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How to Build a Sales Pipeline

I was asked this question recently and thought I would try to answer in this post.  As simple and easy as it sounds, some intricacies need to be worked out before you ever begin.  My last article, “Cold Calling is Dead-Or Is It?” addresses an old method of simply picking up the phone and dialing.  Not much in that thought process! Nor, much success!

The trick (or secret) is to use your time wisely to build as big a sales pipeline in the shortest amount of time.  After all, the clock is ticking and the sooner you get a score on the board, the easier it is to garner some breathing room.  So where do you start if you have what is considered a fairly greenfield territory? Or your company’s presence has been minor?

You start with a collaborative meeting with your sales manager and the lead generation support (I talk more about this further down) Work with marketing to get awareness and interest in your area.  If you do not have any marketing effort at your disposal, your job is going to be a bit tough.  At the very least, you will have a sales manager, and between the both of you, you need to understand your target market, and how best to segment that market.

Building your pipeline is a bit like asking someone how to paint a picture.  You are going to get several different answers and many methods. I have seen this question asked in an interview.  It is unfair to ask someone without first establishing the premise for the question because it can have many different answers and none of them wrong.  Usually the person asking is looking for the same answer that is in their head so answering it differently does not make it wrong, just different.  Unfortunately, some interviewers do not see it that way.  That is why I think you need to understand from a collaborative view, what management is thinking and form your strategy and tactics from there.  There is not really a wrong or right answer because it can go both ways depending on the end objective.

You have to ask yourself two questions: Am I looking for numbers or am I looking for qualified numbers?  Let’s assume the latter. Qualified leads are the life-source of every company.  Why?  These leads have had a positive response from a potential customer.  If handled correctly, they turn into sales.  Lead nurturing is an absolute necessity to keep this potential opportunity from dying on the vine or your competition to swoop in and steal this right from under your nose.
Earlier I spoke of lead generation. Regardless of the size of a company, lead generation and nurturing is a requirement; period.  Your field sales force needs to be closing sales, not seeking qualified leads.  This role is one of the most overlooked, yet one of the most vital position for supporting a field-based sales force.  When you ramp-up your sales force, place serious importance on how this team is going to be getting their leads.  Do you know why companies always have a ramp up time?  Partly because of the training, but mostly because of the time to get there territory in order.

I realize there are other methods, but these really just lend themselves to the efforts of a dedicated lead generation machine.  Personal leads, contacts, and luck all are good, but a coordinated marketing and lead generation plan should be an integral part of sales.

If you find this useful, Contact Me or better yet, leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this with the tool at the beginning of the article!

Happy Selling!

Ed Warner

Comments Off on How to Build a Sales Pipeline
Leads, Sales Advice, Sales Basics

Cold Calling is Dead-Or is it?

Cold Calling is NOT DEAD, but cold calling to decision makers IS! In fact, it has been for a very long time.  So why are companies refusing to acknowledge the fact?   At one time, it was an effective tool and therefore carried over as a tool into today’s business environment.  The problem is, businesses are not operating the way they did in the past, even as short as two years ago, so why continue to embrace an old, old way of generating revenue?  I will give that answer to you in this article.

A paradigm shift is happening in the business marketplace in how you engage a customer.  Very few are adept at noticing the shift simply because of its subtlety.  Customers are not going to tell you why they do not want to talk to you or respond, so I will.  Today, to call a customer, you MUST earn the right to call.  That right encumbers you to bring value, REAL VALUE, not sales rhetoric.  You do not have the inalienable right as a salesperson to call on whomever you choose.  Your right does not come from YOUR belief in your product or service to be the next great innovation must-haveRemember one thing: No one cares about your widget and what it can do, except you.

The only way you earn the right to call upon the decision maker is by referral or by their direct invitation.  The referral can come from an internal or external contact.  The biggest percentage of ROI success is by referral; not by picking up the phone and playing dialing for dollars. To have a referral you must have a relationship.

Cold Calling is reserved for obtaining referrals and your efforts should be in building relationships to gain those referrals rather than the drive-by-sale approach.  With the top-tier talent in the market today, you need those people in front of the decision makers, not searching for them.  An article I wrote discusses the pros and cons of this level of talent.  So why do managers and companies still insist on doing it?  Because it is the easiest to mandate and fastest way to show “mission accomplished” but at the same time, the least effective in closure.  The other reason is human nature:  “I did, my father did it and my grandfather did it.”

