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“We’ll never make our number unless we increase our activity!”

OK, I get that, but is activity the real key performance indicator driving your sales teams to success? Let’s break it down. Here is the basic equation you should use to measure your pipeline effectiveness:

Number of Qualified Opportunities X Value of Opportunities X Win Percentage

Length of Sales Cycle

Perhaps this equation is new to you, but the components driving pipelines have been constant over time. So, here’s the math question:

  • What if you increase each of the top line components by 10% and decrease the bottom line by 10%?

The Answer:

  • You increase your sales velocity by 48%!

So on which of these four components should you direct your efforts?

  1. Increasing the # of opportunities?

  2. Increasing the $ value of opportunities?

  3. Increasing the % win ratio?

  4. Decreasing the length of the sales cycle?

Research shows most people concentrate the most effort on #1. OK, but if the goal is to fill the pipeline with new opportunities… you will be left with much less time to work on the other three. Where do you spend your limited amount of time? The fact is that your highest rate of return is to concentrate on exactly those other three. Which is most important? While all four areas are important there is one that is the MOST IMPORTANT… WIN RATIO.

Pointing back to the initial KPI; activity, increasing the number of opportunities, with no regard for the other components is the highest area of pipeline defect and takes the most amount of time.

A close second, equating to, perhaps, even higher defect is pipeline hope, extending the life of the deal for no valid business reason. Consider the words of David Brock, Sales Blogger:

“We’ve become “attached” to the deal. We won’t let it go—partly because at one point the customer expressed interest—they seem qualified—but now they’re not. We don’t let go—we believe by sheer force of personality and persistence, we can recover the sense of urgency and move forward. We don’t let go–if we do, we don’t have enough in our pipeline to work on.”

Do these challenges sound familiar?

At Butler Street, we take pipeline effectiveness back to the basics of Sales Effectiveness.

  • Are you properly qualifying the opportunity?

  • Do you understand what it means to be in the customer’s operating reality?

  • Are you an active listener?

  • Can you effectively ask the right questions?

  • Are you able to anticipate and handle objections?

  • Can you effectively plan your client interactions?

Want to improve your WIN RATIO?

Click on CONTACT and let’s talk about how we can help you win more opportunities.

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