Sept. 2006 The Sales Pipeline - The Triumph of Hope

Some of you, I know, are still recovering from the summer. Whilst the long summer evenings with a cool breeze and a glass of wine are now just a pleasant memory, the 30 seconds of abject terror whilst accompanying the kids on a roller coaster will still seem like yesterday.

However, I suspect that those of you responsible for managing a sales pipeline would happily exchange any number of death defying drops and heart wrenching spirals for a review of the sales pipeline. And those of you, who like me, find yourselves looking at fresh pipelines all the time will view them with the same mixture of amusement and horror that I do.

Why?

Because, except with a very few honourable exceptions, the sales forecast is usually a curious mix of fiction, wishful thinking and self delusion.

If you know me well, you will be aware that one of my key attributes is a positive outlook and a belief that people are generally strongly motivated. But when it comes to sales forecasts - well; maybe not.

The objective of a sales forecast is to provide the salesman with a view of what his production is likely to look like in the short, medium and long term (and therefore his earnings). In turn, this allows him to brief management who can then plan resources which may include finance, production and even additional sales resourcing.

It is in everyone's interest therefore to ensure that a sales forecast is as accurate and meaningful as possible. And yet in nine out of ten forecasts that I review on behalf of clients, the numbers are fantasy and I wouldn't want to plan a trip to the shops based on them, never mind about try to run my business.

So why the difficulty?

Well the first and most obvious reason is that the salesman (whose job is absolutely measurable) fears that if his boss finds out what his pipeline is really like he will be fired! Secondly, promises have been given and commitments made.

Rather than admit that the field circumstances have altered; the salesman, like Mr. Micawber, sustains a myth in the hope that something will 'turn up' to fix the problem.

Thirdly, assessing the true status of a pipeline means having to ask some difficult questions. (Has the budget been cleared, have you got authority to buy, has the FD agreed to go ahead, has the strategy been signed off etc. Etc) There is an understandable fear of stirring the pot before the brew is ready, and so the forecast remains unchanged even though facts on the ground may have moved on.

Because sales people are the most measurable of all employees, they are also the most vulnerable. And if you are reading this thinking smugly of your own forecast, perhaps you should consider whether it really is as sound as you think.

Managing the sales pipeline - there must be 5(0) ways to find another! (With apologies to Paul Simon)

1. Look at when the opportunity was first identified as a prospect and compare it with the current date. If the discrepancy is greater than one and a half turns of your sales cycle "then make a new plan Stan!" (i.e. if it normally takes 4 weeks from enquiry to order and this has been an enquiry for 6 weeks, forget it!)

2. Look at the movement on the account. If there has been no contact, no meetings are planned and no e-mails or phone calls are scheduled, "drop off the key - Lee"

3. Look at the reality. If you are selling say, Computer Maintenance, how likely is it that BP is REALLY interested in your services. If, in the cold light of dawn this is just wishful thinking "slip out the back - Jack"

4. Look at the recent transactions on the account, are they moving ahead (clarification of features, pricing queries, concerns about certain clauses in the contract etc) or are they transactional, (need to consult with the budget holder, Board meeting next month, presentation early part of next year etc.) You need to be coy - Roy"

5. Take a look at the next action point. If it is an unstructured call or meeting, then there has to be quite a good reason not to “hop on the bus Gus”.

To assess a sales pipeline accurately you should have a template which sets out the stages of your typical sales cycle and assigns weightings for deals that are at the various stages. For your free copy of a generic Sales pipeline tool, click here.

One of the first jobs that any incoming sales manager has to undertake is a review of the outstanding pipeline. There are numerous reasons for this, not least so that he can assess just how large a mountain he has to climb.

It follows therefore that whenever I am commissioned by a new client, it is vital for me to review the sales forecast to see what we are really up against.

Monitoring the pipeline may be a chore but in my view if you’re in sales then this is an essential professional discipline and one which needs to be mastered.