Skip to content

Pipeline Stench

by David Brock on July 16th, 2013
Illegal Dumping

Here’s an idea for some clever software entrepreneur, add “smell” to pipeline management software.  Sometimes, I really wish we could “smell” our pipelines, we would be overwhelmed by the number of dead, stagnant, rotten deals and the resultant stench.  (By the way, I will insist on a royalty from anyone adding this feature to their software.)

It’s amazing the number of sales people and organizations I encounter claiming to have great pipelines.  I look at the pipelines, they are filled with deals.  If the organization has some sort of “coverage” model, for example, 3, 5, or more, they always have the right coverage–there are plenty of opportunities in the pipeline to meet  management’s goals.  But then you start drilling down, you look at age–number of days in a stage, number of days in the pipeline.  I’m certain, I’ve seen deals that go back to the signing of the Magna Carta.  Sales people insist they are good, the customer will start moving forward on the deal any day now.

Too often sales people and managers confuse “full pipelines” with “healthy pipelines.”  While at a glance they may seem the same—they may have the same number of deals, they may have the same aggregate value, but they are dramatically different.  A healthy funnel or pipeline is “fresh”  there is good flow through the pipeline.  Deals don’t get stuck, languish, or rot.  The pipeline is populated with real deals—customers are in our sweet spot, they have a real need to buy–a sense of urgency to do something, we know we have a valued and differentiated solution to what they want to achieve.

When you dive into the deals in a healthy pipeline, we have updated opportunity strategies–based on where the customer is in their buying process and what we have to do next in our sales process.  Dive in deeper and each deal has activities, next steps, things that we and our customers are doing to move things forward and solve a problem.

Rotten pipelines are, well they’re rotten.  They are deceptive, they mislead us.  We may think we are pursuing enough deals to make our numbers.  We may have lots of activities and be keeping busy.  But it misleads us.  If those activities aren’t moving things forward.  If there isn’t flow in the pipeline, but we are having a lot of status meetings, or “how can I help,” or “do you need any more information,” or whatever; things simply aren’t right.  We’re wasting our time.

Full funnels that are unhealthy are worse than anemic funnels.  With full funnels, we may think we’re doing well.  We have a hard time figuring out what we need to do to “fix the problem.”  Are we chasing the right customers?  Do we have a qualification problem, do we have an opportunity management/sales process problem, do we have a skills problem?  We know it’s probably not a competitive problem, because we’d be losing–but we aren’t, nothing’s happening.

How do we solve a performance problem, how do we focus on making our numbers if we can’t identify the issues that are holding us back?

At least with an anemic pipeline, we can start understanding and isolating problems.  An anemic pipeline–that’s accurate, has good deal flow.  We’re focused on the right customers, together, we are taking action and moving things through to closure.  We just don’t have a sufficient number of deals to make our numbers–there are easy solutions to those:  Increase win rate, increase average deal size, and/or spend more time prospecting for high quality deals.  It’s pretty easy to diagnose these pipelines to identify the critical issues, and take corrective action.

Make sure your pipeline doesn’t stink!

Book CoverFor a free peek at Sales Manager Survival Guide, being launched on May 24, click the picture or link.  You’ll get the Table of Contents, Foreword, and 2 free Chapters.  Free Sample

Be Sociable, Share!
8 Comments
  1. Great article, some salient points, in times past I would have to say that I fell into this category, I’m sure most do (whether they like to admit it or not!).

    • Peter: Thanks for the comment, we all slip from time to time, we just have to go back and clean up the pipeline when we do. Better to face reality, we can solve any problem, then to not know the problem we need to solve. Regards, Dave

  2. Great post, Dave!
    Too much time is wasted on poorly qualified deals and comfort pipelines. The sunk cost bias is engraved in human nature and therefore I believe that sales people need systems and professional coaching to ensure momentum in all opportunities and to determine when it’s time to walk away to free up time for new ones.

    At Membrain, we haven’t yet figured out how to make our software smell, but we surely make rotten pipelines very visible 🙂 We feel strongly about the topic which is why we’ve trademarked “Active Pipeline”. We actively force the removal of stale deals from sales forecasts and then remove them from the pipeline. A clear stance from a system’s perspective.

    • George: Thanks for the comment—Membrain is a great solution to help make pipeline issues visible! (Now you just have to look at the olfactory senses 😉

  3. Great insights David. In addition to pruning the rotten fruit, it’s also important to make sure they don’t go bad in the first place. Don’t know about Membrain, but another way to make deal health visible is to use critical chain project management tools like Exepron (http://bit.ly/18t7fHT).

    Basically you take the teams most aggressive estimate for days required to close and add a buffer of 50% on top of that. So if they say 67 days you add 33 for a safe target of 100 days. Then on a regular basis, at least weekly, have the team estimate how many of the 67 days are remaining – including problems that might push it out later. That’s why the buffer is there to protect from uncertainty.

    The real importance of the buffer though is that it gives you a health report and an early warning system. If progress slows, the buffer starts disappearing – when it is 1/3 used up the project turns yellow (start planning). When it is 2/3 used up take immediate action.

    The same approach can be applied to sales forecasts with some modifications.

    • Mike, thanks for the comment. I like your approach to maintaining time integrity within the pipeline. Additionally, we want to make sure we leverage the sales process to makes sure things are accurately reflected in the pipeline. Together these help to build a stronger, higher integrity pipeline.

  4. We all need to take care of our business as we take care of ourselves. Doing regular insights of our pipeline, checking the flow & the quality is a basic task for every salespeople or manager.
    Thanks for the reminder, David

Leave a Reply

Note: XHTML is allowed. Your email address will never be published.

Subscribe to this comment feed via RSS