By Tom Fournier
Having a sales pipeline should be a given for any sales representative and monitoring pipeline health should be an absolute for any sales manager. It should be, but it seems it is not. It reminds me of the old joke/adage, “the problem with common sense is that it is not that common!”
I can still clearly recall being a young sales representative and being concerned about my personal lack of production. I worked really hard at trying to drive some new sales but nothing was happening right away. I doggedly worked at it and then after a period of time it seemed that everything was magically converting all at once! Now I felt I was hot. I had it made and I could cruise for a little bit. Can you guess what happened next? The sales tapered off and once again I found myself in the doldrums of poor sales activity.
As time went on and my role shifted to that of a sales manager, I found myself coaching sales representatives. I often shared an analogy that I came up with to explain the importance of a healthy sales pipeline. That analogy was one of a garden hose.
If you turn on the water to a garden hose, do you see water coming out of the far end right away?
No. It takes time for water to begin to fill up the hose and to work its way through the hose.
Is it a full stream of water coming out of the end once you begin to see some water?
No. It begins as a trickle and as the hose continues to fill, the output of water gets stronger and stronger until it is finally at full flow.
When you turn off the water to the hose, does the water stop flowing out of the end right away?
No. The full hose has momentum and water will continue to flow for a period of time slowly tapering off until it no longer flows.
This is an easy visualization that is very much analogous to sales production and a sales pipeline. It takes a lot of activity and effort to begin achieving some results. As these results ramp up it is easy to deceive yourself that you are now a productive sales representative. But easing off in effort and activity will mean that sales start to slow down. They will not stop right away; like the garden hose there is still inputs from previous actions driving activity but it will continue to decline and whither without any further activity or effort.
Monitoring opportunities and activities in a sales pipeline is a good way to ensure that there continues to be effort and activity that will result in future sales success.
Some additional thoughts around pipeline management for a sales manager:
I once heard a senior manager say, “make sure it is a pipeline and not a pipedream”. If what is being measured is the size of accounts or number of accounts in a pipeline, it may give you false positive signals of pipeline health. Are the opportunities being actively worked and advanced through the stages in your sales process? Are the projected sales values being adjusted as the sales representative learns more about the customer and the true nature of the opportunity? What kind of updates are being reflected? Comments like “in process”, “pending” and “waiting a decision” are updates for the sake of doing an update and often do not reflect actual work on the customer.
Watch out for the miracle sales closes: one call and a major sale is achieved. Generally, this means that a sales representative is not actively working within whatever sales pipeline tool you are utilizing. They have not entered an opportunity. You cannot work with them to watch the opportunity progress through the various stages in your sales process. You cannot trouble shoot on the “closed, no sale” opportunities because these are not reported. This does not reflect a positive sales representative/sales manager relationship.
Be aware that a poor pipeline is not necessarily to be interpreted as poor performance and a cause for immediate discipline. Is there something in your customer acquisition strategy or the solutions that you are selling that is not helping create sales opportunities? Are there some skill gaps in a what might otherwise be a high potential sales representative that can be corrected with training or coaching?
Sales pipelines are just one element to selling and sales management but if managed properly it can be a critical element!