Four fundamentals of managing a sales pipeline
, June 18, 2014
By Ahmed Al Akber
One of the things that keeps most professionals and professional service firms up at night is in determining where their next source of income will come from.
The very nature of B2B sales makes it hard (or impossible) to guarantee a level of future income.
This can be because of a lag between marketing and business development activities and the results they provide: my record (which I’m not exactly proud of) is over two years to sign a major deal with a government agency. Furthermore, not all business development activities produce results, so its extremely important to have a way of managing this uncertainty.
Managing your sales pipeline is about providing your business with a clearer picture of it’s future success, and will help you to manage your time much more effectively.
There are many factors to consider that are relevant to your business, such as how long your sales cycles are, the number of clients you need to service, and other factors.
But to keep things simple, here are the fundamentals you should have in place for most businesses, with an illustration of how you would secure one client:
1. Define your ideal clients. Who would you like to work with in the future? These are people you suspect may have a need for what you offer. For the sake of illustration let’s say you have eight ‘suspects’ to start with.
2. Market to them directly. The most effective way to do this is to share something valuable with those suspects. Inviting them to an event you are hosting or sending them some useful information is a great way to showcase your expertise, while not asking for anything in return. If done well, you’ll have a percentage of those suspects that tell you they may need your services. 50% would mean 4 ‘prospects’ with a real opportunity for you to win.
3. Offer a proposal to qualified prospects. You now need to qualify the prospects to ensure that you can help them and offer a proposal. Let’s say 50% ask for a proposal, which means you submit two proposals to two qualified prospects.
4. Close the deal. You now need to follow up and have a conversation with the prospect to close the business. A closing rate of 50% means you should have one of your proposals accepted. Now here’s the clincher: if eight suspects yield one paying client, then how many suspects do you need to communicate with to achieve your sales goals? Once you have that figured out, you’ll be in a better position to know where to focus your time.
So there you have it - understanding what it takes to manage a pipeline will open up a variety of opportunities to secure more clients for your business.
* Ahmed Al Akber is the managing director of ACK Solutions in Bahrain.