What’s The Shape Of Your Pipeline?
Jeff Hoffman wrote an article where he talks about the shape of your pipeline. Individual salespeople generally have a good handle on their pipeline. But management does not, Management needs to keep watching the shape of the sales funnel as a metric in order to get a better understanding of the pipeline and the status of the people in that pipeline,
What is the shape of your pipeline?
Do you use the traditional funnel, broad at the top and then gets continuously more narrow as it gets closer to closing? Let’s say there is a statistical relationship of 3x the number of leads to closes. Therefore, salespeople need to get 3x the number of leads to closes if they are going to meet their quota.
However, a better-looking funnel is shaped like a champaign glass, which is wide at the top and narrows quickly down the stem to the base. Thie idea, of course, is to qualify prospects quickly so you can get rid of poor-prospects and have more time to work on real prospects. Naturally, this requires a well-designed qualifying system, But, it would be well worth the time an effort it takes to get that qualifying system. Then multiply that by the amount of quality sales time gained,
The real prospects are in the stem of the champagne glass. These prospects have a 1.25 statistical probability of closing. Therefore, in the lower stem, you need 1.25 real pre-close prospects to meet a closing sale. And, much more time for the salesman to work on these potential prospects to meet his quota.
Make an illustration of your pipeline because it’s an easy way to see where you are, and then keep track of the numbers (leads vs. closes) over time so you can plan your sales forecast more accurately and with less consternation.
If you know someone who needs to change the shape of their funnel, forward this post to them. Maybe it will help.