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The Power Continuum Key Tenets – Characteristics of a "Good Potential Client" Must be Pre-established; Communicated to Everyone on the Team; and Strictly Enforced by Management

One of the biggest (and most dangerous) wastes of time, talent, and energy within a sales organization is the pursuit of prospects that have no business being in the sales pipeline. This is the “spray and pray” method of sales. You talk to anyone who will listen to you..you spray your sales pitch all over the place and just pray that it will stick somewhere with someone. Yes, it’s a waste of time, talent, and energy; it’s also sloppy and unpredictable.

There are lots of reasons why a prospect shouldn’t be in your pipeline...maybe they’re not the right size (too big or too small), maybe they’re not the right fit for your company, maybe they have the wrong size budget, maybe it’s something else.

And there are as many reasons why a salesperson will chase the fringe prospects. Maybe they don’t want to say no, maybe they like the contact and want to help, maybe they’re just tired of prospecting. The thing is, if you’re chasing a fringe prospect, you’re still spraying and praying, and you’re wasting a lot of time you could be spending aiming for the right target.

So avoid the spraying and praying. Define the characteristics of a good potential client and communicate that to everyone on the team. Then hold people accountable for finding prospects that have those characteristics, otherwise known as good potential clients. Through research, conversation, and qualification, it should be decently easy to identify whether a prospect fits your definition of a good prospect. And if the one you’re talking to doesn’t fit that definition, move on. Don’t waste your time trying to make it work. It’s like trying to make a square peg fit into a round hole. And the time you spend trying to make that happen is time you could more wisely invest finding the right prospect.

This tenet reminds me of a story about my father-in-law. My in-laws were living in a retirement community. The community chorus, of which my mother-in-law was a member, was giving a concert one day. My father-in-law was in the audience prior to the concert when a woman came up and sat beside him. They started chatting and my father-in-law mentioned that his wife was in the chorus. The woman looked at him, sighed, “Ohhh,” and got up and moved. She was definitely not spraying and praying – she had defined her target prospect and it wasn’t a man whose wife was still around! She perhaps didn’t have a lot of time to find the right one, so she certainly wasn’t wasting time on the wrong one!

Similarly, that’s how it should work with sales. Once the right prospect is defined, you can be very focused and spend time aiming for the ones that fit that description. And when that happens, some other things happen: time is well spent, success is more predictable, and your pipeline is more productive. Ready to stop spraying and praying?

jkl

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If You Lost Your "Lucky Strike" Could You Replace It?

 
I love the AMC show "Mad Men" about the 1960's ad agency in New York.  On last night's show, the agency lost an account they've had for 30 years - Lucky Strike cigarettes.  Smoking and drinking are staples of the show (and were staples of the 60's culture) so having a big cigarette account was a big deal to an ad agency.  

When the agency lost the account everyone went into crisis mode -- they immediately moved to secure their existing accounts to make sure they didn't get skittish and leave, they overturned every rock they had from existing opportunities, they began a mad scramble looking for new opportunities, and they even resorted to some unscrupulous ways of finding prospective clients, including looking for opportunities at the funeral of a fellow ad man.

It got me thinking about the health of my pipeline.  Could we survive a Lucky Strike strike?   Could you?  Maybe some take aways from this should be:

• Why wait until you lose your Lucky Strike to take some of these actions?(not the unscrupulous ones of course)
  • Contact your existing accounts and see if there are ways you can better serve them
  • Look under every existing rock within your business, are there opportunities you haven't followed up on or maybe have forgotten about?   Are their clients who've dropped you in the past you could revisit?  Are there additional sales you should be talking with existing clients about?
  • Time for an intense new business blitz, or what I call a "surge",  just good ol' fashion cold calling trying to shake every tree.

In this economy everyone is vulnerable to losing a major account?  Why wait till it happens to take action?

