Just as you can’t manage what you can’t measure. You can’t measure what you can’t define.
Top performing sales professionals know that “closing the sale” is a result of the activities that precede it. Unfortunately, sales opportunities stall at various sales stages for a variety of reasons both within and beyond our control. Learn how to rigorously manage your opportunities (even the ones that stall) through your sales pipeline.Disciplined inspection of the sales stages of your active opportunities (and a brutal assessment of realistic next steps) will help guard against missing your sales quota. However, before we can address how to assess and manage opportunities, we first need to make sure we are all using a common language to discuss sales opportunities as they move through the various sales stages in the pipeline:
- Suspect: An opportunity that you haven’t called on that may or may not benefit from your product or service. An “unqualified lead”.
- Prospect: An opportunity that you have initially engaged and determined that may benefit from your product or service. A “qualified lead”. You have discussed the value of your services with an individual at the targeted company and want to learn more about your solution. This individual may not be the final decision maker.
- Influencer: A key employee, manager, executive or even outside consultant that is involved with the decision making process. These individuals have a voice in the decision yet does not have signature authority to sign the agreement or contract. The degree of influence that this individual has in the sales process will vary by individual.
- Decision Maker: The executive authorized to sign the Contract, Agreement or Letter of Intent.
- Sales Cycle: The period of time that it takes to move a Prospect to Closed. This span is usually measured in business days or calendar months.
- Active Prospects: Prospects that are engaged in the Sales Cycle to determine if your product or service is an appropriate solution for their business.
- Inactive Prospects: Prospects that have temporarily suspended their engagement in the Sales Cycle with you.
- First Call: The in-person meeting with the individual you contacted. Further discussion leads to the confirmation by the prospect that your product or service solves specific business issues for the prospect’s company. The First Meeting also identifies other individuals (“Influencers”) up to and including the final decision maker that will be involved in the sales process. This meeting should reveal the timeline for a final decision to be made. Also, the First Meeting outlines your sales process, what to expect and the order/timeline in which to expect them.
- Follow-Up: A continuation of the dialogue established in the First Call. Follow-Up meetings are held for a variety of reasons. Often, they are to meet the influencers and final decision maker in person or for additional data-gathering. It is important that you confirm what you learned in the First Call to ensure that you heard them correctly, and they still acknowledge these issues as valid. Follow Up meetings can be requested by either you or the prospect before and after the Proposal Meeting.
- Proposal: The in-person meeting with the Influencers and Decision Maker to present your solution. The Proposal Meeting may take place in 2 parts depending on the complexity of the sale. Part 1 of a Proposal Meeting can be to present the recommended solution and the potential benefits realized by selecting your company. Part 2 can be to present the financial analysis and timeline for implementation.
- Due Diligence: Once the Prospect has heard your proposal, and deemed it worthy of further consideration, they may require you to come back for one or more meetings to address technical details before they make their final decision. It is possible they may want to meet the people who will be delivering the service, or to have their end users ask detailed questions of your team. Some of these meetings may be held before the Proposal meeting, but they most often happen afterwards.
- Verbal Agreement: Confirmation by the Decision Maker that the company has decided to move forward with your proposed solution.
- Closing Meeting: The in-person meeting with the Decision Maker to execute documents and collect the initial funds required to book the sale.
It may help you to remember these terms if you note that we have identified 2 types of potential customers (“Suspects”, “Prospects”), 2 types of statuses (“Active”, “Inactive”), 2 types of individuals (“Influencers”, “Decision Maker”) and then sales stages your prospect goes through as they travel through your pipeline (“First Call”, “Follow-Up”, “Proposal”, “Due Diligence”, “Verbal Agreement”, and Closing”).
Top performing sales professionals direct the Sales Cycle. They don’t “own” or “control” it. Rather, the entire process is one of collaboration – like a dance. The sale professional “leads” while dancing with their prospect.
Sales Stages benefit both the buyer and seller. Sales Stages keep the seller focused on what needs to happen next and serve as bookmarks during the Sales Cycle for Active Prospects. For the buyer, the Sales Stages serve as guideposts along the decision-making route and makes it easier for them to buy. The buyer also knows what to expect as a next step.
At our next Sales Growth meeting, Part II: Managing the Sales Stages will address Pipeline coverage (how many prospects do you need to exceed quota), Pipeline metrics (how to manage the Sales Stages of Active Prospects) and Prospect Communication: what to do when an opportunity stalls at a specific stage to keep your Pipeline clean.
- How do you direct the Sales Cycle with the Active Prospects in your market?
- When do you review the status of each Prospect (Active & Inactive) and how often?
- Review your pipeline in light of these definitions.