“All Sales Problems Are Pipeline Problems….”

“All sales problems are pipeline problems, and all pipeline problems are prospecting problems…….” I was having a conversation with a really smart person. He went on to say, “Ultimately, we can track most issues to how we opened the engagement…”

My immediate reaction was, “Well, yes, but……..”

I think too many managers don’t even look this deeply, but have similar views, the solution to all anemic pipelines is more prospecting. They don’t even look at refining the initial engagement approach in prospecting, they just demand more.

But I’m uncomfortable with this, I wish diagnosing sales performance issues could be that easy. But everything we do in sales is interconnected–so it’s difficult to isolate things to–we just need to prospect more effectively.

Let me unpack the issues–at least my experience:

1. The funnel or pipeline is where we first start seeing systemic sales performance issues. We aren’t producing the results we expect, we see that we have insufficient numbers of opportunities in the pipeline. We generally look at pipeline coverage and sales management mythology is “everything is great if we have 3 times coverage.” And the solution is to fill the pipeline, so we need to do more prospecting.
2. But we need to look more closely, what’s the quality of opportunities in the pipeline? What are the dynamics in the pipeline–win rate, average deal value, sales cycle/velocity?
3. In diagnosing these problems, we can come up with any number of issues. If we are chasing the wrong opportunities, our win rates will be very low. This is a prospecting problem where we aren’t focusing on our ICP.
4. But we could be chasing the right opportunities, and our low win rate is a result of terrible deal execution. For example, I was coaching a sales person who had a 13% win rate. To have a healthy pipeline, she would need close to 8X coverage! She was chasing the right opportunities, she just had bad deal strategies. She let the customer and the competitor drive the process, she would respond. Typically, she won deals not through any sale skill, but through discounting. Fortunately, she just didn’t know how to build strong deal strategies, but she was eager to learn. We were able, in a pretty short period, to get her win rate up to 40%. This meant, she had to have far fewer deals in her pipeline (2.5X coverage).
5. But let’s imagine, rather than improving her deal execution, we had just challenged her to prospect more. First, since she had such a low win rate, she would have been very bad at prospecting. She would not have been able to find an qualify opportunities she should have, she would have done “brand” damage because she was simply so bad at understanding the customer and moving them through their process. In fact, forcing her to prospect before improving her deal execution, would have set her up for failure. Since she needed 8X coverage, and her prospecting would have been poor, the number of people she would have to contact would be overwhelming!
6. Then there’s another way to look at this. What if we change our average deal value? Over the past few years, I’ve worked with an organization making a dramatic shift in their business. They were already good sales people with reasonably good win rates. Their pipelines were OK, usually just enough, and they had good prospecting discipline. But they struggled with the idea, “We could do more, we should be growing more….” We thought, “What if we raised our average deal value? What if we could go from $10K to $100K? How would we do this? We discovered something amazing. They were so busy chasing smaller deals, they were missing many of the large deals that were already there. We had a small team chasing the smaller deals, but the majority of the team started focusing only on larger deals. Deals that had always been there, but they were too busy to find.
7. Then a final example, sometimes finding more opportunities through prospecting just gets us into trouble, we become overwhelmed and manage all the opportunities poorly–which inevitably adversely impacts the win rate. In our own company, a number of years ago, we had very aggressive growth goals. We had win rates in the 82-90% range, we had relatively high deal values. But we were totally booked on our time. We were devoting the time prospecting to maintain our pipeline, but we wanted to double, without hiring more people. We carefully looked at our sales cycles. We re-engineered the process of working with our clients, using design thinking, and were able to reduce our sales cycle by 60%. This freed up the time for us to pursue more opportunities to grow the business.

I’ll stop here. We discover systemic sales problems looking at the pipeline. Prospecting may be a path to improving performance, but it may not be the highest leverage path.

We need to do the whole job as sales people. We need to continue to prospect to identify and qualify new opportunities. Our account and territory plans are the foundation to doing the most effective and impactful prospecting. Our buyer aligned selling process, deal strategy development/execution are the foundation to our ability to maximize our win rates, deal values, and shorten our customers’ buying cycles. Sharply executed sales calls/meetings maximize our ability to create value in every meeting with our customers. It is in these meetings we execute our deal strategies or the prospecting strategies from our account/territory plans. And the pipeline is one of the major tools that help us keep on track or to identify where we might get better.

I wish it were simpler or easier–but it isn’t. And I suspect it’s the challenge of putting all this together and figuring that out is what challenges us as sales professionals–and we thrive on challenges.

We have to do the whole job! When we stop doing each part in balance, then we have performance exposures.

Afterword: The Sales Execution Framework (SEF) is a tool to help you figure this process out and to identify your leverage points. Just ask me for a free copy.