 

The 2nd in My 2-Part Series on Managing the Sales Pipeline

Problems Associated With This Limited Pipeline Process:

While most companies operate somewhat successfully with this basic reporting process, there is tremendous room for improvement.  First let’s review some of the problems inherent with this process:

• Salespeople Believe That the Idea Is to Just Have a Full Pending Report – the word spreads around the sales team that “the boss wants to see lots of stuff on there, so just put down anything you’re working on”.  They subscribe to the “baffle ‘em with Bullshit” theory we all used as kids when answering essay questions.  Salespeople know that it would be death to report just a few REAL opportunities, so they make up what they have to to get through the one-on-one with the manager.  They know they can always just bs their way through it when the prospect never turns into a client within the time-frame they’ve projected, “What can I say, the guy just decided not to go with it…”  The reality is that not everyone is “Pipeline Worthy”; just because you can walk upright and fog a mirror, doesn’t mean you belong in the pipeline!  We’ll cover how to deal with pipeline worthiness coming up later.
  
  

• Salespeople Exaggerate Where These Opportunities Are – salespeople are taught to “think positively” and “believe!”…they are also taught to “hang in there” and “be persistent”, leading them to think they can close anyone eventually.  So as they go about their daily calls with prospective clients with this mindset, and end up hearing only what they want to hear and  believing only what they choose to believe vs facing the reality of what is going on with the prospect.  A prospect may say, “We may end up doing something with you down the road” – and salespeople hear “Yes, we’ll do business with you”…and when they fill out their pipeline reports they write down their guesses with these exaggerated estimates.  From my years of working with managers and salespeople, I’ve come to the conclusion that salespeople believe that 70% of what is in their pipeline will eventually close, while REALITY shows us that the number is really like 30%.  THAT 40% “REALITY GAP” IS A KILLER WHEN YOU’RE PROJECTING FUTURE SALES!

 

• Managers Don’t Have Time to Pry Beneath the Surface – sales managers are busy people, with multiple responsibilities, tons of reports to create, fires to put out, etc…they usually have limited bandwidth for each person on their team.  So when the weekly one-on-ones come around where salespeople have to report where their pending business is at the moment, the manager has just enough time to scratch the surface on the various opportunities (especially given the salesperson’s tendencies to pack the report with lots potential deals).  Another factor in the equation is that managers also are taught to think positively and want to have a good pending business report to send up the food chain, so they may choose to hear what THEY want to hear as well.    Most managers have just enough time to ask surface questions and get surface answers.  What makes this even more challenging is that, because salespeople may be bs’ing, they have a tendency to be quite verbose about a particular opportunity…actually SELLING their manager on how “good” this thing looks!  “I think this thing could be really, really big boss…”

• There Are No Standards for What a Percentage of Close Means – this is a very critical area that I focus a great deal of time on with my clients, and it will lead to the creation of what I call the “Mini-Steps in the Closing Process”, (which we cover in the next segment of this book).   Basically, the mistake we make in this is that we are satisfied with educated “guestimates”  when it comes to determining what 50% MEANS, or what 75% MEANS.  50% chance of closing may mean to a salesperson, “I drove by that business one day and I will eventually close him if I can just get in to see him”, when a manager believes that 50% means, “you’ve made a presentation and you’re dealing with one or two stalls or objections”.  What does 75% mean?  What does 90% mean?   There are as many definitions as there are salespeople in a sales staff!   One of the immediate changes I make within a sales team is the universal defining of these terms so that there is a clear cut understanding of what 50, 75 and 90% chance of closing mean…then we’ll add action steps to even further define the meaning (more on both of these concepts coming up later in this chapter).

• There Are No Stages In the Sales Process – prospective clients enter the pipeline at some point, then travel through the selling and wooing process, and eventually either come out as a closed piece of business , or drift off into never-never land.  It just turns into this blind process of things going in, moving through and maybe coming out.  There are no defined stages in the process that a salesperson and manager can start to lump prospects into.  If you can break down the process into at least three stages, you’re on your way to better pipeline clarification.  We’ll go into how to set up a basic staged-process later in this chapter.

