sales pipeline | No Smoke and Mirrors

Do You Have A Sales Pipeline or Pipedream?

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In the complex and often unpredictable sales landscape, differentiating between a realistic sales pipeline and an elusive pipedream is essential. Understanding these contrasting concepts and mastering their nuances can enable sales professionals to maximize productivity, streamline strategies, and enhance results. This comprehensive article dissects these concepts, explain their implications, and illuminate the road toward more productive and strategic sales ventures.

Understanding the Sales Pipeline and Pipedream

The Sales Pipeline: An Operational Lifeline

The sales pipeline is a vital strategic tool, functioning as a visual snapshot of where prospects are in the sales process. It serves as the backbone of sales operations, offering a comprehensive view of pending sales and facilitating reliable revenue forecasts based on the likelihood of deal closures. A robust, well-maintained pipeline is the cornerstone of predictable and stable revenue.

The Pipedream: A Mirage in the Sales Desert

In contrast, a pipedream in sales signifies a deal that, despite its enticing allure, is unlikely to come to fruition. It often stems from overly optimistic assumptions and can lead sales professionals into the trap of investing resources into opportunities that offer little to no return. Sales leaders mistakenly share the information in their sales pipeline with their CFO, and that data is used for the senior leaders and shareholders. If your team has a pipedream and not a sales pipeline, it is just a matter of time for you to feel significant friction as we close 2023.

Delineating the Difference

The distinction between a sales pipeline and a pipedream hinge on the principles of reality and feasibility. While a sales pipeline represents tangible progress of leads through the sales cycle, a pipedream rests on fragile hope for sales prospects that may never materialize. Unfortunately, more than 50% of salespeople are not trained in selling skills. As a result, they are often overly optimistic and need help distinguishing between genuine buyer interest and put-offs.

The Impact of Supply Chain Constraints on Sales

Supply chain constraints have provoked a unique response from buyers. Anticipating shortages and delays, many have begun to over-order, hoping to ensure their required quota is met. Though born out of necessity, such practices can lead to inflated sales pipeline figures.

This inflation of sales orders can distort the perception of a company’s sales potential, creating a mirage of a booming business that, upon closer examination, is based on uncertain and potentially unfulfillable orders.

The Shift to Smaller and Less Frequent Orders

As the dust settles, a new trend is taking shape – smaller and less frequent orders are becoming the norm. Though this shift could be construed as an economic warning sign, it’s not necessarily indicative of a recession on the horizon.

Instead, this trend reflects strategic inventory management practices spearheaded by CFOs. As businesses work through excess stock, order frequency has decreased, leading many optimistic sales pipelines to morph into doubtful pipedreams.

Sales Pipelines vs. Pipedreams: Unmasking the Current Realities

The Balloon of False Hope

In the present climate of excess inventory and dampened demand, many once-promising sales pipelines are inflating into balloons of false hope. The perceived sales potential from extra orders may be merely pipedreams as demand dwindles.

The Imperative of Pipeline Auditing

Considering these revelations, the importance of auditing sales pipelines has never been more pronounced. Companies must meticulously qualify each order to discern opportunities from pipedreams and update their forecasts.

I have all my clients auditing their pipelines now, and one client discovered approximately $2 million in products they planned to ship in 2023 would not send. The impact of such a large order and profits from that order trickling to our bottom line is enormous. This team felt they had plenty of orders and an operations plan to deliver the revenue and make their sales plan promised to their investors. Luckily, we have several months to implement a revenue acquisition plan with current, inactive, and targeted new customers. The sales motions this account must accomplish now are much different than their plans just 30 days ago.

Identifying a Pipedream: The BANT Method

The BANT method – a well-regarded acronym for Budget, Authority, Need, and Timeline – is an incredibly effective qualifying strategy employed by sales professionals worldwide. It’s longevity and widespread adoption is a testament to its effectiveness, aiding sellers in evaluating the potential of prospects quickly and comprehensively. Using this method, sales representatives can efficiently gauge a prospect’s financial capacity, role within their organization, business needs, and the expected timeframe for implementation.

The BANT methodology is easy to remember but requires a nuanced understanding to apply effectively. Here’s how you can leverage each criterion:

Budget

Understanding a prospect’s budget enables sales professionals to gauge if a candidate can afford the solution. The probability of converting that lead into a sale is low if the funding is insufficient. Probing questions like “Have you allocated a budget for this purchase?” can help ascertain this.

Authority

Does the prospect hold the decision-making power? If not, sales representatives must navigate their way to the key decision-makers. Without their buy-in, the deal is unlikely to materialize. You might ask, “Who else, apart from you, will be involved in making the final decision?”

