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!
