The Fat Pipeline
This article originally appeared at SalesCoachWorld.com
One of the significant benefits of modern sales technology based on things like the cloud, social media, analytics and journey maps, is our ability to widen the sales funnel. Unfortunately, we might not be taking advantage of this.
You know the drill. We start the quarter with a pipeline full of opportunity and over the course of 90 days we winnow it down to a few select deals that we must close if we are going to make the number. The winnowing happens, at least in part, because as the quarter goes on, the amount of data about the pipeline grows exponentially forcing us to make decisions about what to pursue which, in turn, is responsible for nail biting in the last week or two.
The pipeline is a good metaphor for more than one reason. Did you know that if you double the diameter of the pipe, you can halve the flow and still get the same throughput? The application for sales is that the fatter our pipelines, the more ways we have to make quota but we often don’t pay much attention to this.
Widening the pipe requires us to keep more deals active for a longer time before we need to close business. You can only do this if you have good analytics, often based on machine learning, and you stick to a sales process proven to work in your business, which your machine learning system will be happy to document for you.
If this sounds terribly obvious or even old school, keep in mind that according to an annual research study conducted by CSO Insights, only about 20 percent of businesses do this and their results are better, especially in reducing the number of no-decisions. Alarmingly, half of the businesses studied have random processes and free form approaches to technology. Not exactly a recipe for success.
Left to our own devices—a pen, paper, perhaps a spreadsheet, perhaps even contact management software, and a salesperson’s intuition, we get what we have. According to CSO Insights, that means about 60 percent of the sales team makes or exceeds quota. In business, what other process tolerates such low yields?
Upgrading to a process and analytics based approach is tricky business because it tends to ruffle sales reps’ feathers. One company I studied ran a double blind study applying analytics to all deals at the start of a quarter and letting the reps proceed with their conventional approaches. The analytics system was able to predict, even at the start of the quarter, which deals held the most promise and targeted them for close on a prediction list. At the end of the experiment the results were compared with the early forecast and to everyone’s surprise the predictions were on target.
The great learning from the experiment is that sticking with the analytics approach produced less wheel spinning and wasted time and effort leaving more resources for pursuing better (machine selected) opportunities. I am leaving out the end user company’s name because I am not sure it’s widely available but the analytics vendor is Lattice-Engines. Others that support similar strategies include 6Sense, Aviso, and many others.
All this is relevant in the context of my current book, Solve for the Customer. It nicely shows how we can harmonize the roles of people and technology in standard business processes. People, process, and technology is a cliché for many people but it has stuck around because it reveals some essential truths. If you are a student of selling and any of this sounds intriguing, it’s time to reexamine your business in light of those three essentials.