By John Holland, Chief Content Officer, CustomerCentric Selling®
Anyone willing to have compensation dependent upon delivering top-line revenue better be able to withstand pressure. Not conveying that pressure to buyers can be difficult.
Most vendors apply pressure at the end rather than the beginning of the sales pipeline. Sellers have wide latitude in entering new opportunities into their sales funnels and are expected to enter a steady stream of new opportunities every month. Sales managers get a sense for the quantity of new activities, usually with little concern about quality. Their focus is further downstream on what they hope are closable opportunities to make the forecast.
According to CSO Insights, over 90% of opportunities fail to close as forecast (they don’t close or close for different amounts or different dates). That statistic points out a need for managers to spend more time as deals enter the pipeline. New entries should meet defined minimum qualification standards and progress should be quantifiable as sales cycles move ahead. Consider the implication on cost of sales if quality control at the beginning of the pipeline were enforced.
Expecting sellers to close unqualified transactions in a given month is a recipe for disaster. In pipeline management and forecasting, bad news early is good news. When was the last time you heard a sales manager refuse to allow a new opportunity into the funnel because it didn’t meet muster? The CSO statistic will continue to be an issue for companies that fail to scrub pipelines early and on an ongoing basis.