Person: “Couple of problems… going to be next quarter now.”
Sales Manager: “So when is the ABC deal expected to close?”
Sales Person: “Definitely before Christmas.”
Sales Manager: “This Christmas?”
If you manage long sales cycles, you may be familiar with conversations like this. Conversations that nobody wants to have.
These conversations can be avoided with some simple – but often overlooked - pipeline management skills.
Ultimately, every sales person wants to know:
How can I shorten the length of sales cycles and convert pipeline into business?
I am frequently asked this, and the answer is always:
You cannot always shorten the sales cycle; you are subject to the plans of the customer.
You can apply controls to pipeline management that will help you:
- Understand when a sales cycle is likely to close
- Identify actions you can take to move the sales cycle forwards
- Decide if a potential sale should be included in your business forecast
High-value pipeline may assuage the conscience of underperforming sales people, but inaccurate or over-optimistic forecasts can lead to sales leaders making decisions that aren’t right for the business.
If you’re a sales leader, account manager or sales person, you can use these three controls to help manage your pipeline:
1: Check the Stakeholders
When it comes to dealing with those who influence the buying decision, you must remember one key truth: people like dealing with people like them. IT sales people like IT stakeholders, bankers like financial stakeholders technical sales people like engineers.
However, when you hear…
“It’s all approved! We’re just waiting for sign off”,
remember that this means someone else is now selling your proposition to a stakeholder, without your input. Why isn’t it you asking for senior sign-off?
Challenge this and excuses come thick and fast:
- The boss will not see me
- It is with the board
- XYZ does not want me speaking to the directors
These excuses only show that you do not have a relationship with all of the stakeholders. Consider these two questions:
- How could you put a forecast into pipeline if you are only dealing with one of four stakeholders?
- Why would you want someone else selling your proposition to someone you do not know?
2: Decision Factors and Buying Motives
Every stakeholder will apply personal criteria to the decision making process. Think about:
- Decision Factors: these are ‘must have’ criteria that your proposition must fulfil for a decision-maker to say yes
- Buying Motives: emotional forces that influence decision-making. These are often irrational but it’s critical to know them, especially if the impact of a decision could have a positive or negative impact on a stakeholder’s role
The appeal of more responsibility, a bigger role or financial reward can all influence the likelihood of someone saying yes.
You can’t accurately put your forecast into pipeline if you don't know the decision factors and buying motives of each stakeholder.
3: Manage the Dates
Every sales cycle should feature three dates, agreed by you and the customer:
- Live Date: the date the customer will begin to use your products and services
- Decision Date: the date the customer will make a buying decision (usually 4-8 weeks ahead of the Live Date)
- Proposal Date: the date you will provide the customer with a proposal (ideally, 4-6 weeks ahead of the Decision date)
These dates are key to managing a sales cycle because they help you to establish a timetable, control the pipeline and gauge customer commitment, and identify when sales revenue should be included in a forecast.
Realistically, how can you put forecast into pipeline if you are not working on a timetable agreed with the customer? What good is a forecast based on assumptions?
Of course there is much more you can do, but applying these three controls to your current pipeline will already improve things.
If you want pipeline forecasts that you can trust, and reliably report back on, try it!
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Brett Lyons is an international leadership consultant who has converted 35 years of sales experience into a range of eLearning tools that deliver real-world results. He is a training expert who specialises in coaching motivated leaders to drive their teams to success.