In a recent article (Advance or disqualify!), I proposed that salespeople - rather than clinging on to lifeless sales opportunities in the hope of a miraculous and unlikely resuscitation - should politely and professionally disqualify deals where the customer is unwilling to commit to even a modest advance.
I was merely reflecting what I’ve seen today’s most effective salespeople do as a matter of basic personal discipline: they have too much respect for their own time to waste it pursuing opportunities they have no chance of winning, whilst their weaker, less-disciplined colleagues hold on to them until the last possible moment, for fear that abandoning them will make their pipelines appear smaller.
But as René Voorhorst reminded me in his LinkedIn comment on my article, the failure to disqualify is not just an individual sales issue - it’s a sales management issue...
Setting rational pipeline coverage targets
Whenever sales management focuses on the “headline value” of an opportunity pipeline rather than the underlying quality of the opportunities, whenever salespeople are admonished for allowing the headline value of their pipelines to fall, whenever completely arbitrary pipeline target coverage targets are set (for some reason, 3* coverage seems the most common), sales managers drive, encourage and perpetuate their salespeople’s dysfunctional and counter-productive behaviour.
Whenever we look at the actual evidence rather than plucking a number out of thin air, it becomes clear that unthinkingly applying a universal “you’ve got to have 3* pipeline coverage” rule is destined to result in a precisely wrong target. When I’ve studied this with clients (and all these figures assume that all opportunities are consistently qualified against the same criteria), the actual benchmarks vary widely according to the circumstances.
For example, upgrades to an existing installation in a satisfied customer typically require significantly less coverage. Completely new projects in an existing customer require higher coverage. Net new projects in brand new customers carry the greatest risk and require the highest level of coverage. But even within these general guidelines, your organisation’s actual numbers will vary.
If you are a sales leader and don’t know what these benchmark numbers are, you need to find out. And in the meantime, you’re not helping anyone (and damaging your own credibility and reputation) by imposing “one size fits all” coverage targets on your salespeople across pipelines that are composed of diverse opportunity types.
Focusing on quality, not just value
Not all apparently similar opportunities were actually created equal. But without consistent qualification of every opportunity, you’re never going to know - until it’s too late. That’s why every opportunity needs to be subjected to a robust and rigorous qualification process.
In complex B2B sales environments, the traditional BANT criteria are hopelessly inadequate. That’s why I’ve become such a fan of MEDDPICC (to the point where I’ve extended it with a couple of additional criteria). You can read more here.
A bias towards disqualification
The very best salespeople don’t need to be prompted - they are ruthless about disqualifying weak opportunities. They know that if they are likely to lose, they had better lose early, and move on to greener pastures. They know that if they cannot advance an opportunity, they need to disqualify it (or remove it from their forecastable pipeline and put it into a nurturing queue if future potential exists).
But the majority of salespeople need more help and encouragement to rid themselves of the ballast of poorly qualified opportunities. Their default is to hold on to them for as long as possible, for fear of making their pipeline look smaller. And that’s where sales managers have such a critical role to play - by counterbalancing the salespeople’s clinging behaviour with a bias towards disqualification.
When they are conducting opportunity reviews, sales managers need to start with a bias towards disqualification. They should challenge their salespeople to justify why they should continue to work the opportunity. They must insist on rigorous evidence-based qualification. They must expect salespeople to provide the evidence to substantiate their confidence.
In particular, they must uncover, expose and challenge any unverified assumptions that the salesperson has made regarding the opportunity. They must give the salesperson an uncomfortable ride if it looks as if they have not been rigorous enough in their assessment or management of the opportunity. The salesperson will learn, soon enough, what is expected - and if they do not, they will confirm their unsuitability for the role.
Uncomfortable (but necessary) consequences
Needless to say, when this policy is first applied, the impact on the headline value of the pipeline will be significant. But the “value” that is stripped away was never real in the first place and was simply creating a false and unjustified sense of security.
Sales managers who persist in stressing the absolute value of the sales pipeline without regard to its quality, and who insist on justifying the target values they establish through rule-of-thumb multipliers without any supporting evidence, are simply perpetuating the problem.
A focus on quality rather than quantity will pay immediate practical benefits. It will ensure that scarce sales resources are focused on the opportunities that are winnable, rather than wasted on those that are not. And it will draw attention to any weaknesses or shortcomings in the actions that are required to achieve revenue targets while there is still time to influence the outcomes.