Other than the sales team itself, the sales pipeline is perhaps the most valuable asset of any sales organisation. This is particularly true in expansion-phase businesses that are critically dependent on finding and winning new business as opposed to serving existing customers.
There’s no doubt that the volume, value and quality of new opportunities entering the pipeline has a profound impact on the success of the overall sales process. And yet in environments that are focused on monthly or quarterly performance, the focus on closing current late-stage opportunities distracts attention away from the need to invest in adding new opportunities that will provide the foundation for future quarter revenues.
Without the necessary focus, programmes and process, it can be all too easy to discover that you’ve got an uncomfortably large revenue hole — too few qualified late stage opportunities to be able to reliably make your number — that could and should have been identified and addressed earlier in the sales cycle.
Given the relentless quarterly revenue pressures in many organisations, it’s hard to lay all the blame for this at the feet of sales people or sales management. They are often simply following their natural motivations — reinforced by their compensation schemes and signals from executive leadership — to always want to be closing business in the here-and-now.
Spotlighting the Need for Change
Identifying a potential revenue gap early can help, and that’s where a new generation of sales analytics applications are proving invaluable. These applications can predict likely current and future outcomes based on past patterns of performance at every level from an individual to the sales organisation as a whole, and can help to identify deficiencies early in the cycle while there is still time to take corrective action.
These analytics tools can also help to identify opportunities for individual coaching, general skills training and, perhaps most useful of all, for systematic process improvements in attracting, engaging, qualify and converting more of the right sort of prospects. The conclusions are often obvious: you can convert more of the right sort of prospects if you attract and engage more of the right sort of prospects in the first place.
But there’s a problem here: getting under-pressure sales people to divert their attention from closing to opening can be a challenge, and it may not play to their strengths in managing already-qualified opportunities. That’s why so many complex B2B sales environments now include a pipeline development function that is exclusively focused on researching, identifying, developing and qualifying early-stage opportunities.
This pipeline building function is particularly valuable in situations where the vendor cannot rely simply on uncovering existing needs and active projects. In fact, it’s essential in any complex sales environment where the vendor is trying to uncover, develop and address previously unsatisfied needs, to create a new category of solution or to reinvent or disrupt an existing solution category.
Focus on Early-Stage Conversations
In these environments, it’s both unlikely and positively undesirable to expect to fill the sales pipeline with prospects that are already “in the market”. In many situations, need has to be created and carefully nurtured — by bringing a previously unrecognised issue to the attention of the prospect, or reframing their view of an issue they were already aware of and thought unfixable or not worth fixing.
These early-stage conversations are rarely “one and done”. Uncovering the prospect’s latent need often requires multiple conversations, backed up by careful research into the target customer and the monitoring of key trigger events. It often involves calling around multiple touch points across the prospect organisation, and the systematic nurturing of initial interest into a desire to learn more.
These are roles with very different requirements and expectations from traditional telemarketing or transactional inside sales. The vast majority of traditional telemarketers, whether employed by organisations or agencies, lack the curiosity, conversational skills and emotional intelligence to uncover and develop these unrecognised needs.
In fact, the initial customer conversations at the top of the funnel need to be every bit as persuasive and well informed as the conversations later on in the sales cycle. But simple economics (and behaviours) preclude expecting well-seasoned, very highly compensated experienced sales people to take prime responsibility for this early-stage pipeline development function. It’s inefficient, and perpetuates an unpredictable feast-famine revenue cycle.
In my experience, the earlier sales organisations separate the pipeline building function from the sales function, the better. If done right right, this separation of function can be justified in organisations with just a handful of quota carrying sales people. In fact, the longer you delay, the more barriers you put in the way of generating predictable, sustainable revenue growth.
Improving Pipeline Development
So what’s required? Firstly, you need to recruit the right sort of people into the pipeline development function. I’ve seen two different cohorts succeed in these roles. One consists of young, well-educated and personally ambitious people who often see the role as a stepping-stone to professional field sales. A second cohort consists of former successful sales people that have spent time raising their families but now want to find a way of returning to the job market without taking on a full-time, field-based sales role.
Next, you need to establish excellent alignment between marketing, pipeline development and sales in a number of critical areas, of which the two most important involve defining your ideal prospect profiles (both organisations and roles) and crafting issue-led talking points and compelling value propositions that are designed to make the right sort of prospect want to learn more.
Then, you need to ensure that your marketing, pipeline development and sales teams collaborate to develop a progressive account profiling and opportunity qualification process that makes it crystal clear to all concerned what a well-qualified sales opportunity looks like, the research that needs to be done to identify the right candidates, and the journey that a prospect needs to be led through in order to get them there.
Finally — and back to the subject of metrics again — you need to establish effective metrics that span every step in the customer acquisition process, including how many touches it typically requires to persuade an otherwise well-qualified prospect to agree to move forward with you to the next step. The answer, by the way, is almost inevitably more than most people not involved in pipeline development might imagine.
So you need to be sure that your pipeline development people are particularly capable of not only dealing with the inevitable rejection, but also are able to learn from it and improve their performance systematically by focusing on the constraints that have been holding them back. This, by the way, is why scripts don’t work in complex sales environments – every conversation has to be adaptable.
Leading the Change
Pulling this all together is a non-trivial task. Your pipeline development team need active, energetic and experienced management, and many sales leaders that have only had field based sales jobs in the past often lack the knowledge and skills to get the most out of people in this specialist role. I’ve seen many high-potential pipeline building people languish because they were not effectively led.
This, by the way, is one of many reasons that make it worth considering outsourcing the pipeline building function to one of the growing number of specialist B2B agencies that have emerged in recent years. It makes it more likely that your pipeline building resources will be expertly recruited, trained and managed, and it allows sales leaders to focus on what they are usually best at — leading their teams to close already well qualified opportunities.
But however you accomplish this, in-house or outsourced, giving the pipeline building role the attention it deserves is something that every modern sales leader needs to pay attention to.