Bigger Sales Pipelines - The Dangerous Truth

Posted by Dave Kurlan on Mon, Apr 18, 2016 @ 16:04 PM

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I usually get notified when new sales studies are published and I'm asked to link to those reports from my Blog.

Last week I was invited to download the 2016 InsideSales.com Business Growth Index Report.  I read through it today and while I wasn't terribly surprised by anything, there were a few findings that are quite interesting, showing that some companies aren't making very good decisions, and these decisions could be representative of your company too.

The report showed that overall, pipelines are larger and that would generally be viewed as a positive. But it was no surprise that sales cycles are longer and win rates are lower.  The quality of leads was responsible for all three -  the larger pipelines, longer sales cycles and lower win rates.  In other words, companies were either raising the bar - they wanted better leads - or lowering the bar - they wanted more leads.  

It appears that in the case of better leads, better was defined as bigger companies with bigger opportunities, which increases the total value of the pipeline. Greater competition, a longer sales cycle and lower win rate are the obvious outcomes of that strategy.  

In the case of more leads, the number of opportunities in the pipeline increases.  Of course, more is the opposite of better and longer sales cycles and lower win rates are an obvious outcome of that strategy too.

My question is, do more opportunities, despite the lower win rates and longer sales cycle, translate to better revenue growth?  

The reality is that pipelines should not simply get bigger!  If we know the annual revenue goal, closing percentage and average deal size for every salesperson, then we know exactly how many opportunities must be in each stage of the pipeline at any moment in time.  When we know that, it's all about effective targeting and scoring.  Last week I spent a half day helping a company nail their scoring mechanism.  If you get that right, you'll know not only whether an opportunity qualifies to be in the pipeline, but whether it should be pursued, assigned resources, and quoted.  When companies choose to simply put more in, it's usually because they already have too many of the wrong opportunities in the pipeline.

There were some findings around technology usage.  It showed that in 20% of the cases, the competitive edge could be attributed to technology with the biggest three examples being CRM, Sales Intelligence and Sales Presentation tools.  But even with CRM showing the most widespread usage, only 45% attributed their competitive edge to CRM.

Speaking of CRM, it seems that the data for this analysis came from CRM, so I assume they were mining Salesforce.com data from multiple companies and industries.  With so many executives complaining that their salespeople hate using Salesforce.com, and with sales managers having to hound their salespeople to keep the data current, it raises questions about the accuracy of the length of the sales cycle.  Many salespeople delay entering data until an opportunity is well underway, while others delay entering their follow-up and follow-through, including when they have closed the sale!  These issues cause sales cycles to be represented as both artificially short and long!  We could give them the benefit of the doubt and suggest that it evens out...

The authors grouped findings by company size -  smaller than and larger than $1 billion; but only 11% of the respondents were from the larger companies.  Another thing that might have skewed their findings is that 60% of the respondents were from software and business services companies.  While those industries are certainly hot right now, the lack of balance hides what might really be taking place.  If pipelines are bigger, sales cycles longer and win rates lower, what do you suppose those three metrics look like in the not-so-hot industries?

Well it's not what you might think!  Win rates went down in both tech and non-tech, but they dropped by 100% more in the tech segment.  Wow!  See, that's how some would report this finding - by dramatizing it - when the reality is that win rates dropped by 2.1% in non-tech and 4.7% in tech.  Also surprising is that the increase in the number of new opportunities was 10.8% in tech but 18.3% in non-tech.  To my thinking, it's the rest of the world catching up with the tech and finally getting with the program!

All of these findings are nice to know, but in your company, it comes down to two things.  Let's assume that your deals are not lost because of quality; and your deals are not won because of price.  After all, there can be only one lowest price and one best quality.  That means everyone else has to sell value.  In value selling, differentiation takes place in the field (or on the phone) and that means your ability to differentiate is reliant on:

  • Consistent and effective consultative approach,
  • Effective milestone-centric, customer-focused sales process, and
  • Consistent and effective coaching from sales managers - on their deals and personal growth.

 In my experience, this is generally not what is taking place in most companies.

You can improve the sales process and sales coaching by attending my annual Sales Leadership Intensive - May 17 and 18.  It's two days of the absolute best training on how to effectively coach salespeople and much, much more.  Use this link with embedded discount code to save 30%! [Update - Sold Out]

You can find out if your salespeople are truly selling value and to what degree they are using a consultative approach with a sales force evaluation.  For most companies, the information learned and action steps identified make this a no-brainer.

