In my last post, we looked at why sales forecasting is often so inaccurate. We discussed why sales management, not sales reps, should be responsible for pipeline grading and forecasting, and hinted at a uniform pipeline grading system that could make the entire process more efficient.
Now, let’s look at just how to establish that system, which should include stages and milestones. You must also ensure that each milestone has at least one objective deliverable to the prospect in line with their buying cycle.
Keeping in mind the traditional sales funnel, each stage of the buying cycle should be reflected into your sales cycle and not the other way around. Here is an example of a pipeline grading system you can use. It can also be customized to reflect your own industry, market, business engagement model, and specific situation. Call us if you need help with this.
Inactive – The available universe of potential prospects
Active – From your universe, this include prospects that you have pro-actively decided to pursue, that you have engaged in a conversation with, that have expressed an interest to learn more about your offering, and that have shared some reasons why they may be interested in further talking with you.
- Deliverable: Sales Process Control Letter.
Goal Shared – The buyer you are talking with has shared a specific goal to achieve, a need to satisfy, or a problem to address, with a bias toward your offering. In other words, you have helped her create a vision in her mind of HOW your offering can help her address her needs.
- Deliverable: Sales Process Control Letter with 5 specific elements in it. It documents the conversation you had with your prospect and presents capabilities she said could help her achieve her objective.
Champion – Gain access to someone who can introduce you to (or is himself) the key player involved in evaluating your solution and empower him to make the final buying decision.
- Deliverable: Sales Process Control Letter with request to meet with the key players of your choice.
Evaluating Phase 1 – The longest of all these stages, it is the one in which you first meet with each key player individually, then meet with them all in one setting, ensuring that all their goals and issues are in alignment. During this meeting, you identify the correct sequence for evaluating your offering and get their approval to move forward.
- Deliverables: individual Sales Process Control Letters, Sequence of Events to guide their buying decisions, and approval (verbal or written) has been gained to move forward.
Evaluating Phase 2 – When all line items from the Sequence of Events are delivered and acted upon. Things like contractual review of your license agreement, success metrics for the project identified and agreed upon, cost benefit analysis developed and delivered, IT implementation plan agreed upon, etc.
Win the deal – verbal or document signed
No decision – final proposal is delivered and you wait until the cows come home in the winter
Loss – another vendor took the business away from you
You can assign probability-to-close percentages to each of the stages, with the Evaluating Stage representing the only one that can carry a 50% chance to close. Getting a verbal will bring you to 90%, while delivering the proposal and being in a no decision phase will bring you back down to a 10% probability-to-close.
Sound doable? If not, again I encourage you to call us to discuss how a plan like this might work for your company. Next week, we’ll look at what’s next, and summarize what we’ve covered in this series. Before then, what are your thoughts on this pipeline grading system?