Need

The most critical component of the BANT method is identifying the need. The offered product or service must fulfill an immediate requirement or solve a problem for the prospect. Sales reps should delve into the prospect’s business pain points and demonstrate how their offering addresses those issues.

Timeline

A prospect may have the budget, authority, and need for your product. Still, if they’re not planning to implement a solution shortly, it could signify a low-priority project that gets delayed or shelved. Establishing the prospect’s expected timeline can help manage expectations and sales forecasts.

Using BANT to Spot Pipedreams

Using the BANT method, recognizing a pipedream from a viable lead is significantly easier. If a prospect cannot satisfactorily respond to the BANT questions, the chances are that the information is a pipedream. The candidate might have expressed interest, but the lead will likely prove fruitless without the budget, decision-making authority, a clear need, or a feasible timeline. Redirecting resources away from these unlikely prospects to more viable leads can optimize productivity and increase sales.

The Bigger Picture: BANT and Sales Strategy

Understanding the implications of the BANT method is critical. It’s not just about distinguishing a promising lead from a pipedream; it’s about formulating effective sales strategies. By focusing on tips that meet the BANT criteria, sales representatives can concentrate their efforts on the most lucrative prospects, leading to improved conversion rates and increased sales..

Remember, the BANT method is about more than disqualifying leads hastily. It’s a strategic tool to understand where a prospect is in their buying journey and how your offering aligns with their needs. It facilitates a deeper understanding of your prospects, leading to more meaningful conversations, better customer relationships, and improved sales outcomes.

Conclusion

In the challenging sales arena, distinguishing between a healthy sales pipeline and an elusive pipedream is crucial. This discernment enables sales professionals to identify and qualify viable opportunities and avoid the pitfalls of unfruitful pursuits. Implementing systematic pipeline audits using the BANT method can ensure sales efforts are well-targeted and effective, steering your sales team clear from pipedreams and toward the promise of tangible, achievable sales.

Do you have a sales pipeline or a sales pipedream?

Do your salespeople understand the difference between buying signals and put-offs?

Do your sales leaders understand how to coach salespeople and help them move sales through their pipeline?

We suggest every sales team conduct a pipeline audit immediately. In this uncertain and volatile economic time, sales teams must know the sales they can count on in their pipelines and the new sales they will need by year-end to achieve the goal. We must avoid discovering mis November; we have a pipedream and not a pipeline. Teams must adapt now. Adapting often includes sales training in skills like discovery, qualifying opportunities and handling objections.

Let’s schedule a call if you would value help to audit your sales pipeline or to improve your sales teams’ effectiveness.

If you just discovered a shortfall in your sales plan and need to adjust your plan, we can help.

Are your Sales People Suffering from QDD?

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Your marketing team developed a lead gen strategy that seems to be dropping a number of potential opportunities into your marketing and sales funnel. The accounts feel like they have a good possibility of becoming orders since they are from your core industries and you know they are buying products and or services just like yours. You have been tracking what looks like a strong return on marketing dollars invested based on the number of new opportunities. The entire senior management team is excited and is waiting in anticipation of hitting the sales and profit numbers. However as the sales leader you are not seeing these opportunities moving along the sales journey from opportunity to prospect to lead, and you are not seeing closed sales dollars? Why? Your salespeople are suffering from QDD.

I get excited when a team finally embraces the concept of marketing and driving what should be warm opportunities to my sales team. They took the time to do the market work and determined problems their markets have and positioned their products as solutions to those current problems. They understand your company’s value proposition and have launched your message. The number of new opportunities is climbing each week and reviewing some of the account names you know they buy a product or service like yours…but you are not seeing new orders? How can this be? Having lived this scenario more than I care to admit, what you are experiencing is QDD; Quick to Disqualify Disorder.

As I have shared many times; “Salespeople are like water and they always find the path of least resistance”…In this case it is easier to disqualify a prospect than qualify one. When presented with new opportunities sales super stars say; “awesome, I know they buy products like I sell and I will one way or the other figure out the problems they currently have and sell them”. If your salesperson is suffering from QDD they say; “ah, I have heard of this company( even if they haven’t) , I tried to sell this company six years ago( one voice mail) , I doubt they will buy, they are probably happy with their current supplier and just price shopping us, so I will follow up.” Do you hear the difference in mind set? The sales star understands the value he and your products bring and is excited to help serve one more person. The salesperson suffering with QDD will “go through the motions” but already believes he or she will not sell the account. The sales star is seeking to serve, the QDD salesperson is focused on disqualifying the opportunity quickly so no one asks the status and next step to win their business. Who do you think will win the sale?