• Everything is Verbal, There Are No ACTION STEPS Involved in the Process – what leads to this “40% reality gap” of what is perceived to be real and what is actually real in the pipeline is the fact that everything is verbal interpretation between the prospect and the salesperson and then the salesperson and the sales manager (and then further up still between the sales manager and top management).  When everything is verbal interpretation we not only get the various definitions, as we’ve discussed, but we DON’T ALLOW THE PROSPECT TO PARTICIPATE VIA THEIR ACTION (OR NON ACTION) STEPS THEY TAKE (OR DON’T TAKE).  A major paradigm shift I bring about with my clients is that the true pipeline forecasting should be done by what the prospect DOES, not what the prospects says he will do!

• Managers Have No Idea How to Step In and Help  - with no defined stages, verbal mystification and loads of bs, how could a manager possibly figure out where to step in and help, especially given the fact that their time is at a premium to begin with?  The pipelines most people are dealing with made of metal, instead of glass…we can’t see in to see what is really going on…we’re left looking at if from the outside and just hoping and praying that something good is truly happening!
  
  

The Pipelines Aren’t Constructed to be a Learning Tool for the Salesperson  -- these metal, educated guestimate pipelines aren’t effective at all in helping a salesperson really understand their own “numbers game” when it comes to achieving a particular outcome.  Because there are no stages to track and watch, a manager can’t see where a particular salesperson may be struggling within the process.  They can’t see that Bob has trouble moving prospects from Stage 1 into Stage 2, or that Janice struggles with moving prospects  from Stage 3 to closing, or that Phil takes four times as long as everyone else on the team to move prospects from Stage 1 to close.  We just don’t know any of this information because our systems aren’t set up to tell us!

This is the First in a 2-Part Series on Managing the Sales Pipeline

Pipeline Power - Part 1 - Managing Outcomes Alone vs Managing Outcomes AND Activity

These ineffective sales pipelines are actually a bi-product of a bigger problem within a sales structure and that is an tendency to focus almost exclusively on outcomes;  just what is crapping out of these pending pipelines.

On the surface this is certainly understandable.  Let’s face it, outcomes are what make or break us.  We run on closed business.  We pay the bills and earn livings based on what we eventually sell.  Owners pressure top management, top management pressures sales managers, and sales managers pressure sales people TO CLOSE BUSINESS NOW!   Outcomes ARE important and we should track where we are at all times against our budget.

However, where I see sales managers make a killer mistake is in focusing EXCLUSIVELY on outcomes…to the point of paying attention to little else, namely the ACTIVITY that may or may not be happening to create those outcomes.

This, in my opinion, is why we allow for such insufficient pipeline reporting…because we’re SO focused on what someone is selling now, today! 

The problems with this mindset are:

By focusing exclusively on outcomes, we usually become aware of problems at a time when it’s too late to be able to do anything about it…

“Ted, it looks like you’re at about 50% of budget, and we’ve only got 10 days left in the month…you’ve got to get on it buddy, let’s go!!!”

o       What we don’t know (and Ted doesn’t know) is:

§         How did Ted get in this state to begin with?

§         What does he realistically have in the pipeline that he can close within 10 days?

§         Which opportunities are advanced enough for me, as his manager, to step in and impact?

·        Because our pipelines aren’t constructed to be learning tools for our salespeople (metal vs glass), we have a tough time articulating the type of activity required to achieve certain numbers.

o       This leads to one of the biggest problems salespeople report when asked about their biggest frustration with their managers – and that is a lack of feedback on whether or not they’re doing the right things on a day-to-day basis.   If all they know is “I need to his $100,000 a month in sales” and they don’t really know what it takes activity wise, and what their pipelines SHOULD look like, they’re left with the question at the end of the day, “Did I do what I was supposed to do today?”…

·        This exclusive focus on outcomes leads to a management situation where we’re counting on luck and finding enough of the right people who will create outcomes in order for us to achieve our objectives as managers.   And several managers I talk to are very adamant about this point, saying, “I count on bringing in good people and count on them knowing what to do”.  Sounds good when you say it, but my question is, have you noticed the way professionals in other fields are managed?

o       Can you imagine a professional football coach saying, “Well, I’m just going to bring in the best players, tell them we want to win, and count on them doing the right thing on a daily basis…we don’t need a playbook, or practice, or spring training, or weekly coaching…I’ll see them on Sunday when we live with the outcome”  -- wouldn’t last too long unless he got very lucky, and even then it probably wouldn’t last.