And you can simply hire better salespeople, but using the most accurate and predictive sales candidate assessment there is.

Topics: Dave Kurlan, salesforce.com, long sales cycle, sales win rates, building the sales pipeline, insidesales.com

It's Coming Sooner Than You Think - 5 Keys to Prepare Your Sales Force for the Recession

Posted by Dave Kurlan on Thu, Mar 10, 2016 @ 06:03 AM

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You remember the last recession - the great recession - right?  I remember that in November of 2008, the business stopped coming in as if someone had turned off the faucet.  Bam!  We lost a third of our revenue overnight - and we were prepared for it!  I predicted the last recession as early as September of 2006 with this article and in the summer of 2008 with this article.

In my business, I can see two trends ahead of others and I began seeing both of those factors begin to kick in last month.  Do you know what  they are?

The first is sales candidates.  For about two years, there has been a very significant shortage of great candidates.  But that began to change last month, when in the areas where it has been most difficult to find good sales candidates and sales management candidates, we are now beginning to see more of them express their interest.  Why?  Things are not looking all that rosy where they are working and they are out ahead of the curve looking to make a change.

The second is spending freezes.  We are starting to see the larger companies put all unnecessary spending on hold - they are hoarding cash again - and when that happens, the economy stops growing, begins to shrink and bam - we are in a recession.

I sure hope I'm wrong, but the signs tell me I'm right.  So what does this mean for you?  These are the top 5 things you must do right now:

  1. You had better sell your ass off while you can because we just might have another 2-3 year dry spell.  It's not a coincidence that by the time the 2008 election took place, we were deep into it.  And what's coming up at the end of 2016?  Right.  And with the way the election is shaping up, our choices might not be the ones that we had envisioned.  If things continue the way they are heading, the choice will be the guy who is bad for business or the guy who is bad at being presidential.  (Just an observation, not a political stance!)
  2. You must be better at differentiating, selling consultatively, selling value, qualifying and closing than ever before.  On the line are the opportunities sitting in your pipeline today.  If you fail to get them closed because you skipped a step or two, or you accepted a put-off, you might not get that business closed until 2019!
  3. Prospect like never before.  Get every possible new opportunity into your pipeline while prospects are still willing to meet with you, talk with you and share with you.  Then see #2.  The window won't be open for very long.
  4. Salespeople who do OK when things are good, tend not to do so well when things take a turn for the worse.  If you have any salespeople that suck when it comes to getting people to spend money when they don't want to, then now is the time to get them trained.  Do not put this off.  Training for reasons like these is not  a nice to have, it can mean the difference between killing it in a recession and being killed.
  5. Coaching!!  Sales leaders must become masters at coaching - now - because the one thing that can make a difference is constant, effective, non-stop, coaching.  Impact every opportunity.  Grow every salesperson.  The timing is perfect as my top-rated annual Sales Leadership Intensive is coming up in May.  Attend this comprehensive two-day coaching extravaganza and you should be able to coach your salespeople through a recession.

Get ready because here it comes!

Topics: sales pipeline, Closing Sales, sales effectiveness, long sales cycle, sales win rates, recession of 2016

How Dramatically Has Selling Changed?

Posted by Dave Kurlan on Thu, Feb 19, 2015 @ 06:02 AM

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Image Copyright: 123RF Stock Photo

Yesterday, I was listening to a radio promotion when they said, "Take a selfie with a standie and then, using your smartphone or tablet, upload it to Facebook, or tweet your image using hashtag [something I can't remember]."

Now, pretend it's 1995, and reread the quotation.  Twenty years ago, would you have recognized any of the words other than "take", "and", "then", "using", "your", "or" and "to?"  In 1995, selfie, standie, smartphone, tablet, tweet, hashtag, upload, and Facebook would have had you believing that you were listening to a foreign language.  That's just one example of how dramatically some things have changed in the past 20 years.

Let's take selling.  How dramatically has that changed in 20 years?

