Evaluation Tools
One often overlooked tool for evaluating performance is
pipeline management (sometimes referred to as funnel management). This
time-tested method can be brought up to date with modern technology, such as the
hardware and software mentioned previously (for example, contact management and
customer relationship management software), or it can be completed on a simple
piece of paper. Its real value is to provide you with three key areas of
knowledge. First, where are the salesperson’s strengths and weaknesses related
to each specific sales competency (prospecting, presentations, proposal writing,
negotiations, etc.)? Second, what will be the revenue at any particular time
period in the future? Finally, what resources will be required to support sales
at any future time period? It’s relatively simple. Consider using it in the
following steps:
Step 1: With your team involved, identify the primary steps necessary to successfully complete a sale.
Don’t become too process oriented and break the steps down into all the decision
and exception points. Simply consider what it takes to drive a sale through to
closure. Some steps you might consider include:
-
Identification of an Opportunity
Stage. Make sure you all agree on what an opportunity might be. Typically,
it must include a real need of a specific customer, a timeframe within which
that need must be filled, and the necessary budgeted funds to acquire a solution
to that need.
-
Identification of Decision Maker(s)
Stage. Of course, you might also want to know the influencers, evaluators,
approvers, and acquirers.
-
First Meeting with Decision Makers
Stage. This is for presenting the viability of your company as a possible
solutions provider.
-
Opportunity to Gather Additional
Information Stage. This might be research, engineering specifications,
historical data, price design, etc.
-
Presentation of Solution Stage. Here
you should consider the proposal or presentation stage in whatever is typical in
your industry and your customer’s marketplace—anything from a written proposal
to a stand-up presentation.
-
Negotiations Stage. This could be a
formal event between your negotiations/contract/legal team and that of the
customer or just the salesperson and the buyer working out the terms and
conditions.
-
Contract Stage. Here your salesperson
is required to actually get a signed contract.
-
Project Management Stage. Postsale
event would require the salesperson to assemble, and perhaps hand the project
off to, an implementation person or persons.
-
Any Other Stage. Consider what it
takes to drive a sale in your business and industry; every business is unique.
Don’t forget any special requirements of your leadership or management team, as
well as such possible departmental or support crossover teams like pricing and
proposal teams.
You will probably have six to eight specific steps that can be
listed within a pipeline chart. Again, don’t get so specific and detail oriented
that the sales professional must spend all his time communicating to you each
small step he has taken on each sale. It could look like the chart in Figure 7-1.
Note the percentages at the bottom of the chart and the gradual
reduction in list space as you move from left to right. First, the percentages
are based on the concept that as you move an opportunity through the sales cycle
and as each stage is completed, you increase your chance of closing a successful
sale. I never show 100 percent because something can always go wrong—even after
signing.
The reducing space is based on the reality that opportunities
‘‘fall out’’ of the list as each stage is completed. Perhaps the customer
changed direction or lost funding. Maybe, after the data-gathering stage, it
turned out that your product or service was not a good match. No matter how good
a salesperson is, and no matter how good your products or services are, it’s
unlikely that you will close every opportunity.
Step 2: Now that you have an agreed upon a
pipeline chart, you can begin to manage from it by asking your team members to
provide a monthly list of opportunities on which they are currently working.
Don’t worry about every little nickel and dime sale. Just ask them to list the
bigger opportunities over a particular dollar threshold. They should give you
the following information:
-
Name of customer
-
Product, service, or application
-
Anticipated dollar value of sale when closed
-
Current sales stage
-
Expected sales stage in next thirty days
-
Any unique challenges or obstacles that could impact the
successful closure of the sale
Now your chart might look like Figure 7-2.
Step 3: Take a look at your combined pipelines
for all your team members. Notice anything? Perhaps you discovered that your
team’s total sales results for any specific month in the near future look
dismal. Maybe you see a specific month coming up in which your resources that
support sale closure and implementation of offering will be overburdened. For
example, will you have enough proposal writers or contract negotiators? These
charts, when combined, will help you plan for the future more effectively and
will communicate prospects to your leadership with a greater sense of
confidence.
Step 4: One of the most valuable side
effects of a pipeline chart is its ability to evaluate any salesperson’s
weaknesses by identifying where the pipeline becomes congested and where most of
the opportunities are lost. For example, if most ‘‘fall out’’ at the proposal
stage, than this is probably a signal to review the salesperson’s writing skills
or financial analysis competency. Maybe a little training would improve the
ability to advance more opportunities to closure. Or, the problem may be
positioning with new decision makers, contract negotiations, or any of the other
key steps to sale closure.
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