This blog was first published at: http://www.startit.be/blog/detail/6-steps-to-build-a-quality-pipeline-part-2 This blog will give you a pragmatic approach on how, where and when do you put a deal in each stage of your pipeline. Anybody within the company should be able to look at the pipeline and know in which stage each deal is. Your goal is to create a common ground where you can draw conclusions and predictions based on correct sales data. Missed part 1? Read it here. If not: continue reading...
Once the quote has been send, you need to get feedback if this fits their expectations. This is the part where the big discussion around price and conditions will happen. Start sharpening your negotiation skills as pressure from procurement will build up. There are many strategies and tricks to get through these discussions. For these please join one of my next Advanced Negotiation Skills trainings.
The key is to make sure it is always a win-win deal. Don’t just give in because they ask for it or because you are a starter. You have a lot of value otherwise you would not have been to this stage. And you know this value because you figured it out during the presentation stage.
Negotiation means you got the verbal confirmation from the customer but you do not have the PO yet. I introduce this stage for 2 reasons:
- It still happens that deals stop here and you never get the PO (last minute budget changes…)
- Timing, you might know the deal is approved but it will take 4 weeks for procurement to send you to PO
So no party yet.
You have the signed PO in your inbox. Now you can PARTY!!
There are 2 other categories that are important to keep track of when they happen: Lost & Fridge
Rather self-explanatory: a verbal or written confirmation that you have lost the deal. Either somebody else won or they have cancelled the project. Always try to get feedback on why. It is normal to ask for this feedback and don’t be afraid to ask details. Losing is an important lesson to make changes to your attitude, offering & product. It is important to track in which stage you have lost the deal as that teaches you what to change.
If you lose your deals at the qualification stage, it could mean your value pitch is not the right one. Or you might be talking to the wrong segment of the market. If you would lose many deals at the proposal stage, it would imply your pricing is not right. Keep track from the start where things go wrong so you can correct it immediately for.
Many deals get stuck in a stage and go nowhere. Classics examples are:
- No reaction from the customer
- Endlessly moving of meeting dates
- Discussion on pricing keeps going back and forth
- Never ending meetings with always new people
Only 10% of these deals ever come through. This category of deals are the ones that will skew your forecast statistics completely. The most obvious one that will defocus you is the large enterprise deal. The promise of big cash that will never materialise. This type of pipeline looks good at first glance but in fact they are empty ‘feel good’ statistics. Again as with lost keep track in what stage they occur. Make sure you add your fridge deal contacts to your drip marketing approach. Include these contacts in newsletters & other social media communication. These companies had the intention to buy but probably never got the budget approval to buy.
Another reason is that they are not early adopters and need to be convinced by more references. Keep updating them with news on closed deals and keep fuelling them with ideas. Give them a view on what opportunity they missed. What also works well is to drop a name of their competitor that is using your products. Nobody wants to be 2nd in a competitive market place.
Special note on dealing with TENDERS:
In search of the best price, enterprises will create a tender. Another name is a request for proposal. Most companies and governments have budget limits for a certain project. Once you go above this budget they will engage procurement to write a tender. This way they can compare pricing, skill and services of different vendors. During the qualification stage don’t forget to ask at what the tender limits are. Tenders will delay your sales cycle massively.
If you have not influenced or written the tender yourself: WALK AWAY.
(The rule of Humblet)
Sometimes you will have received one while you had no clue it was out there. Probably your competition has given your name to procurement as you pose no threat to them. Or procurement just needs an extra price.
There are still a few reasons why you could answer:
- You want to get on the radar of the company for another potential project
- You want the experience to get your internal processes right. Covering the classic questions for the future (company structure, legal T&C’s, reference lists,)
- You want to learn your competitive landscape
- Slash and burn strategy! You want to kill the profitability of your competitor by dumping the price. I let you decide on the ethics of this one but I it will hurt your own credibility in the long term.
Ready to accelerate your pipeline?
Any pipeline method needs to be tuned to your business. The fundament is that you agree on the definition and handovers of the stages. You can change all the naming but keep stages. A lot of companies don’t like validation and want to name that phase negotiation. Some don’t need the 90% phase as there is no waiting on the PO. This system needs to live as it is core to your pipeline predictions.
In my next blog, we will discuss ‘the art of forecasting’ based on this system. How can you build good quality and reliable predictions and what are the KPI’s you need to look into?