How do you know if you have someone on your sales team suffering from QDD?

By the Numbers

The first thing I do is look at the numbers…how many opportunities has this person been given in the last 3-6 months and how many went from possible opportunity to lead to close? Compare this to others on your team and if you find a disproportionate amount of opportunities are not turning into qualified leads, your salesperson has QDD.

By Mix

Review the product mix sold by your team. Quickly you should see a few patterns emerge. Look for anyone on your team who does not meet a similar product mix. What I am particularly looking for here is new products, sales from products you have been aggressively marketing. Salespeople suffering from QDD will have their product mix heavily weighted with older products or services in your offering.

By Margins

Assuming your marketing group has done their job and the products you have and are launching are brilliant solutions to unresolved market problems, you should have priced them at a higher margin based on the value they provide. Salespeople with QDD will have the lowest blended profit margin for their area of responsibility. They do not understand how to sell value so they take a commodity and relationship selling approach.

By Listening

Sales super stars will focus on the value, the value the customer will receive once their problem is solved. They are excited to help the customer, serve the customer they are shocked if they don’t move to the next step in the sales process. Salespeople with QDD will tell you their (your) customers are all about price and we are too high. The shame is when I interview buyers on why they do not buy as I do, rarely is price even on the list. What buyers do say is the salesperson did not seem to understand my problem, did not listen, and therefore I did not trust their solution. You very likely could of, should have won their business, but because your salesperson is suffering from QDD the buyer lacked trust. You will also hear another why you are not able to break into this account and it will sound something like; “he’s got a great relationship with his current supplier and won’t even consider us.” Relationships are important don’t get me wrong, however if a buyer trusts you can better solve a problem than a current supplier you should at least move to the next step in your sales process and not be dismissed so early.

View the CRM

Take time to review the CRM entries. Sales stars will be logging discussions, and have future appointments scheduled and maybe even new business quoted. Salespeople with QDD will have a series of entries that say; “left voicemail” and “sent email” and the prospects will only have one or two entries. Sales stars know you need to engage with buyers 8-10 times before activity occurs. QDD salespeople go through the motions, as if to say; “yes, I did my job, I made the call, but they obviously were not interested or they would have called me back,” They are focused more on showing activity than driving results.

So how about your sales team?

Are you hitting your sales and profit goals?

Do you have one salesperson consistently missing their goals?

Are you seeing this salesperson not moving opportunities through your sales process to the next level?

Are you concerned one or more of your sales team has QDD?

QDD cripples sales growth efforts. Arguably all good sales stars have a bit of ADHD , but this along with a compelling desire to serve and win they charge forward believing they have the talent and products to win. QDD salespeople believe if new sales were out there they would have already won them. They are not sold on how sales occur today and are waiting for things to get back to normal. Well, this is the new normal and they must adapt.

The first step in solving any problem is identifying you have it. If this post made you wonder about one or a couple of salespeople on your team I recommend you take the five steps above to learn if one of your team members is QDD. Aside from lost sales that could have, should have been won, I want to warn you QDD is highly contagious and must be identified, quarantined and cured as soon as possible. This condition is curable if the salesperson agrees they want to fix it. If you have a team member who does not agree they have symptoms of QDD and are not willing to change you must quickly remove them from the responsibility of calling on new prospects and possibly explore more of a service to existing customer’s role.

Increase Sales: Turn your “Sales Bucket” into a “Marketing and Sales Funnel” That Generates Revenue

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Steve Patrrizi new sales funnel — Steve Patrizi new sales funnel

In my last post I shared what CEO’s and business owners often share about sales: Why can’t it be more predictable, more systematic? The good news is it can. The unfortunate thing is most companies believe they have a marketing and sales funnel when in reality they have a sales bucket. A “sales bucket” is when all your opportunities, prospects and leads are all floating around together and many dying because you lack a process to help them buy. In a sales bucket opportunities that should become sales make a big splash when they enter your system but fail to leak out the bottom as a sale. In this post I will share how I have helped companies turn their sales buckets into revenue generating marketing and sales funnel generating revenue on a consistent and predictable basis.

When I hear a business leader say: What we need is a repeatable sales process. We need the sales guys to be more efficient at closing business and bringing in the revenue. What I hear them saying is : Why can’t my sales and marketing be more of a science and less of an art form? …it is too random, too unpredictable and it drives me nuts that I can’t count on the sales forecasts I am given.” These made me want to do some more research and answer the question: What is science?