Managing Outcomes AND Activity

I want to be clear here in that I’m NOT saying that outcomes aren’t important and that we shouldn’t watch them all the time and hold people accountable to achieve the outcomes…outcomes are critical.  They are the wins and losses in sales.  And wins and losses will either get you a championship or a train ticket out of town.

I’m suggesting that we need to also manage the right activity required to achieve the outcomes, and we should be watching and monitoring and holding people accountable for the activity along with those outcomes.

The reality of the situation goes back to our football analogy and the very true saying – championships are won on the practice field !!

Unfortunately (and quite alarmingly) I’ve found that most managers have been so conditioned to selling and managing by outcomes alone,  they don’t know what activity is truly required to reach the needed outcomes!!!

Which leads to conversations like this when someone is hired:

Manager:                  “Welcome aboard Brooke…are you ready to get after it?”

Salesperson:             “Yes mam, I’m ready to crush it…can you tell me what type of activity I should focus on doing to achieve success?”

Manager:                  “Well, as we’ve discussed, your budget is $10,000 a month for the first three months, then you’ll probably be bumped up to $30,000 a month”

Salesperson:             “Can you roughly tell me how many calls I need to be making to hit that?”

Manager:                  “Frankly, I’m counting on you knowing that, Brooke…I hire experienced people who should know what to do…I mean, you know your success ratio better than anyone, right?”

Salesperson:             (of course clueless about her “success ratio” doesn’t want to admit that) “Well, yeah…but would you say I should be making 50 cold calls a day?”

Manager:                  “I’d say that would be a pretty good start…we require you to fill out a call report each week, tracking your calls and appointments, etc…  all I’d say is work your ass off, ask for the business and just get excited about what we’ve got to offer…”

Now imagine if this same manager had a solid grasp on the activity required to achieve success, and furthermore could tell Brooke exactly what her pipeline should look like on a regular basis.

It would sound something like:

Manager:                  “Welcome aboard Brooke…are you ready to get after it?”

Salesperson:             “Yes mam, I’m ready to crush it…can you tell me what type of activity I should focus on doing to achieve success?”

Manager:                  “I can tell you exactly the activity you need to do and what your pipeline should look like in order for you to achieve success…”

Salesperson:             (Very reassured) “Can you share that with me?”

Manager:                  “We break things down into stages here…we’ll get into more detail later, but roughly by the 2^nd month, and ongoing on a regular basis, you need to have 30 prospects in Stage 1, 20 prospects in Stage 2, and 10 prospects in Stage 3 at the beginning of each month…and for someone starting out, you’ll need to make roughly 100 cold contacts a week for the first month in order to get 30 prospects to Stage 1… ”

Salesperson:             “Wow…I’ve never heard it broken down quite like that…so everyone on the team has those same numbers?

Manager:                  “To begin with, yes…because we know that if you will follow this plan you will achieve the outcomes we both need…but because I hold people accountable for their activity as well as their outcomes, soon your true “success ratio” will become self-evident, and we’ll be designing your plan for success together, and I am here to help you achieve, because we only achieve as a team when each member achieves…”

Can you imagine from a new salesperson’s perspective how much more confident she will feel in knowing from day one what her activity needs to be in order to have the type of pipeline required to achieve success?   

All of this goes back to the pipeline…if managers haven’t broken down the process into stages, and handling everything verbally, they will remain in the dark as to what a healthy pipeline is…making it almost impossible to manage by outcome and activity!

GB