Potential: Revealed

Strategic Thinking, Innovative Ideas, Growth Marketing, and Revealing of Potential

Archive for December, 2008

Business slowing? Then Accelerate!

It has been a difficult 2008 — almost every business would agree, unfortunately. In 2009, the natural inclination might be to hunker down and weather the economic storm (that is forecasted to rage well into if not all the way through 2009). Recently in working with a client in the business-to-business software market, we decided we’d do the opposite — they’d accelerate their sales efforts with a strategy to gain market share and position when others were pausing and flat-footed.

Our thinking is: regardless of economic climate, the success of any business depends on acquiring, growing, and retaining profitable relationships with customers. Customers (your best ones, especially) have complementary aims. They also want to grow and to maintain their profitability. My client is convinced that in tough times — now more than ever — an aggressive selling stance, tuned by exploiting deep and precise knowledge about such things as which customers are buying and why, which reps and channels are being most successful will push them past their competition.

To pull this off requires insight about your customers and prospects that are in your sales pipeline and managing that pipeline more effectively than you ever have before. In fact, the heart of any sales process is the sales pipeline – where sales opportunities are managed from qualification to closed sale. Sales pipeline performance is essential for breaking out from the pack in 2009, and reaching the level of success you desire your business to achieve.

Many businesses struggle, though, with myriad pipeline management challenges such as determining which accounts should be of highest priority, what actions will best spur the sales process, and whether and how to reapportion pipeline opportunities to maintain a healthy distribution across the sales force. The results of failing to address these challenges include lengthening sales cycles, stalled opportunities, and results versus forecast that bring unpleasant surprises.

The difference then for the most successful sales organizations is identifying and taking the intelligent steps needed to achieve measurable improvements in sales pipeline performance.

Addressing the challenge

In order to address the challenge, I worked with my client to define clear steps to take to enhance sales pipeline performance in 2009:

Define Your Sales Pipeline Process

As a foundation for success, it is critical to understand the distinct stages of the sales pipeline. Each business is different and the investment of time to define a process that specifically matches your business needs is well worth the time. By way of example, the stages might include lead qualification, customer need assessment, opportunity prioritization, customer decision, and opportunity close out. Understanding each stage in enough detail to be able to describe clearly how to advance from one stage to the next is critical. Another key aspect to understand and document is the typical time required to move from one stage to the next — this aids in assessing whether an opportunity is moving along appropriately or is stuck.

On-demand Visibility into Opportunities

Across a given time horizon, sales opportunities will evolve with new opportunities emerging and some current opportunities declining in priority or ceasing to be worth pursuing. On-demand visibility allows rapid and appropriate response to these changes. Visibility that also includes customer and current opportunity profitability, stage within the pipeline process, and the latest activity history all provide insight and illuminate the overall health of the pipeline. A healthy pipeline will have opportunities distributed in a relatively balanced manner across all stages – and an uneven distribution provides cause for addressing the imbalance before it has a negative impact on the sales forecast and ultimately realized revenue.

Create a Process to Monitor Performance

Improved performance can only be achieved and sustained if the on-demand visibility is integrated into the larger context of the sales planning and execution process. A typical process might include sales management setting sales rep revenue targets, reviewing the pipeline periodically for performance and issues, updating forecasts and reviewing results against efficiency and effectiveness metrics while sales reps throughout are qualifying and managing pipeline opportunities and updating data about each opportunity.

Preferably across and within this process management and the sales team will have aligned goals. Achieving this alignment depends upon metrics that go beyond merely high-level revenue targets. Examples of ideal metrics include:

– percentage of sales reps meeting quotas
– number of leads in the pipeline (by rep, type, age, geography, etc.)
– pipeline velocity (expected time for opportunities to move from one
  stage to the next)

Providing on-demand access to this information – to sales management as well as sales reps – facilitates the necessary alignment and unambiguous communication throughout the sales cycle.

Combine Analytics and Action

With an appropriate foundation of visibility and on-demand information, a business can not only be more proactive with their planning – it can harness analytics to drive well-timed and appropriate action. For example:

– what-if analyses to test actions that might close pipeline gaps or free stuck opportunities
– mining customer buying behavior to help sales and marketing identify customers with the highest propensity to buy

Through this more advanced use of analytics and insight, the broadest possible set of stakeholders can be engaged – and kept well informed – and doing so can ensure unpleasant surprises are avoided and breakout performance goals are reached in 2009 … and beyond.

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