Get the Sludge Out of Your Sales Pipeline

Sometimes I feel like I read fiction for a living. No, I'm not an editor for a big publisher, or a critic for a major news outlet -- I'm a professional sales consultant and I look at sales pipelines almost every day. Some of the best and worst fiction is tucked away in the sales pipeline entries of sales people.

This fiction, fantasy -- whatever you want to call it -- is sludge that clogs up your sales pipeline. Here's a simple two-step program to blow it out and help you focus on your real sales efforts.

Step 1: Separate the prospects out of your sales pipeline.
Sales pipelines are not the repository of hopes and dreams. Your sales people need to be tracking actual sales opportunities, not prospects. This means that anything that is not a real sales opportunity needs to be tracked in a prospecting activity report.

Don't fool yourself or let others fool you -- prospecting and selling are very different activities. They take different muscles and different efforts. Too often, I see the two activities tracked together -- that creates a muddle that hides lots of sins.

Let's make it simple: It's a prospect if it has any one of these qualities:
A. Deals closing later than 60-120 days from now (depends on your business)

B. Deals that do not have a clear Executive Champion who is your primary communication point

C. Deals without an established budget

Move these accounts onto a sales activity tracking report. This is where you keep your sales people's prospecting efforts, lead tracking, and marketing campaign information. It's the waiting room for your sales pipeline.

An account gets onto the sales pipeline when it meets these equally simple criteria:
1. There is an executive sponsor with decision-making authority with whom you have made direct contact.

2. A clear decision will be made within 120 days, (otherwise it is just prospecting).

3. There is funding. This could be budget, or a contract that is being put up for bid or an initiative that has relieved funding approval.

4. There is a reason for the prospect to change from what they are doing now.

Hold to these simple criteria and do not let your sales people convince you otherwise. You need to keep your sales pipeline free of distractions. If it does not meet these criteria, it's prospecting and should be handled as such.

Step 2: Clean out the fiction from your sales pipeline
Sales people are not liars, per se, they are just pathologically optimistic. The first person that they convince that your company should continue selling a clearly dead or mortally wounded deal is themselves. That's fine, you want positive sales people -- not Eeyores. But don't expect them to clean out the dead weight in the sales pipeline, that's your job.

I think this is a painful exercise that you need to do twice a month. It consists of just 3 questions that you ask each member of your sales team. Based on the answers, you can decide to help with the sale, kill it, or let it roll for another cycle.

How long has it been since you have spoken directly with the decision-maker? Decision-makers stay engaged with companies with whom they envision working. They blow off the companies who are the also-rans. If the cycle is longer than 10 days, you have been knocked off. Either try another way to engage, or send the "Thank you for considering us letter," and move on.

Are they on track in giving us the information we have requested to provide a proposal/bid? Just like the answers to the question above, engagement intensity follows the decisions that are going to be made and the firms that are in the running. The answers to this question measure the intensity of the prospect's engagement with us.

How does this decision rank in our decision-maker's priorities? I haven't met many people in the past two years who are scrambling to get to their "#1-B priorities." Deals stall and delay because the priorities shift on the prospect's side for reasons over which we have no control. I see sales people keep dead deals in their pipeline in order to avoid having to prospect or face the truth that their hoped-for sales are gone.

Getting the sludge out of your pipeline is key to building a great sales culture and process. Clean out the gunk so that you can focus on working the real deals.

Flickr photo courtesy of Carl Chapman, CC 2.0