Last week’s column on Sales Process Planning generated plenty of reaction – seems a lot of folks are deeply engaged in that very planning process as we move into the new budget year.
So, honoring the requests of the many of you who wrote in, we’ll spend the next several weeks looking more deeply at some of the assumptions that drive revenue models, offering some guidelines in thinking through your own budget realities.
This week we’ll explore the issues around sales pipelines: the decisions to be made about pipeline building and how those choices impact initial investment, time to close, and, ultimately, revenue.
It ought to go without saying that any salesperson needs customers to sell to. It’s obvious to even the least business-savvy observer that a hoard of prospects clamoring to buy a given product produces one kind of sales situation, and an unknown product without any clearly defined prospective customers results in another situation entirely. Yet, for some reason, many companies neglect the issue of filling a sales-leads pipeline, assuming that to be the responsibility of the sales force.
Sometimes the sales force is the best resource for generating leads – where the prospective customer is readily identifiable by easily observable criteria (“Only 200 businesses in the world have a need for our technology, and we know them all,” or “Every consumer at this street fair is as likely to buy our cold drinks as another’s”).
More often, however, there is some definition of customers likely to be better prospects, and some screening process is useful in building that list. The screening criteria may be readily apparent (“Find every advertiser who has invested ad dollars on sports sites”) or may require self-identification by the prospects (“We want to find every agency that prefers to buy on a revenue-share basis”).
In the first case, where a list must be built internally from publicly available data, it’s frequently left to the sales force to invest the effort in list building. If you choose this course, however, you may be wasting time and money.
Do you really want your expensive, persuasive, experienced sales professionals spending their days cajoling receptionists for contact names in the media department? Should this highly compensated individual be quizzing entry-level gatekeepers as to the suitability of the prospect for your product? Or would that person be better used actually selling pre-screened prospects: companies already identified by your own junior employees who, working from scripts, are cherry-picking the best potential customers for the top sales folks to sell to?
If you invest in marketing programs (for example, trade shows, direct mail, trade publication advertising) to bring interested prospects to you, those leads still have to be screened. Are they solid leads or tire-kickers, advertisers with budgets or the mildly curious hoping for an education in Internet marketing?
Once again, a carefully crafted screening questionnaire in the hands of a well-trained sales trainee can be the least expensive way to build your leads database without wasting valuable sales-pro time.
Every business needs to look closely at its likely sources of sales leads, at the ease or difficulty of effective lead screening, and at the salesmanship required to get through to decision makers. We are not proscribing any one answer here.
But we are strongly suggesting that some serious attention to the building and maintenance of a large and well-qualified sales lead database will lower selling costs, increase close rates, and keep your best salespeople most motivated and productive. To ignore this step in process planning is to invite overly high selling costs and demoralized sales personnel.
Next week, more details on pipeline building…