Hardwood Floors August/September 2019

SALES SAVVY BUSINESS BEST PRACTICES

HOW TO MANAGE A SALES PIPELINE

Good economic times sometimes mask bad sales behavior. Even during boom times, pipeline management is critical. Here are a few pipeline management

LABEL YOUR OPPORTUNITIES You can break down any opportunity into these three categories:

• A red-hot opportunity (RHO) is a high-probability opportunity that is more “when” than “if.” You are 90 to 100 percent sure it will happen short-term. • A viable opportunity (VO) is a moderate-possibility opportunity that is more “if ” than “when.” You are 50 to 90 percent sure this will happen in the intermediate future. • A potential opportunity (PO) is neither “when” nor “if.” It is “maybe.” You are less than 50 percent sure it will happen long-term. Once you define your opportunities, remember to apply the 1:2:4 ratio. For eachRHO in your pipeline, you need twoVOs and four POs tomaintain a steady flowof business. Another way to frame this is that for every short-termopportunity, you need two intermediate opportunities and four long-termopportunities. For example, let’s say yourmonthly quota is $100,000. By applying the 1:2:4 ratio, you’ll need tomaintain $400,000 inPOs and $200,000 inVOs to attain the $100,000 quota. Achieving this will add balance and stability to your performance. REVIEWYOUR OPPORTUNITIES REGULARLY Always be aware of where your opportunities are in your pipeline. On a weekly basis, analyze your sales pipeline. Reviewyour RHOs and determinewhat needs to happen to close the deal. Reviewyour VOs and determinewhat needs to happen to heat up those opportunities. Analyze your POs and determine a strategy to turn them intomore viable opportunities. Every time you win (or lose) a sale, it’s no longer in your pipeline. Celebrate your successes and learn from your failures. And then find more opportunities to backfill the opportunity, won or lost. Likewise, every time a potential opportunity becomes a viable opportunity, you’ll need to find another potential opportunity.

challenges facing salespeople: UNDERPRESSURED PIPES

Even in great economic times, some salespeople struggle to find enough viable sales opportunities.The salesperson can have a tough competitor in his or her market.The salesperson could be brand new. Some salespeople can also rely too heavily on the big deals that fall through. Whatever the reason, these salespeople don’t have enough opportunities to fill their pipeline.This lack of opportunity leads to frustration and even self-doubt. OVERPRESSURED PIPES Pipes can only contain a certain amount of material; a sales pipeline can only sustain a certain amount of opportunities. To focus everywhere is to focus nowhere. An abundance of opportunity creates an absence of focus. Salespeople miss details and must spread their attention. During these peak economic times, opportunities can be taken for granted. Each opportunity becomes increasingly replaceable. Salespeople tell themselves, “It’s all right that I lost that opportunity. There will be another one.” CLOGGED PIPES When pipes clog, nothing gets through. The same is true for sales pipelines. Too often salespeople fill their pipelines with massive opportunities that take too long to close. These massive opportunities obstruct the progress of other opportunities. Managing a pipeline is about achieving balance among various opportunities. Whether you have underpressured, overpressured, or clogged pipes, the result is the same – poor performance. Identifying the issue is the first step.The next step is to fix it. Here are a few tips to help youmore effectively manage your sales pipeline.

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