#39: Sales pipeline

Over the past few articles we have been looking at the key components of your sales process, from identifying what a Salesperson actually does, the difference between the features and benefits of your product and why it is important to know these during meetings, and your USP.

Another thing you also need to manage your sales pipeline. Take a look at the two tables below:

Pipeline

Source: Viridian Corporate Finance Limited

Name

Stage Contract Size (est.)

Value

A

1

100

0

B

2

200

20

C

3

50

10

D

4

150

50

E

5

250

125

F

6

100

75

G

7

100

100

H

1

50

0

I

3

250

50

J

4

100

33

K

5

150

75

L

2

200

20

M

2

50

5

N

4

50

16

 

1800

579

Assumptions
1.        Prospect = 0%
2.        Contact established = 10%
3.        Positive meeting = 20%
4.        Tender submitted = 30%
5.        Negotiations/discussions = 50%
6.        Verbal o.k. or email = 75%
7.        Purchase order/contract = 100%

 

The first one is very useful in anticipating your future cash flow. The first column is the prospect. The second column is the stage the relationship has reached. The third column is the estimated absolute size of the contract. The fourth column is the discounted “value” of the contract, with the estimated size multiplied by the percentage likelihood that the business is won.

By way of example, prospect I is at stage three, so there is a 20% likelihood that you win the business. The business is estimated to be worth £250, so the discounted value is £50.

Pipeline

Source: Viridian Corporate Finance Limited

Prospect

Contact Established Positive Meeting Tender Submitted Negotiations/ Discussions Verbal OK      or email Purchase order/ contract

A

A1 A2 A3 A4 A5

A6

B

B1 B2 B3 B4 B5

B6

C

C1 C2 C3 C4

C5

D

D1 D2 D3 D4

D5

E

E1 E2 E3

E4

F

F1 F2 F3

F4

G

G1 G2

G3

H

H1 H2

H3

I

I1

I2

J

J1

J2

K

K1

L

L1

M

M1

N

N1

O

O1

P

Q

R

S

T

U

V

W

X

Y

Z

 

Another way of looking at your pipeline is the second table. It’s the same sort of data re-sorted. It shows you how many names you have at each stage in the sales process, so it’s useful to estimate what volume of business is coming towards you from a resourcing standpoint.

If overnight everything moved from column five to column six you might think “how I am going to deal with this?” as they have all said yes at the same time.

You can also pick up on things that are stalling; if something has been in column five for ages you might ask yourself why, and investigate.

The key is how many names can you add to the first column, and how fast can you move them to the far-right column.

Try putting a table like this together and start sorting through your contacts, you might be surprised how far you have come with some of them. It will also weed out the time wasters and free up your time for people that actually want to work with you.

Remember, you can always get in touch with me for more help on this or anything else in my expert articles.

Posted in: Start-ups

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