At Mansfield, we understand the desire to carry the entrepreneurial, DIY spirit that’s inherent in any start-up over to the sales processes. It’s also natural to want your sales consulting firm to be integrated into your sales organization.
We do this by helping them answer four critical questions about the sales pipeline:
- Is the pipeline well distributed?
With pipeline development, you want a well-distributed set of potential customers. By well distributed, we mean that you have customers in various stages of the purchasing cycle, with close dates that range far enough out that you know roughly when you’re going to hit your numbers, at least for the next few quarters if not for a full year.
- What is the sales cycle?
The way you measure a sales pipeline depends on the duration of the sales cycle, and each client’s sales cycle differs. So if it takes a year to close business, you probably have a pipeline that goes out on a rolling 12-month cycle. If you’re closing business quarterly, you may only have a 6-month pipeline.
- What are the stages in the pipeline?
A typical pipeline at a technology company is somewhere between five and six funnel levels, ranging from qualified lead to closed piece of business. It’s important for your sales organization to develop some objective metrics for moving things through the pipeline to close.
- What’s the whole story?
The goal of active pipeline management is to be able to see deals not only entering the pipeline, but also as they are moving along. Over time you’ll have a view to many different funnel levels, which will give you the confidence that you’ll hit your numbers whether you measure them monthly, quarterly or annually.
Once we got through the questions on the best way to build a pipeline, we got to the bonus question: the tech executive asked me if we could adopt the start-up’s already-proven pipeline methodology.
I knew what he wanted me to say. He wants a single pipeline methodology. But we don’t take a one-size-fits-all pipeline approach, because it doesn’t work, particularly for a start-up. While I didn’t say no, I told him that we would develop a pipeline methodology that applies to his particular situation—his targets, his sales cycle, his business goals.
Because when you’re trying to break into a new market, your current approach may not be the best one. Let’s say your product or solution would be perfect for healthcare, but you’ve never sold into healthcare before. Even though you’ve sold into technology and financial services, you don’t know for a fact that the sales cycles and pipeline stages in healthcare are consistent with those tech or financial services, so you may be missing some steps and losing out on sales.
I told the executive that he could get to one pipeline methodology…eventually. But first, we would need to understand what the pipeline should look like based on the market he was targeting and then we would give him the tools he needed to make adjustments to his existing pipeline methodology so he could accommodate this new market.
Your sales pipeline is important. But at the end of the day, whether you’re working with a partner like Mansfield or doing it yourself, the goal is to close business.
So the most important question you should ask about your sales pipeline is: “Does it help you generate revenue?”
Editor's Note: This post was originally published in September 2013 and has been updated for accuracy and relevancy.