We like to think sales opportunity pipeline visibility is a science. Or at least well-founded math.
Create five or six stages based on the major milestones of the sales cycle. Assign percentages to represent the probability of closure for that particular sales step.
Drive the business by reviewing the opportunity pipeline every week. Query the reps on actions they’re taking to progress their deals. Excellent pipeline visibility is key to ensuring revenue goals are met.
The inconvenient truth about pipeline visibility
If pipeline visibility is such a science, why do so many deals die late in the funnel?
We’ve all been there. A deal that was at 60% suddenly gets killed off for reasons that appear out of the blue.
- No funding
- Not a strategic project
- Lost sponsorship
Management goes nuts because the reps should have identified these issues way earlier in the sales cycle. Before they invested so much time and resources. So much for visibility!
Why does this happen? That’s obvious. The reps didn’t ask the hard questions early enough in the sales cycle. Why not? There are many reasons. I think that one contributing factor lies in how sales management manages the pipeline in the first place.
Emphasizing sales activity causes you to focus in the wrong area
You end up managing what your sales guys are doing, rather than what they are learning from the customer. Your reps respond accordingly. They focus on activities like giving the pitch and doing the demo, rather than uncovering the buyer’s pain points.
You get great visibility into your sales reps’ activities, but not into the customer’s buying cycle.
There’s a reason it’s called the customer buying cycle. It’s based on the information the customer needs before they buy. Not on what your sales reps do at each stage. In order to know what the customer needs at each stage you have to listen.
Define your pipeline stages by what you should hear
You’ll get better pipeline visibility if you specify what your reps should hear at each stage when they ask the right questions. You’ll hear what the customer is thinking, as they progress along the buying cycle. And that will give you better visibility into whether or not the deal will close.
A Real World Example
In a recent role, I ran marketing for the cloud platform group within a large company. We sold our product to service providers who wanted to launch high margin cloud services. Our product was a true innovation. Its unique capabilities allowed service providers to get to market fast and with lower capital and operational expenditures.
We faced a real problem with sales opportunity pipeline visibility. Customers were hugely interested in our product because it was such an innovation. But interest didn’t always translate into investment. Deals would fall out of the pipeline after the teams had devoted significant time to presentations, demos, proofs of concept, and reference calls. We were spending too much time on deals that were never properly qualified.
To improve pipeline visibility, we redefined our pipeline stages. We knew from successful deals the types of comments our sales reps should hear from the customer at each stage. We did this along two tracks. One for business conversations. The other for product and implementation conversations. This post focuses only on the business track.
What you should hear at the 20% stage
The goal for the 20% “Research” stage was to uncover whether the customer had an urgent business need for a cloud launch, or just interest in learning about our product. If it was just interest, we’d know not to invest time into prosecuting the deal.
We wanted our reps to hear the business owner say something like the quote in the yellow box. Anything else less urgent would indicate a risk that the opportunity was not real. True sense of urgency would be indicated by competitive pressures, specific customer demand, financial targets and a specified time frame for cloud launch.
Pipeline visibility at 40%
At the 40% “Verify” stage, we wanted our reps to hear comments in two different areas. First, we wanted to hear validation of the cloud service portfolio that the buyer intended to bring to market. Knowing the specific cloud services they intended to launch would help us orient our demos and customer reference stories appropriately.
Second, we needed to hear as much detail about the decision making process to get a deal done. We needed to understand the business justification our buyer would need to make, in order to justify the investment in our solution. In our selling approach, we worked with the buyer to build this justification. So, at this stage, we wanted to learn about the audience, the format, and the level of detail.
What you should hear at 60%
At the 60% “Prove” stage, our goal was to show that our company provided the best way for the service provider to achieve their cloud service goals. The key deliverable at this stage was a financial model created jointly with the customer projecting the revenue and profit of the planned cloud service portfolio. We needed to hear the buyer express confidence in the model so that she would feel comfortable presenting it to the Board or investment committee.
Pipeline visibility: See better by listening better
Once we built this approach into our sales training and sales enablement kit, we had much better pipeline visibility. Verifying the urgency of cloud service launch at the 20% stage provided a tough hurdle. But the diligence that the team expended resulted in much less pipeline leakage at later stages.
Try this approach for your business. What do you need to hear at each stage to improve your pipeline visibility?by