May 22, 2012
Anyone studying the art of negotiations should read the seminal book “Getting to Yes.” Many people who work in sales think that Getting To Yes is the holy grail. Well, you have to kiss a lot of frogs before you get to yes and the faster you weed out the no’s the better you will serve the yeses.
Salespeople tend to look at their pipeline with rose-colored glasses. They listen to their prospects with “happy-ears,” only hearing the positives. Management takes comfort in the size of their pipeline, yet few organizations are ready to face the truth: they suck at qualifying their pipeline.
The problem is that salespeople tend to hold onto bad leads, because getting rid of a bad lead translates into dialing for dollars to replace them with real prospects. This remains the reality, even though qualifying your pipeline and working good leads delivers better results: more predictable revenue, lower cost of sales and higher close rates.
The objective of qualifying your pipeline is to get to no as quickly as possible so:
- You can better predict revenues
- You can spend quality time with qualified prospects, thus improving your chance of getting to yes
- You free up time to work more yeses
Startups need to build a process to ensure their pipeline is qualified. To do this, develop a qualification checklist containing questions that fit the profile of qualified deals. If the answers to the questions do not fit the profile, the prospect is removed from the pipeline. Some examples of qualifications questions:
- Is there budget?
- Is there a project timeline?
- What is the decision process?
- Who is your company’s sponsor?
- Is there an incumbent?
- Who are the competitors?
This is not an exhaustive list. The questions may or may not be relevant for your startup, while the correct answers are company dependent.
The point is that you should have a process. You should have weekly, or bi-weekly, pipeline calls with everyone responsible for driving revenue.
Lastly, ruthlessly weed out the pipeline. Check for movement. For instance, if a deal is stuck at the demonstration stage for too long without moving to the proposal stage … eliminate it. If the proposal was submitted 4 weeks and you still have not gotten an answer, take it out the pipeline. This isn’t to say that the prospective customer should be ignored; instead, put them on the back-burner and do not count on them to produce near-term revenue.
Management should set pipeline goals for all salespeople so that when you eliminate a prospect the sales rep is responsible for replacing them. Weed out the maybes and nurture the likely yeses. Spend quality time with the deals you can win and improve your chances of getting to yes.
Remember: Qualify, qualify, qualify.
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