I've spoken in the past about the Sales Pipeline and how to use it to increase sales but now it’s time to review it again to see just what the next couple of months will look like.
A sales pipeline is simply a forecast that you or your salespeople prepare monthly which lists the customers that are likely to buy in a given time frame, the value of the sale and when it is likely to close. It is an essential tool for business owners and sales managers to identify where you are and where you need to be in order to meet budget.
Even if the forecast is well below where you need it to be, at least you are aware of it and can take steps to improve it and stay on track. Don't wait until the 2nd or 3rd week of the month when you realise that sales are slow to come in and you need more because it's usually too late.
Typically, I usually ask for a forecast at the beginning of the month and then again on the 15th of the month to see how we are tracking.
The important thing to remember is to use a 'weighting'. You may $500,000 in your pipeline but it's very unlikely that you will be successful in winning 100% of them so the forecast will be inaccurate. A weighting is simply a % that you apply terms of the likelihood of winning the sale. Here is an example of how to calculate:
Using this example, the salesperson needs to add more sales into their pipeline to ensure they reach their sales target of $100,000.
As a guide to the Probability you could use
Initial Communication - 10%
First Meeting/Presentation - 20%
Proposal Given - 60%
Negotiation/Verbal Commitment - 80%
Closed - 100%
Most CRM/Database packages (I use ACT or Salesforce.com) include Sales Pipeline management but it can be as simply as listing them on an Excel spreadsheet. Here are a couple of examples from Excel to get you started
Solutions Sales:
http://office.microsoft.com/en-s/templates/TC011457101033.aspx
Product Sales:
http://office.microsoft.com/en-us/templates/TC011457181033.aspx
This sales article was written by Karen Andrews,
Director of Shine Sales Solutions, a Sydney based Sales Coach and Sales
expert that works with businesses to increase their sales through
strategy development, sales coaching and mentoring.
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Smooth Sailing or Storms Ahead ? How to use the Sales Pipeline to predict your future
Why isn’t my salesperson selling - solving the salesperson puzzle
Hiring salespeople is a time consuming and costly exercise, so it’s important to get it right and keep it right. Unfortunately, not all salespeople are equal and managing poor performers is a common (and stressful) problem for many businesses, no matter what their size.
There are many reasons why sales people stop selling and why some just don't work out and it’s usually not the ones that they are telling you. Personally, I think the main reason salespeople fail to perform are due to lack of direction and little to no accountability. Salespeople, no matter how professional or how experienced need direction and need and expect accountability.
Salespeople can be your best asset or your worst asset depending on how you manage them. If you have a salesperson that is not performing, here are some reasons that might shed some light on the situation:
All care, no responsibility.
This is where you as the Manager or Business Owner don’t take responsibility for the success of your sales person and you simply dump everything into your salesperson's lap, hoping they will miraculously turn things around. You provide no leadership or support to the salesperson – just set and forget which is an extremely risky thing to do. I see this a lot in smaller businesses where the owner has little to no interest in sales or salespeople. If you employ salespeople, you need to be ask questions, be interested and be involved.
The Business Saviour.
Many business owners secretly hope that a salesperson will be the answer to their prayers; the saviour who will quickly start generating sales and increasing profits. While a good salesperson can make an enormous difference, it won’t happen overnight. You still need to invest considerable time and resources to market your company and to manage and develop your salespeople.
Not communicating expectations.
Salespeople need direction and they need to know exactly what is expected of them. Unfortunately, many Owners and Managers fail to communicate expectations clearly to their salespeople. When that happens, it's common for salespeople to think they're doing fine, whilst the Manager/Owner sees them as under performing and starts to get very frustrated. Communicate expectations (also known as KPI’s, key performance indicators) in writing from day one. Setting KPI’s on sales activities, customer meetings & networking events in addition to sales revenue, will ensure that sales remain consistent month to month.
Lack of Accountability.
When you are reliant on your salespeople to generate sales, why would you risk your business by not knowing how much and when the sales will come in? Holding a weekly team meeting to discuss the sales pipeline and sales activity is a simple way to introduce accountability. If your salespeople aren’t making sales at least your aware of it and can do something about it. Don’t wait until it’s too late. At the beginning of each month, have a performance review with each individual salesperson and discuss their performance for the previous month against expectations. If you have poorly performing salespeople, ask them to achieve specific revenue targets or tasks within a specified time frame. It will help you know whether to keep them or get rid of them.
Remember, if no-one cares what the salesperson is doing or whether they are making sales, why would they?
Hiring the wrong type of salesperson
There are two types of salespeople: those who can win new business (Business Development Manager or Hunter) and those who grow existing accounts (Account Manager or Farmer).
