The Pipeline Conundrum; Why it Pays to be Picky
Other than the sales team itself, the sales pipeline is perhaps the most valuable asset of any sales organisation. This is particularly true in expansion-phase businesses that are critically dependent on finding and winning new business as opposed to serving existing customers.
There’s no doubt that the volume, value and quality of new opportunities entering the pipeline has a profound impact on the success of the overall sales process – and yet in environments that are focused on quarterly performance, closing current late-stage opportunities often distracts attention away from the need to invest in adding new opportunities that will provide the foundation for future quarter revenues.
Without the necessary focus, programmes and process, it can be all too easy to discover that there is an uncomfortably large revenue hole with too few qualified late stage opportunities to be able to reliably make your number, that could and should have been identified and addressed earlier in the sales cycle.
Identifying the Problem
Given the relentless quarterly revenue pressures in many organisations, it’s hard to lay all the blame for this at the feet of sales people or sales management. They are often simply following their natural motivations – reinforced by compensation schemes and signals from executive leadership; to always close business in the here-and-now.
Identifying a potential revenue gap early can help and that’s where a new generation of sales analytics applications are proving invaluable. These applications can predict likely current and future outcomes based on past patterns of performance at every level, from an individual to the sales organisation as a whole and can help to identify deficiencies early in the cycle while there is still time to take corrective action.
These analytics tools can also help to identify opportunities for individual coaching, general skills training and – perhaps most useful of all – for systematic process improvements in attracting, engaging, qualifying and converting more of the right sort of prospects. The conclusions are often obvious: you can convert more of the right sort of prospects if you attract and engage more of the right sort of prospects in the first place.
The Value of Specialist Pipeline Development
However getting sales people who are under-pressure to divert enough of their attention from closing to opening can be a challenge – and it may not play to their strengths in managing already-qualified opportunities. That’s why so many complex B2B sales environments now include a pipeline development function that is exclusively focused on researching, identifying, developing and qualifying early-stage opportunities.
This function is rapidly becoming particularly valuable in situations where the vendor cannot rely simply on uncovering existing needs and active projects. In fact, it’s essential in any complex sales environment where the vendor is trying to uncover, develop and address previously unsatisfied needs, to create a new category of solution or to reinvent or disrupt an existing solution category.
In these environments, it’s both unlikely and positively undesirable to expect to fill the sales pipeline with prospects that are already “in the market”. In many situations, ‘need’ has to be created and carefully nurtured – by bringing a previously unrecognised issue to the attention of the prospect, or reframing their view of an issue they were already aware of and thought unfixable or not worth fixing.
These early-stage conversations are rarely “one and done”. Uncovering the prospect’s latent need often requires multiple conversations, backed up by careful research into the target customer and the monitoring of key trigger events. Frequently it involves calling around multiple touch points across the prospect organisation and the systematic nurturing of initial interest into a desire to learn more.
It’s not Telemarketing!
These are roles with very different requirements and expectations from traditional telemarketing or transactional inside sales. The vast majority of traditional telemarketers – whether employed by organisations or agencies – lack the curiosity, conversational skills and emotional intelligence to uncover and develop the aforementioned unrecognised needs.
In fact, the initial customer conversations at the top of the funnel need to be every bit as persuasive and well informed as the conversations later on in the sales cycle. But simple economics (and behaviours) preclude focusing well-seasoned, very highly compensated experienced sales people on this pipeline development function.
It should be obvious that when recruiting into these pipeline development roles you need to be looking for a particular set of attributes. And when you find the right individuals – often young, well-educated and personally ambitious – they will often see the role as a stepping stone to professional field sales. Many see it, with justification, as a transitional role.
Managing these roles is not without its challenges, either. Coaching, managing and mentoring these pipeline development professionals also requires specific skills and appropriate supporting systems. Many vendors – having bought into the need to implement a pipeline development group – end up failing to fully exploit the potential of the function.
Specialist, Skilled BD Outsourcing Options
These are all excellent reasons why so many high-growth organisations are choosing to outsource the pipeline development function to specialist organisations and freeing-up the sales organisations to do what they do best: converting qualified opportunities into successful sales outcomes. B2B organisations especially are delegating the recruitment, management and development of the pipeline development function to external experts.
There are number of benefits to adopting this approach – some obvious and some less so. First, the not-inconsiderable challenge of recruiting and retaining the right people becomes someone else’s professional responsibility, as does the task of managing, mentoring and developing them. Next, it frees up more sales management time to concentrate on addressing the current quarter/year target.
It ensures a more equitable and ultimately more manageable distribution of responsibilities for the quality of the sales pipeline from the top to the bottom of the funnel. And it also ensures that the latest best practices in early-stage pipeline development are being applied. All in all, outsourcing pipeline development has become – for many organisations – simply the most sensible option.