Are you over-egging your pipeline?
The most profound challenge in running an agency is to balance the work to be done with the resource to deliver it. To a high standard. On a consistent basis.
Most agencies either have too much work and not enough resource OR not enough work and too many bums on seats. Very rarely are the two perfectly in sync.
This of course impacts the business in all manner of ways, most notably recruitment.
A sales pipeline report is an essential tool for hiring decisions. For example, a strong pipeline may require the agency to recruit in anticipation of more work landing. A weak pipeline, on the other hand, might mean the agency needs to start planning for redundancies.
But, in my experience, most pipeline reports fail in this respect for two reasons:
1) There are too many dead ‘opportunities’ that should have been removed from the report a long time ago. They remain due to wishful thinking, rather than any realistic chance of closing.
2) A subjective weighting methodology that means the % chance of closing each opportunity is inaccurate.
The cumulative effect is an inflated pipeline value, making the report a potential hazard for anybody using it to make important decisions.
So, let’s address each of these points:
Let it go, let it goooo…
It’s a strange market at the moment, full of conflicting messages and narratives (are we in recession, not in recession, heading for one…who knows?).
The one constant I hear from agencies is that decisions are stalling; prospects are keen as mustard one minute, quiet as a mouse the next. If you’re also experiencing fewer leads entering the top of the funnel, there is a natural tendency to hold on to the opportunities you do have. Who wants to show up to the next board meeting with a near-empty pipeline, right?
However, as difficult as that meeting will be, you’re far better presenting a realistic picture of the current situation. To facilitate effective decision-making (and for your own sanity), you need to cut loose those opportunities that – in your heart of hearts – you know are not going to move forward any time soon.
If you’ve heard nothing from a prospect for a few weeks but still need a definitive ‘no’ before you can move on, at least put the opportunity ‘on hold’. By all means, find value-add ways to stay in touch.
But in the meantime, remove it from the pipeline report.
Subjectivity killed the cat
I tend to find most agencies align their weighting with a stage in their CRM. For example, ‘Stage 1 – Qualifying’ = 20%. As an opportunity moves through each stage, the % score increases.
Makes sense, right?
Maybe not.
Just because a prospect is at the proposal stage, for example, it doesn’t necessarily mean the opportunity has been properly qualified. When a proposal is flung together and fired out by email after a 20-minute phone call, qualification will be dubious at best.
But the CRM – arbitrarily – says it has a 70% chance of closing.
Realistically, it’s closer to 10%.
I’ve tested this hypothesis on dozens of clients over the years by objectively reviewing opportunities in their pipeline against a set of YES / NO questions, for example:
- Have you agreed on a set of desired outcomes and therefore how success will be measured?
- Has the prospect confirmed they are able to invest at a level relative to those desired outcomes? (As an aside, nothing should go into your pipeline report until you have a confirmed budget).
- Do you know all the alternatives under consideration e.g., other agencies, including incumbents?
- Have you got agreement on timescales for starting?
- Have you got consensus amongst ALL stakeholders, responding directly to their questions, concerns or objections?
And so on…
A checklist or set of questions like this is an attempt to make the exercise of weighting opportunities as objective as possible. It ensures the same level of robustness is applied whatever the situation and irrespective of the sales stage.
This is not to say that stages don’t matter. They do. But the nature of selling is messy. We’d all love opportunities to move smoothly through each stage of our process. But rarely does this happen; they move at different speeds, stall, and some go backwards before moving forward again.
This is particularly true in the current climate.
And that means % weighting based solely on stages in a CRM is at greater risk of being inaccurate.
Back to that board meeting…
Have you ever noticed how everyone seems to have an opinion on sales? Even when they have no first-hand experience in selling.
Annoying, isn’t it?
If you look after business development in your agency, you’re going to be challenged to justify yourself time and time again. It’s the nature of the beast.
So any ambiguities, unknowns or question marks are going to be latched on to.
In my agency days, if I could explain to the board why an opportunity hadn’t moved forward – and that reason was outside of my control – it was accepted (despite the obvious frustration).
However, if I’d lost an opportunity due to something I should have foreseen or a question I should have asked, I was quite rightly called up on it.
This is where an objective approach to managing sales opportunities is your friend. It allows you to make the distinction between what is in your control vs what isn’t. The questions you ask, the information you gather and whether you decide to move forward or pause – these are all under your control.
A key contact leaving abruptly, a company going under or an FD slashing the marketing budget – these are outside of your control (although in some instances, such events might in themselves create new opportunities).
In the words of Viktor Frankl, “control the controllables”.
But you can only do this if you remove assumptions, guesswork or wishful thinking from your sales process.