At its very foundation science seeks to identify patterns. Through identifying and watching patterns, scientists uncover laws that are ultimately translated into math equations. These patterns follow one of two interwoven features; physical laws and environmental influences. With the common pattern of as high as 96% of leads going unsold…what is the pattern and what can we do to improve?

For companies who lack a marketing and sales funnel over the years the current market has only made this problem even worse. It used to be, back in the day, back when sales was the “keeper of the keys of product information” , marketing just had to dump prospects and leads into the top of the funnel and sales was responsible for pulling them through to a sale. The funnel and the function of the funnel changed as Steve Patrizi points out here. Today buyers are more informed and as much as 60%-80% of the buying process is over before they contact you. I read an article recently that shared the most important number in B2B marketing is 60%.

What does this figure mean for Marketing?

60% … This is no man’s land: a gap in the purchasing funnel that neither commercial function currently addresses.
The 60% mark is in that part of the mid-funnel that is critical in terms of driving the buyers’ consideration of a supplier for a potential purchase.
60% also means trying to build a dialogue with customers without having the advantage of a Sales rep’s one-on-one commercial interaction.
Finally, 60% means moving beyond the “qualified lead” mindset. In essence, once we have moved past the early stages of the funnel, we need a strategy for persuasion and attention-grabbing mechanisms.

Our job today becomes understanding how buyers buy, what common problems do they have, and turn our sales bucket into a slippery marketing and sales funnel that helps buyers buy. So how do we do that? What have I seen work? Below is the process I have used to help take the art out of sales and make it a much more predictable, forecast able, outcome.

Establish a common language – what does your team mean by a; Prospect, Inquiry, Opportunity, Lead?
Go into your market, ideally on four legged sales calls and clearly understand how your buyers buy and the criteria they need to make buying decisions.
Identify market truth’s
Map Buying journey
Create a marketing funnel that helps buyers buy
Stop the “sales insanity” and map a repeatable sales process that turns leads to sales
constantly sense and refine, adjust , be agile as your buyers change their processes change with them
Measure, measure, measure…
identify “the canary in your coal mine”, your lead to close %
Nurture your leads, improve your lead to close % by helping them slide through the funnel with what they need when they need it.

Do you have a sales bucket with opportunities that should become sales (leads you paid good money for already) dying?

Do you know why buyers buy from you and why they don’t?

What do your buyers need today to make buying decisions?

Do your sales people have the right sales tools to make the sales funnel slippery or is buying from you like sliding down a sliding board lined with sand paper and splinters?

Attention CEO’s and CFO’s; Do you have a “Sales and Marketing Funnel” or Bucket? …the answer may surprise you, take a short quiz and know for sure

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do you have a marketing and sales funnel or a leaking sales bucket?

“Wouldn’t it be great if we could have our sales and marketing run like our plant? We could have key indicators, a proven methodology, and process with predictable results…”I hear business owners and leaders say this to me often once they relax and truly share their thoughts and concerns. Far too often CEO’s and CFO’s think/hope their marketing and sales teams have a defined process that is efficient and effective to drive predictable results. Unfortunately, if you really understand and look at leading indicators what they think is a marketing and sales funnel is actually a sales bucket. In this post I will share how to determine if your team has a marketing and sales funnel or a sales bucket that leaks an occasional sale or two.

I was asked by the chairman of the board of a company to have lunch. He heard through his venture capital and private equity network what I do, and he was warned early on my approach is a bit different. I enjoy meeting new people and business problems are drawn to me. I enjoy learning new things, facing new challenges and each meeting like this one always teaches me something. Once we made it through the pleasantries it was not too long for me to hear his concerns;

Why can’t sales and marketing be like my manufacturing plant? Predictable, scalable, and provide me sales forecasts I can count on?

It drives me nuts to know we are spending so much money on marketing and I do not see an immediate and often long term return on that investment, but I am afraid to stop making it in case it would hurt the performance we are seeing.

What we need is a repeatable sales process. We need the sales guys to be more efficient at closing business and bringing in the revenue.

Based on our moderate to poor sales results over the last few years, do I have the right salespeople or should I be looking for new ones?

I feel like the CEO / President is asking for more money each year for marketing, but I am not seeing a corresponding increase in sales…why?

We seem to have high turnover in sales, we lost some good sales people and this has to be expensive and hurting our results.

About the time we finished eating he said; “what do you think? Is this something you can help with, can you fix sales problems like this?”

I have and often do “fix sales problems.” However more often than not what CEO’s and business owners want to hear on how to fix sales problems is not the way they anticipate. In most cases they think they have a repeatable sales process, but they don’t.

