In theory, the sales pipeline appears to be in good shape.
There are many opportunities available. Salespeople are holding conversations. Proposals are being sent out. The forecast meetings indicate potential business amounting to millions of dollars.
But month after month things happen.
Deals come to a halt. Decisions are put off. Prospects thought to be ‘90% certain’ vanish.
The issue may not be the size of your pipeline. The issue could be qualification.
The Problem You May Not Know You Have
The number of opportunities that enter the pipeline is how many B2B companies track sales activity. That makes sense, but it might also be misleading. A prospect does not have to be a qualified buyer.
If the qualification criteria are weak, salespeople will enter the pipeline with companies that have some degree of interest but are missing one or more essential factor such as a serious problem, a sense of urgency, a budget, authority, or a good reason for change.
The result: a pipeline that looks impressive but isn’t economically viable.
What Is The Cost To you?
A weak pipeline not only lowers sales. It also uses up resources. Why are you really losing sales opportunities? What percent are really sales opportunities to begin with? At the same time, there is also the cost of a false sense of confidence.
At the same time, the company is spending time and money producing more sales leads. Often thinking you have millions of dollars of leads. But, what percent of leads turn out to become actual sales.
Why the Usual Solution Doesn’t Work
When revenue falls short, the natural response is: “We need more leads.”
As a result of marketing, spending goes up. Salespeople make more calls. Management insists on having more meetings. The pipeline thus becomes larger.
Yet if the problem is really qualification, you’re just increasing the number of candidates in a system that doesn’t work. That makes it even worse.
Ask a Different Question
Instead of asking: What can we do to place more opportunities into the pipeline?
Ask: Why do qualified customers buy from us, and why do seemingly good prospects decide not to?
This question can lead you to something much more valuable. Look at your most recent 20 to 30 wins, losses, and failed opportunities.
Look for patterns.
- What caused content customers to start looking?
- What caused the situation to be urgent?
- Then who was involved in the decision?
- What other options did they look at?
- What caused some customers to select you?
- What did the others fail to do?
- When did stalled deals start to lose momentum?
This analysis may show that your real issue isn’t sales execution. It might be something more fundamental.
Your ideal customer profile may not be clearly defined.
- It’s possible people without an urgent need are being contacted.
- It’s possible your value proposition isn’t strong enough to give them a reason to switch.
- It’s possible your offering isn’t clearly differentiated.
- Maybe prospects don’t think the economic value is high enough to warrant the risk of switching suppliers.
Create a Qualification Test
Rather than letting every prospect in who is interested in the forecast, set up questions that the opportunity must meet.
For example:
- Problem: Is there a clearly defined business problem?
- Does the problem cost the customer sufficiently to make it worth taking action?
- Is there a good reason for addressing it at this time?
- Can the people involved make the necessary decisions in question?
- Is the customer willing to allocate time, money, and resources to solve the problem?
- Does the customer understand the reason why your solution is meaningfully different?
What should we do next? Has the customer agreed to a particular next step?
A negative response doesn’t always mean that the possibility is given up.
The opportunity may not belong in the active forecast right now.
The Bigger Question
A further reason why qualifications should attract the attention of a CEO.
Qualification isn’t always the real issue. It’s merely the symptom.
Imagine your salespeople are contacting the right companies and the right people about genuine problems, yet the deals still hang on.
Now you have to ask a more uncomfortable question: Is there a good reason to select us?
- You might have found the true limitation if the answer still isn’t clear.
- The company is not experiencing problems with its sales pipeline.
- It has a competitive advantage problem.
Your company might be to customers’ liking. Your salespeople might be well-liked as well. They might even like your product.
But liking isn’t enough.
When customers do not notice any significant difference between your product and other decent alternatives, it becomes easy to put off making a decision. It then makes sense to ask for a discount, and it becomes safer to remain with the current provider. That is why a big pipeline can be misleading.
The aim is not to generate more opportunities.
The aim is to generate more opportunities when the customer has a significant problem, a reason to act, and a strong reason to choose you.
Jim Zitek
I help CEOs identify, validate, and execute high-value strategic opportunities
and create a competitive advantage in 90 days.
