If You Don’t Have Time To Build A Strong Pipeline Then Spend That Time Looking For Another Job
Knowing how to build a strong pipeline is the foundation for having a successful career in sales. I wasn’t joking with the title of this article. If you don’t have the discipline and the work ethic to focus time on pipeline building then sales may not be for you.
That goes for freelance consultants too. If you don’t have what it takes to build your sales pipeline, you should consider investing in a sales person for your business or reconsider your business.
I won’t bore you with the basics of having a good sales process, tracking your deals accurately, and other basic parts of any sales efforts. What I will say, is that you need to understand the basics of pipeline building and why it’s important if you plan on making moves as a sales person.
In my mind, there 4 basics steps that you need to thoroughly understand.
Step 1: Set realistic sales quotas
If you are a one person shop, you are likely defining your own sales quotas or sales targets for your business. If you are an employee, someone else is defining this for you. Either way, make sure your quota is realistic, not too low so that it’s easy to hit, but not so aggressive that you’ll never achieve it.
Take a look at previous time periods to make sure the quota is in line with the growth of the business and the sales track record. For example, if your quota last quarter was $1M and you missed and only brought in $600k, then how about don’t set the quota for this quarter at over $1M until you really understand why you missed your last number.
Step 2: Do some back of the napkin math
Once your quota is established, then take a look at some basic metrics for your business. For example, if you know the average deal size for your company and you know how long, on average, it takes to close a deal, it should be very easy to do basic math on a napkin to find out how many deals you’ll need to hit your number.
From that, you can assess quickly how strong your pipeline already is (or is not) by how many deals you are already working to close. If you have a pretty significant gap between the number of deals in your pipeline and number you need to close to hit your target, you should go back to step 1 and start the process over.
Successful sales people are working to close business in future quarters, they aren’t spending time trying to to close near term deals so that they hit their number by the end of this month, or this quarter. Planning is one of the most critical components to build a strong pipeline.
Step 3: Commit to a pipeline target
Let’s go back to the previous example and say your quota is $1M, that usually means you need a pipeline of at least 1.5 or 2 times that depending on your business. As great as you might be, you will not close 100% of the business that you go after.
Again, if your current pipelines falls well short of your pipeline target, you should go back to Step 1 and try again. You will get no extra points for having large pipeline numbers if you continue to miss them. Any executive would rather you have high confidence of hitting a conservative, but realistic sales number instead of a low confidence of hitting a higher, over-inflated sales number.
Step 4: Don’t put lipstick on a pig
It is critical to be honest about your pipeline if your goal is to build a strong one. That means, stop pretending that the deal you worked so hard on that was supposed to close three quarters ago, but is always ‘just about to close’, is actually going to net you sales revenue.
That also means, stop having such high confidence in new clients that you’ve never worked with before and have no history or track record with.
And finally, it means you should stop disguising your pipeline as good, if it’s not. You could spend ll the time spent covering up a weak pipeline to make it look good, on actually building a strong pipeline.
The best way to avoid missing your sales number is the follow these four easy steps. If your targets are unrealistic and your pipeline is weak, you are simply setting yourself up to fail. Why do that? It takes just as much time to lose as it does to win, and I like to win. I recommend you focus your time and efforts on winning.