They think they have a marketing funnel that is dumping primed and ready leads to their salespeople and their sales people have a proven way to close them quickly. They think they need more sales training. They think they need to better motivate their sales people to perform. No, no, no and in most cases no again.

What I have observed in most cases is leaders, particularly those not from marketing and sales believe they have a marketing and sales funnel, but in reality they have a bucket, with an every so small hole in the bottom that occasionally leaks a sale or two. Left unchecked this marketing and sales bucket becomes a Chinese water torture to your senior leadership team as they try to explain and predict future revenues and ROI with owners and investors. As one thought leader just shared, what they think is a funnel of live and vibrant leads and opportunities is actually pipeline stench. The pipelines may look full and make you feel good in senior management meetings Monday mornings…but are actually full of dead and rotting opportunities polluting your entire marketing and sales process.

Do you have a Marketing and Sales Funnel or Bucket?

What is your lead to close %? Do you know it?
Do you have defined stages in the marketing and sales pipeline? What are they?
Can you share the # in each phase?
If I met with your latest new salesperson, could they share your repeatable sales process with me?
Does sales and marketing have an understood definition of the terms; opportunity, prospect, lead?
Can you tell me the average time a new person you engage with spends in your process until they buy or die?
Can you share the qualifying questions you use?
Do you have the top three buyer personas identified and have you mapped out their buying journey?
Have you added new sales tools in the last 6-12 months?
Does your web site speak in the tone of the problems you solve?

If the answers I receive to the above have three or more “no’s” you have Marketing and Sales Bucket not a funnel.

How about your company?

Do you have a “Marketing Funnel”, “Sales Funnel” a “Repeatable Sales process”?….are you sure? (you need to be)

What other questions could we ask to determine if you have a funnel of vibrant buyers anxious to buy and solve their problems, or a bunch of rotting dead leads just polluting your management process?

In the market of today there is no excuse to not have marketing and sales funnel that is a systematic process driven tool to maximize your team’s effectiveness and do so in the most efficient way.

So did this post make you nervous, anxious, and maybe a bit angry? As your team for the answers to the above that I use to diagnose teams I serve, and you will quickly understand your internal truths. Once you do, you are well on your way to driving a process that gets results. In my next post I will share some techniques I have used to turn marketing and sales buckets into funnels.

Assemble a 21st Century Sales Pipeline

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By guest blogger Dave Barnhart

Have you ever said, “If I’d known that before I bought, I would have chosen that one instead of this one.” ? That is Criteria Evolution at work.

There has been paradigm shifts in the way people ask questions, get answers, and make buying decisions. One of the casualties in that shift is the pre-sales conversation has been foreshortened. As a result, buyers are sometimes missing crucial facts that would otherwise cause them to make the buying decision in our favor instead of our competitor’s.

Case to point: The number one complaint by kitchen remodeling customers is the dust and trash created by the contractor, yet most customers are blissfully ignorant of this when they make their buying decision. A smart contractor would:

Institute procedures such as the use of an air scrubber to eliminate the problem.
Engage in a proactive campaign to make prospective customers aware of the problem and how you solve it.

Now imagine your prospect learned this information from your website, an article online you’ve written, or from a strategically placed testimonial. While your prospect is talking to contractors on his short list, what happens when she asks your competitor, “Do you use an air scrubber?” You’ve just eliminated a competitor who cannot answer ‘yes’, and done so with no additional incremental effort on your part.

There is only one way this happens:

You must view your website, collateral, and all of those online articles and discussions as part of your company’s sales team, each with a role to play.

Start by putting your successful sales under a microscope. Become intimately familiar with the journey your customers take from complete stranger to paying customer. What do they want to know? What resources are they using to educate themselves? How to they find you? What are their buying criteria? Who else is involved in the buying decision?

The Truth Will Set You Free But First It Will Make You Miserable

Expect to learn that some of the time, energy, and money you’ve been spending on sales and marketing are being wasted. Expect to discover you are losing sales in ways that never occurred to you. And expect to find things that are working.

With this information at hand you can begin to assemble a 21^st century sales pipeline – one that is tuned in to your customers’ buying process and actually helps them buy.

This post was provided by Dave Barnhart of Klaroty Strategic Marketing.
Klaroty Strategic Marketing is a marketing firm focused on web development, website design, social media, and marketing strategy. We are based in Phoenix, Arizona with clients throughout the US and Europe. Dave’s firm actually designed my No Smoke and Mirrors blog and I have sent many clients who wish to have a 21^st century web site that adds sales to Dave. Dave’s popular blog http://blog.businessbloggingpros.com/ helps business leaders learn how to engage with buyers in their market earlier in the buying process.