Referrals are an extremely valuable and volatile asset.  This person has the potential to supply what would seem like an endless supply of business, but only if you cultivate the relationship in a proper, ethical process.  They also have the potential ability to shut the faucet off just as fast as they turned it on.  Those that will be your reference need to be cultivated and nurtured just as any other customer would.  Do not expect to pick up the phone and ask for a referral if the last time you spoke was when the deal closed.

Referrals can come from not only customers, but also partners that see the value your product brings.  To draw upon my marketing background, you want a PULL strategy where customers are asking for your product rather then you pushing it upon them.  The only way to get this strategy to be effective is to show REAL value.  The most effective of the 4Ps in marketing is using promotion and drawing upon publicity rather than advertising.  People trust someone else endorsing products far better than any brochure or advertisement you can create.  This all ties back to relationship selling.  If you failed to build the relationships, how do you expect to obtain a referral? (Rhetorical question)

I will close out this article with one last comment about cold calling.  I know this article is going to ruffle some feathers, but that is a good thing.  My intention is to stir debate and foster an exchange of ideas; not create civil unrest.  I realize people have had success using the cold calling method, but the return on your time and effort versus other methods (this article for instance!) is at the bottom of the ROI list.  You can tell me about all the $$$ you have made, but my comment would be how much more $$$ could you have made?

If you find this useful, Contact Me or better yet, leave a comment.  If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this with the tool at the beginning of the article!

Happy Selling!

Ed Warner

6 Comments on Cold Calling is Dead-Or is it?
Sales Advice, Sales Tips

Is Your Sales Forecast Inaccurate?

A few years back, I worked for a company that spent more money, time, and effort on sales forecast accuracy than what most companies pay in corporate taxes.  There was a complete department that had 3 permanent employees and at any given time 2 temporaries.  Why the expense?  While most would say spending this amount of money was ludicrous, this company’s accuracy in sales forecasting was 8%.  At the time, this was phenomenal compared to other companies in the same industry.

In later years, I worked for a Fortune 500 company that demanded 4% forecasting accuracy.  Moreover, they got it too!  Being a public company, how the street loved them!

So why are most companies lacking in their accuracy?  I think it comes down to a couple of things.

  1. Pressure to make a number that executives have not been realistic in obtaining.
  2. Not getting input from the rank and file members of the salesforce.

Too often, I have seen front line managers take numbers, pad them, then pass them upstairs.  No two ways about it, this is just plain wrong.  I think this is unethical because it is now forcing a quota number on someone that was not involved in the planning process.  Crazy idea, but how about getting people responsible for what they were hired to do, generate revenue. When you get the by-in from the sales force, it now becomes a point of pride and ownership.  No salesperson I have ever worked with wants to tell their manager they won’t be making their forecast.

Despite loads of money spent on CRM and SFA tools and software, along with hours of time dedicated to reviewing the forecast, it is still way out of line.  Why?  In all my years in sales, I have never seen a company do a detailed analysis on a territory other than do say “it did $$$ last year and we expect $$$ this year”.  What does this say about the coming year, or the next?  Nothing, absolutely nothing. When a new sales person starts a territory, unless a detailed analysis has been done, how can a quota be set and handed to them with an honest expectation of meeting that quota?

The fundamental flaw in all forecasting is that we are asking the wrong questions.  It does no good to set-up a sales rep for failure from the very beginning by overestimating the territory.  This is like having no target; you are going to hit it every time.

When salespeople, especially those who are behind are asked to update the forecast, are you really expecting accuracy? Organizations are kidding themselves if they do.  The opposite end of the spectrum has the top reps ‘sandbagging’ or understating their pipeline.  The point is, if done correctly, the accuracy is built from the ground up with everyone’s acceptance, and no one has to be double checking numbers.

If this sounds familiar in your company try these:

Hope you find this useful. Please let me know by leaving a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

1 Comment on Is Your Sales Forecast Inaccurate?
Experience, Sales Advice, Uncategorized

Judged by Your Rolodex

Sound familiar in some way?  Some think size matters, others think quality does.  I am of the opinion that sales organizations that look for sales people with a big Rolodex are putting the cart before the horse.  What really surprises me is that the word “rolodex” still exists in the vocabulary of the modern salesforce.  With today’s technology, there are far better places to effectively manage your contacts.

Having a well stacked contact list is not necessarily the best hiring criteria of a sales person, yet it still carries considerable weight.  I believe it is one of the worst measures and needs to be removed from the “must have” list.  Let me explain why.

