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By Joseph Houle
This economy cracks me up.Whether you like it or not, there’s business to be won out there. As my work takes me from convention center to convention center, I always look for-ward speaking with the sales managers from my competitors. While it is un-orthodox, it’s an opportunity to learn like no other.
For the past two years, my counter-part managers have gone from speaking of closed business and revenue growth to speaking about “pipeline.” At first, this was a sales term that made sense, but as I thought about it, the term had no connection to winning business. In most cases, the development of the pipeline becomes a meaningless exer-cise. As time went on, I re-labeled the term as “sewer line.”
An inexperienced and unrealistic sales executive will allow themselves to be caught up in the creation of the pipe-line as a way to forecast sales regardless of their ability to sell the exhibit. Sales forecasting is a notoriously difficult problem and inexperienced managers and AE’s learn the hard way that sales meetings, prospect interest and appar-ent momentum do not translate into closed sales in anywhere near the time and speed one would hope. Missing a sales forecast hurts every company, no matter what size they are.
Rather than viewing the process as a pipeline, view it as more of a sales funnel. As the qualifying process continues, fewer and fewer leads get through, allowing your organization to focus its resources on winning the business.
Changing a company’s mentality from creating a sales pipeline to man-aging a sales funnel is no easy process. As Winston Church once said, “There is nothing wrong with change, if it is in the right direction.”
After the success rate of a sales funnel increases and the sales team buys into the qualifying process, your
company will see the forecasting pro-cess become a pleasant and rewarding experience.
Leaders in the sales field must con-stantly evaluate where an opportunity is relative to the key sales milestones and if sales reps are realistically cat-egorizing various opportunities.
When my public speaking lands me in front of a large group of busi-ness leaders, I tell them to categorize the stages of each opportunity, further qualifying each lead in order to focus
the company’s resources. In the exhibit business, I catego-
rize the stages of my sales funnel as follows
Stage 1: New prospect; 10 percent probability, cold calling lead or show floor follow up.
Stage 2: Prospect engaged; 20 percent probability with lengthy con-ference calls about past experiences, and where their current exhibit house is not providing value.
Stage 3: Design requirements and
budget qualification; 40 percent prob-ability, major discovery requirements stage.
Stage 4: Proposal submitted and ROI analysis with client; 60 percent probability with building ROI analysis with customer.
Stage 5: Contract negotiations and getting final signatures; 80 percent probability and reviewing proposals, technically selected.
Before moving from stages, you must develop and adhere to a set of criteria on each and every sales oppor-tunity.
For example, before moving from Stage 1 to Stage 2, you must have made contact with the right person in the buying organization and have de-termined that there is a need for your product or services.
Before advancing from Stage 4 to Stage 5, you have determined that the details of the product or partnership have been discussed and agreed it’s a good fit for both sides. Also the pric-ing of the deal is in the client’s ballpark budget. Lastly, the rough timing of the close of the deal has been discussed.
When forecasting sales as an ex-hibit builder, try to match each sales engagement against the milestones/stages listed above. Notice that there are no stages at 100 percent probabil-ity. That happens when the contract is signed and deposits are received.
Actively managing the sales fun-nel, not the sales pipeline, is a great way to get the most out of your sales leads and prospecting efforts. Analyzing the progress of sales opportunities shows which deals are lagging and which are moving along faster than expected. This gives sales management an op-portunity to work with the sales teams to close as much business as possible, as fast as possible.
Joseph Houle is the vice presi-dent of strategic development at LAB Exhibits. He is available for speaking engagements and can be contacted via email at [email protected].
Sales; “pipeline” or “sewer line”?December 2010
Joseph Houle is the vice president of strategic development at LAB Exhibits. He is available for speaking engagements and can be contacted via email at
