From the day the first sale was ever made, to the day the last sale is made, one thing will always remain true...
Pipeline will always be KING in sales.
Looking back at my time leading sales teams, one of the main reasons for a sales rep missing target was because they hadn't built enough pipeline. If you look back at when you've missed target, how many times would you have actually hit target if you had generated a few more opportunities?
Sales pipelines work like this...
Let's say you have to make 5 sales to hit your sales target. You need to prospect and build a pipeline of opportunities that you work to close at least 5 to hit target.
The problem is it's not that simple!
Here are some of the common mistakes that salespeople often make with their pipeline:
1) They don't find ENOUGH opportunities to hit target
A lot of sales reps don't generate enough opportunities each month to hit target...
Let's say you need 5 sales to hit target as we mentioned above. Unfortunately, a common trap that salespeople fall into is only building a pipeline of 5 opportunities. The reality is if you build a pipeline of 5 opportunities, not all 5 opportunities will close. Which is why a lot of salespeople end up not hitting target.
The key is to understand your close ratio.
If you close 50% of your pipeline, you'll need 50% MORE to hit target. So to hit 5 sales, you'll need at least 10 opportunities in your pipeline to hit target. If you close 25% of your pipeline you'll need at least 20 opportunities to be able to hit target.
2) They live in pipeline DENIAL
Far too many salespeople refuse to accept the reality about their pipeline...
They'll always tell their sales managers that their sales pipeline is amazing, but in reality, it's not. Unfortunately whilst this attitude will keep their sales managers off their back, it rarely results in the salesperson hitting target and often results in the salesperson struggling in the long run.
Pipeline honesty is key to sales success.
If an opportunity has gone cold, if they're not responding to you, if you haven't fully qualified them, anything that makes the opportunity questionable, take it out of your pipeline. Leaving it there will only cause problems.
3) The celebrate the OPPORTUNITY over the sale
Some salespeople make the mistake of celebrating the opportunity before it becomes a sale...
I've encountered many sales professionals who make SO MUCH noise when they generate a sales opportunity. Now don't get me wrong, I'm all for celebrating in sales, at every stage of the process. The problem is, to a lot of sales reps, that's the peak. The celebrate the opportunity so much they no longer have the drive to do all the work required to close the sale, and what often happens is the opportunity goes cold.
Pipeline is king, but closed deals are life.
Build your pipeline up with more than enough opportunities, and then make sure you put in the hard work to close as many of them as you can. It's ok to celebrate creating a new and exciting sales opportunity, but true success comes the moment the deal is signed (and the customer is happy!).
4) They STOP prospecting when they've got enough opportunities
Some salespeople spend ages building their pipeline or they run out of leads, and then stop...
Now I know it's hard work building pipeline, it's exhausting! All the efforts required to make loads of calls, send loads of emails, send loads of LinkedIn messages along with everything else, it is draining. So when you do finally have enough opportunities, it's easy to want to just focus on converting those. The problem is, each time one closes, your pipeline shrinks.
Building pipeline is a 24/7/365 thing
All-day, every day, every week, every month, every year, prospecting and building pipeline should never stop if you work in sales. The best sales professionals out there are prospecting all the time and never stop because they know they need to keep feeding the funnel. For each sale that you close you need to generate several more opportunities, to be able to continue closing sales.
This is why pipeline is KING!
No pipeline = no sales.
It's not just "Always Be Closing" in sales, it's also "Always Be Prospecting". You need to keep that pipeline full and work on adding new opportunities all of the time. My top tips:
Qualify, qualify, QUALIFY - Put as much effort into qualifying your opportunities to make your pipeline as refined as possible. Understand their budget, their timeframe, their urgency, their needs etc. All this information will help your pipeline quality massively.
Never stop FEEDING your pipeline - Prospect all the time, make it a habit, make it a part of your daily routine. Remember for each sale you close, you'll need at least 2-3 new opportunities to replace it (as some won't convert).
Be HONEST with your sales manager and yourself - Pretending that your pipeline is great and you'll definitely hit target will only hold you back. Be honest, if you need help, ask for it. If you need more opportunities, focus on prospecting. If you need help closing, ask for it.
Celebrate your opportunities AND your sales - Creating a new sales opportunity is an achievement, be proud of that! But also remember that's only part of the process, you need to then work on closing the deal to really win.
I hope you enjoyed this article!
I'd love to know YOUR thoughts/experiences with building sales pipeline. How many EXTRA opportunities do you generate each month to factor for drop off? Do you always build plenty of pipeline, or could you work on generating more? Let me know in the comments :)
Thank you for taking the time to read this blog! If you enjoyed this post please click LIKE and click SHARE to share it with your network. If you enjoyed it please do take time to read some of my other recent posts:
About the author:
Daniel is also a highly in-demand international keynote sales speaker, is the UK's leading sales blogger, and is also the Founder and Owner of LinkedIn's most popular sales publication, The Daily Sales. With a global audience of over 600,000+ followers and growing by thousands each week, his content reaches millions of salespeople far and wide.
To inquire about Daniel keynoting or speaking at your company or event, or to find out more about his 1-day and online LinkedIn/Social Selling Masterclass please email firstname.lastname@example.org.