The current state of social media lends itself to everyone having a big contact list.  I like the analogy of your phone book’s white pages.  If you live in or near a metropolitan area, the white pages contain thousands of names.  Do you know everyone included in the phone  book?  No, and that is my point. Same applies to your contact list.  The amount of time necessary to keep up with a rolodex that size leaves no time to do what a salesperson was hired to do: SELL! I’m not saying someone doesn’t have that many contacts, I’m saying that the relevance of the names to the position being filled is probably a fairly low percentage.  I say “probably” because the majority of salespeople do not move to another company that is selling the same line of products.  Ok, granted some do, but most don’t.

With today’s economy, an experienced sales professional (bag carrying or manager) is expected to have a list of contacts.  Personally, I keep 4-5 thousand names.  Sound like a lot?  Not really when you consider my list is broken down into an industry list.  Those individual lists are small in comparison to the whole.  The key is they are valid!

What I find truly amazing is sales managers still believe when they find a candidate that states they have contacts at Fortune 500 companies including the CxOs,  that this is going to be the hiring difference.  What makes you think IF you did have those contacts that the company would just rip out their existing product and plug yours in?  For every contact you have, an investment may not have run the course of the ROI.  There are few questions hiring mangers need to ask themselves:

There are situations where having the contacts is a good thing.  Selling services, which can and should be viewed as an intangible is probably a better use for the contact list.  In conclusion, the next time you hire someone, don’t ask about the size, rather how many names are relevant to the position.

If you find this useful, Contact Me or please leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

1 Comment on Judged by Your Rolodex
Experience, Hiring, Sales Tips

Sales Talent- The Horn of Plenty

Be afraid, be very afraid of what you wish for. 
Ok, perhaps a little melodramatic, but seriously, as the economy begins to pick up so will the inevitable hiring.  This is where caution needs to be exercised.  I see planning taking place in all industries and in all different sizes of companies.  This planning is turning executives into “wide-eyed-Christmas-morning-children” just thinking about the level and sheer number of top-grade sales talent presently in the job pool.

The fallout of the economic recession left extremely talented sales professionals in one of several states of flux.  Either currently out of work, doing less-than-their-potential, or covertly looking for the next position.  Either way, senior sales people are out there.  The rub is, companies are looking to acquire this talent, yet they do not have the “infrastructure” to support this level of talent.  The opportunity to obtain this talent has never been better, and quite possibly will we never see this plethora of talent sitting idle again.

Sales managers coming out of regular or special planning sessions need to understand how extraordinary this level of talent is and how to quickly adjust to accommodate them.  If you made the commitment to raise the level of sales standard in your company by hiring the upper echelon, then you need to understand the following basics:

  1. What makes them different
  2. What motivates them
  3. How to interact with them

Understand that personalities at this level are mostly of the “A” type and nothing should be done to counter what works for them.  After all, you are looking for the best, right?  Doing so could signal an implosion of success and leave you as a manager holding the bag that just exploded and wondering what happened.

Several years ago, I worked for one of the biggest software companies in the world.  This company had a HUGE pool of top-level salespeople.  Yet, they did not possess the infrastructure to guarantee their salespeople’s success.  Why?  Because they didn’t understand the complexities of this group, nor what it took to support this level of talent.  At the time, most other companies didn’t either; and still do not.  The damage this did was to put the mark of “unsuccessfulness” on these people.  There were those that were good and did well, but there were a lot more that didn’t fair as well through no fault of their own.  They were just as talented.  The reason: No SupportThe company basically said here’s your territory…go get’em! The lesson learned was a hard one for every software company at the time.  The bottom line is they gave sales and market share away and never knew it.

So what does this all mean?  The level and number of talented individuals in the labor pool right now is enormous. Not every company needs this level of talent.  If yours doesn’t, then don’t drool over something you don’t need.  If your company does, this use this list as a starting point for successful onboarding.

These are just a very few considerations you must think about.  The biggest and most overlooked is lead generation.  Let’s face the fact here; these people are going to command $6-figure base salaries.  Do you want to pay this kind of salary for someone to cold call or close business?  I would hope the latter, but you might be surprised to learn some managers today don’t understand this logic.  If you don’t understand this, then you don’t need this level of talent…period!!

If you find this useful, Contact Me or please leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

5 Comments on Sales Talent- The Horn of Plenty
Experience, Hiring, Sales Advice, Sales Tips