Most businesses want to employ salespeople who can generate new business, because they're already good at developing relationships with current clients. They want the type of salesperson who can make cold calls, build new relationships, and close a deal with a new client. This is much harder to do, requires different skills and has higher salary expectations.Be clear on what you want your salespeople to do so you can match the skills, experience and salary accordingly. If your salesperson isn’t selling, ask them what they have done in the last month to add to the sales pipeline and generate sales. This is where the majority of mistakes are made with salespeople – hiring an account manager find and close new business sales. They rarely have the desire or the skills to do so.
How much is enough?
Coming up with a fair and equitable commission scheme that works for everyone can be challenging. Giving away too much, too easily can make salespeople lazy and lose their hunger (not to mention frustrate the business owner or manager). Others can be too stingy or hard to achieve which does nothing to attract or keep the best performers. Remember, salespeople that win new business should be paid more than those who manage existing accounts. A commission scheme with an emphasis on commission rather than just a base salary will help to retain, reward and motivate ‘hunters’ whereas the security of a higher base salary will retain, reward and motivate ‘farmers’
Poor marketing and tools to support the salesperson.
Study after study shows that having a single approach to sales (such as cold-calling) won’t work on its own. Salespeople need solid marketing collateral, messages and campaigns that get prospects interested to meet with them. A well-ranked & effective website, email marketing and social media are great tools to generate leads that are completely free. They also need training and a solid understanding of the services and benefits you offer. The more time you spend training them and supporting them with marketing efforts, the quicker you will see them succeed.
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Achieve your Sales Targets with your Sales Pipeline
Being aware of and managing the amount in your sales pipeline each week, fortnight or month can have the single biggest impact to achieving your sales consistently from month to month and quarter to quarter.
It is an important forecasting tool that all businesses should use even if they don’t have salespeople, as it clearly shows how many sales to expect and when to expect them.
If your not sure what a Sales Pipeline or Funnel is; it is simply a list of all the prospective customers that have indicated some interest in buying your product or service. They will all be at different stages of the sale depending on their interest level and buying cycle and some will drop eventually drop out.
Information such as total sale value, probability of sale and expected close date should also be included to complete the picture.
The term “funnel” is used because you need to continually fill the top with new opportunities to ensure you have an even and consistent flow of closed sales coming out the bottom. The stages can differ from business to business (i.e. can be simpler with fewer stages), depending on how you sell to customers and what the buying cycle is.
It is important to make sure the funnel is always being topped up with new opportunities, that prospects are moving through the stages and sales are being closed. When you need to close some sales quick, it is easy to identify who is the closest to making a decision (thus easiest to close) by looking through prospects in the negotiation or solution evaluation stage.
The sales funnel is a great tool to help you determine if you have enough prospects and to reduce the impact of lost or delayed sales on meeting targets. It’s all in the numbers and that’s why sales is called a ‘numbers game’. To work out how much you need, follow my example:
- Start with your monthly sales target, lets say it is $25,000.
- Work out what the average sales value is, even if it is a rough estimate.
- Determine your sales conversion i.e. of all the first meetings you had or enquiries received how many of those where you successful in ‘converting’ from prospect to customer. e.g. If you received 20 enquiries and made 5 sales, you have a 1 in 4 sales conversion rate.
- So you will need ‘4 times’ the amount of your monthly target in your funnel at any time. If we go back to the example, you will need $100,000 worth of quotes or opportunities.
This sales article was written by Karen Andrews, Director of Shine Sales Solutions, a Sydney based Sales Coach and Sales expert that works with businesses to increase their sales through strategy development, sales coaching and mentoring.
If you liked this article, subscribe to our monthly Sales Success ezine. You will learn...
* Easy ways to increase your sales and grow your business
* Simple strategies to sell yourself, even if your not in sales
* How to generate sales easier and quicker!
Enter your details at the top of the page or click here
Build your Sales Pipeline and Boost Your Prospect Numbers
Do you get frustrated constantly searching for prospects and contact information? The traditional methods of building a list of people that you can market and sell to such as purchasing databases, driving around business parks and noting the tenants of buildings that you walk past are great, and they do work, however, they are costly and time consuming. If your looking for something quick and effective that you can do from the safety of your desk, try these:
1. LinkedIn
If you do an advanced search on LinkedIn you can search for contacts in a particular industry, location, position or a mix of all three (e.g. All Sales Managers in Sydney). It will give you their name and tell you if anyone in your network is connected with them, so you can ask your contact for an introduction.
2. Google Earth & Google Maps
Google Earth and Google Maps are great tools to find concentrated areas of business and to avoid having to drive around or randomly call through the yellow pages. If, for example, you have a client in Building A and you would like to find out who else is in that building that you can sell to (always smart to sell to their neighbours, it’s known as sandwich selling) or that location, a quick search on Google Earth or Google Maps will give you a list of the businesses in the building, the street and the suburb. Google Earth will also let you pan around the area and see other buildings and other streets.
