A Healthy Pipeline of Sales Opportunities is Full, Moving and Balanced

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I concluded my recent post “Prisoners of Help Are Doomed to Fail” promising to tackle the characteristics of a healthy sales pipeline. My intentions were good, but I was distracted  in early October by the release of my long-sought-after feature story in the great Southwest Airlines’ inflight Spirit magazine. So thanks to the Sales Airline for choosing me as their October 2012 Freedom Story. I am honored to be flying around in the seat back pockets of 700 planes this month! And thanks to those of you who have tweeted and posted updates on Facebook and Linkedin, or texted me with pictures of page 16 in Spirit magazine. It’s been a ton of fun. Oh yeah. St. Louis has this other annual October distraction – aka, the St. Louis Cardinals – the team that you can’t kill. Now let’s get back to the sales pipeline…

Essentially, there are two critical indicators of sales health: The Sales Report and the Pipeline Report. With just a quick glance at these two key indicators, we can make some very quick assessments about the health and effectiveness of a sales effort. When working with sales managers I use a metaphor of the two most important gauges in an airplane’s cockpit: The Altimeter and the Airspeed Indicator. Altitude is analogous to the sales report. Your current altitude is a result of what you’ve done in the past. And so is the sales report. It provides a look back at what’s been accomplished – a report card, in a sense. It’s important to focus on results – all the time – and always know where we stand. The airspeed indicator tells an entirely different story. It reports how fast you are moving through the air and good airspeed allows you to maintain, or even increase altitude. Not enough airspeed and it could take a long time to get to the destination, and you may have trouble maintaining the desired altitude. Airspeed helps predict what will happen in the future — and that’s really important whether you’re flying in a metal tube above the earth or working to build sales momentum! So, like airspeed, the pipeline of sales opportunties shows us how fast we’re going and how likely we are to succeed.

So what do we look for when reading our pipeline report? How can we tell if we’re flying fast enough? There are three indicators as to the health of a pipeline depicting future sales opportunities.

A healthy pipeline is full, moving and balanced.

A Full Pipeline:  This one is common sense. To be healthy, a pipeline of potential sales should be full. We should see plenty of deals. And no one deal should be so critical that it could make or break the quarter or the year. When there are precious few deals on the horizon, that’s a pretty good sign that the sales team (or individual) has unfortunately, become a prisoner of hope. And that’s dangerous.

A Moving Pipeline:  I choose the image above for this post because I like that the pipeline demonstrates flow. What good is a pipeline if nothing is moving through it? Accounts/deals/opportunities should be progressing, or moving forward, from one stage of the sales cycle to the next. New opportunities should be continually added to the funnel and existing deals must be monitored for movement. I’ve seen a lot of pipelines where deals become stale and start growing mold. Mold may be helpful when making penicillin, but it sure isn’t a sign of freshness or health when assessing the viability of a sales opportunity.

A Balanced Pipeline:  This characteristic is a little more complex. When looking at the pipeline report, we should see accounts and opportunities across various stages of the sales cycle. This is a critical indicator of deal flow and pipeline balance can be a wonderful predictor of future closings – both short and long-term. An imbalanced pipeline is a sign of revenue trouble ahead. If most of the accounts are at the early (cold or “targeted”) stage, that’s indicative that we haven’t put in enough effort starting new relationships or we’ve done a poor job uncovering opportunities at targeted accounts. When that’s the case, there are very few deals about to close making the short-term outlook for new business pretty dim. On the other hand, a pipeline that is imbalanced with many deals at the far hot-end of the funnel indicates that the immediate future may be bright, but a lack of deals in the active (middle) stages signals that there could be a drought of closings down the road a bit.

It is difficult to maintain a balanced pipeline because salespeople tend to gravitate to (said better, obsess over) deals that are hot. And we all understand that. Hot opportunities require attention and we certainly want to do everything possible to ensure they don’t cool off. But having said that, the reality is that no one defaults to prospecting mode (hmm, where have you heard that before 🙂 ) and way too many people in sales over-manage these hot opportunities — as an excuse to rationalize their lack of working to create new ones. And that is exactly what creates an imbalanced pipeline and keeps them from consistently developing new business. I think there’s a hot new Amazon bestselling book (43 reviews, now selling for only $10.99) that might be able help with that issue. I also wrote a post earlier this year that addresses how to segment our time and attention across accounts and opportunities in various stages of the sales cycle. If this healthy pipeline discussion hit on something close to home in your business, I encourage you to check it out.

One last thing: At the risk of alienating my in-laws and friends in the San Francisco Bay Area: Go Cardinals! You gotta love a Game 7.


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