There are some obvious changes that most people in sales will recognize, like:

  • Salespeople are no longer sources of product knowledge or pricing, both of which are readily available online.
  • Salespeople enter the sales cycle only to find their prospects much further along in their buying cycle.
  • Salespeople utilize Twitter, LinkedIn, Google, email marketing, blogging, and the web for knowledge and to connect with prospects, before they speak for the first time.
  • Personal online networks, like Facebook, Google+, and LInkedIn are exponentially larger than the physical networks of twenty years ago.
  • Salespeople with transactional products and services, like tickets, travel, commodities and most retail items have found themselves being replaced by online sales.
  • Many salespeople who once worked in a territory or vertical, now find themselves doing the exact same thing by phone.
  • Video conferences and phone calls are replacing face-to-face visits.
  • Inbound, Lead-Gen, and Appointment Setting Teams are recent additions to Inside Sales.
  • Value Propositions and Added Value have given way to salespeople who must now be the value.
  • A vast array of productivity tools, especially those that sync between devices, make selling not only more efficient, but more fun.
  • National and global competitors are making it more difficult to win the business.
  • Demos can be easily conducted online.
  • There are vast amounts of free, online resources that individuals can use to improve themselves.

And then there are the changes which are not as obvious, like:

So my question is, are these changes good or bad?  Have you made any or all of these changes?  If you have ignored any of the changes, was it due to ignorance, discomfort, or arrogance?

What is the next change that will rock your world?

Topics: Dave Kurlan, Consultative Selling, close more sales, twitter, linkedin, selling value, long sales cycle, sales win rates, google plus

Achieve More Accurate Forecasts and Sales Results Today

Posted by Dave Kurlan on Wed, Nov 12, 2014 @ 06:11 AM

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Are you old enough so that if you don't write something on your to-do list you won't remember to do it?  That's me.  I don't feel old, I don't look that old, but I'll be 60 next year and have become a slave to Wunderlist.  On Monday, I forgot to push the correct notification button and only some subscribers were notified of Monday's article.  That article was perhaps the most important article I have written in all of 2014 and it introduced my latest White Paper - The Modern Science of Sales Force Excellence.  This White Paper has ground-breaking insights and has already been nominated for Top eBook of 2014!  The Monday article clearly shows the differences between companies with shorter sales cycles, higher win rates and greater increases in sales.

Last week, a new client was explaining how he called several of the nearly 300 opportunities that one salesperson had in his pipeline.  My client identified 7 opportunities that had no recent activity, but had been in the pipeline for several months and were supposed to close.  Imagine my client's surprise when:

  • My new client had no difficulty reaching the decision makers,
  • The prospects were happy to speak with my new client,
  • My new client learned that two prospects had gone with an inferior competitor - months ago, and
  • My new client learned that the others had not even heard of his company.

How can this happen?

Did you read Monday's article?  There was one significant difference not included in that article.  In 96% of the companies where new salespeople were outperforming those hired previously using other methods, those companies had integrated their sales process into their CRM or pipeline management application.  Would that have helped here?  That depends on which application was being used.

We use Membrain at both of my companies and we recommend Membrain to all of our clients.  There are many reasons as to why we believe that Membrain is an ideal Pipeline Management tool.  Here are a few that would have helped our client if his company had been using Membrain.

Membrain would have notified him that:

  • These 7 opportunities were stuck when they were in that stage just one day longer than specified,
  • The opportunities had exceeded the ideal time for their sales cycle,
  • There were incomplete next steps, and
  • These opportunities were no longer included in the forecast.

The application would have proactively notified my new client.

One of the biggest and most chronic complaints we hear from clients is that they either can't get their salespeople to use the company's CRM application, or they don't update their CRM in real time, updating it only when asked to do so.  Does that sound familiar?  Companies with that problem - and that's most companies - rarely see an accurate forecast, rarely know the progress their salespeople have made on opportunities, and rarely have the data necessary for their dashboards to display accurate information.

The thing we like best about Membrain is that salespeople like Membrain - a lot!  It's simple to use, has no complicated navigation, requires almost zero data entry and always shows salespeople their pipeline on login by default.  It's opportunity-centric instead of data-centric.

Most of all, it doesn't require an integrator to customize it - to get your sales process built-in and hooked up to the pipeline, dashboard and forecast.  Everyone on my team is able to easily work with the Membrain application and customize it for clients.  It doesn't take long, and the end result is an awesome, robust sales process/opportunity focused application and clients fall in love.

I have always preached that salespeople should live in their CRM.  Membrain makes this possible.

In my 2005 book, Baseline Selling (kindle edition is ranked #53), I introduced the concept of a Visual Pipeline.  Membrain brought this to life.

You can check out Membrain here and take advantage of the special pricing they are offering my readers!  It's ready to rock right out of the gate.

Topics: Baseline Selling, sales pipeline, sales win rates

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About Dave

Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog has earned medals for the Top Sales & Marketing Blog award for eight consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave.

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