3. Industry Association Websites
I have used these for years and it has been a great way for me to target an industry sector and get new appointments. Quite a lot of the Association websites will list their members by location or profession. A quick search will give you a list of their name, address and phone number.
4. Franchise Directories
Selling to franchises can be a very successful and very lucrative way to increase sales and help you to consistently meet your sales targets. This is where volume sales come in and when you have a critical mass of franchisees as customers, they tend to do the selling for you and promote your business through word of mouth and referrals.
5. Your Website
This one is mentioned a lot these days but I’m still amazed as to how many people don’t utilize their website to generate new enquiries or build their contact lists. Offering free tips, e-books or access to free resources and tips is a great way to build a marketing and prospect database. I send out information every 2-3 weeks on sales techniques, sales tips and free resources just like this blog article! It has been a great way of accessing people I would never normally come across as well as building my profile.
If you liked this article, subscribe to our monthly Sales Success ezine. You will learn...
* Easy ways to increase your sales and grow your business
* Simple strategies to sell yourself, even if your not in sales
* How to generate sales easier and quicker!
Enter your details at the top of the page or click here
This sales article was written by Karen Andrews, Director of Shine
Sales Solutions, a Sydney based Sales Coach and Sales expert that works
with businesses to increase their sales through strategy development,
sales coaching and mentoring.
What to do when the sale stalls?
How many stalled sales do you have in your sales pipeline right now?
You feel as though you have done everything right. You have connected well with your prospect, they have explained their business and relevant personal issues and you are working directly with the person who has the authority and ability to make the decision. They have given you all the right buying signals but the only problem is you can’t get them to sign on the dotted line and now they aren’t returning your calls.
In order to jumpstart a stalled sale, you must first diagnose the reasons behind it. The problem may not be that the sale stalls, the problem is that we just don't recognize it soon enough and waste valuable time and resources on dead-end opportunities.
Little connection to a critical business issue
How is your solution addressing a business issue for your customer or prospect? For each opportunity in your sales pipeline answer this question:
Why does your prospect want to buy this product or service?
If you cannot communicate how your solution can
- Improve revenue, productivity, qualify or efficiency
- Save time or money
- Solve a critical problem, challenge or frustration that the business is facing
Customers Are Busy
The end of a sale often becomes difficult when your customer or prospect stops returning your calls and emails, overnight. It appears as though they have lost interest and the sale has gone cold...Or has it?
Many of us find it difficult to get everything done during work day or experience unexpected problems which take our focus elsewhere and your customers are no different. In fact, the better the prospect the busier they are likely to be.
It is important not to panic at this stage and let the customer or prospect fall away or to annoy them with endless phone calls and messages.
Keep momentum by maintaining regular contact, acknowledge your client is busy and perhaps ask them when would be an appropriate day or time for you to call and follow-up.
"I Want to Think it Over"
When a customer says, "I want to think it over," this may not always be the case. Some are actually saying "thanks but not thanks" to avoid a potentially negative and uncomfortable situation and some genuinely do want to think it over or talk to their business partner. The important thing is to know the difference between the two.
Some people just need a little push and a little help to make the decision. They may find making decisions difficult and are afraid of making the wrong decision. To many, no decision is the best decision.
When the prospect says, "I want to think it over," it is important to acknowledge and respect what the client says. Smile and say "that's a good idea, this is an important decision and I completely understand your need to think about it" which will help the prospect to relax.
It important now to leave now or you will lose this person as a prospect and being the never-ending game of phone tag and follow-up.
Ask the prospect "Obviously you have a good reason for wanting to think it over. May I ask what the reason is?”
This gives you the opportunity to see how genuine the prospect is and to uncover their real concerns and objections and say “If we could do this, would that solve the problem?"
Fear of Rejection
A major obstacle to selling is the fear of rejection or criticism. This fear can jeopardize all your hard work as your sales simply slip through your fingers and go cold.
Fear of rejection is a genuine emotion that many people in sales experience at one point or another and can be overcome through practice and by changing your mindset about sales and follow-up. Sales is not about being pushy and arrogant, it is about you communicate your ability to help and solve problems.
Did you know that one of the biggest complaints consumers have about salespeople is that they don’t follow up?
Your customers are busy too, so making a quick courtesy call to see how the decision is progressing may actually be doing them a favour. Who knows, they may have been meaning to call you all along but have simply been too busy.
This sales article was written by Karen Andrews, Director of Shine Sales Solutions, a Sydney based Sales Coach and Sales expert that works with businesses to increase their sales through strategy development, sales coaching and mentoring.
If you liked this article, subscribe to our monthly Sales Success ezine. You will learn...
* Easy ways to increase your sales and grow your business
* Simple strategies to sell yourself, even if your not in sales
* How to generate sales easier and quicker!
Enter your details at the top of the page or click here
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