This Tip Sheet from Colleen Francis is taken from an interview of her by Josh Zywien on avoiding falling into the sales pit and those mis-steps that cause pipeline trouble for your team.
Sales expert and entrepreneur Colleen Francis hates to be a Debbie Downer, but she has a warning for expansion-stage companies whose sales organizations killed it last quarter: Next quarter might suck. In fact, if you’re not careful, it could be a total failure.
The reason is simple, Francis explains. While your company’s sales team was spending all of its time over the last few weeks or months closing every deal in its pipeline, it probably wasn’t spending enough time prospecting. In fact, once your company is finished celebrating its big quarter, you might just wake up to a champagne hangover and a troubling realization: that once overflowing reservoir of leads you had is now a pipeline drier than Death Valley.
It’s a quagmire Francis has seen companies with inexperienced sales teams fall into with surprising frequency. She labels it “the sales pit.”
Francis, a seasoned sales pro and the founder and CEO of Engage Selling Solutions, sat down with OpenView to discuss the common mistakes that cause companies to fall into the sales pit in the first place, and reveal what expansion-stage businesses can do to avoid it in the first place.
What is the primary reason that companies — especially expansion-stage companies — unknowingly fall into the sales pit?
It has a lot to do with complacency, consistency, and a general dislike for prospecting. Let’s face it, most salespeople don’t enjoy cold calling, asking for referrals, or qualifying opportunities — the grunt work of sales. So when orders and sales start flowing in as a result of good prospecting, a salesperson’s tendency is to think that the fire hose has finally been turned on and he or she will never have to do the boring drudgery of sales prospecting ever again.
What most salespeople forget, however, is all of the hard work that got them to that point. It may have taken them six weeks of hard prospecting to get the pipeline full to the point where they could close sales. Unfortunately, that blissful forgetfulness often causes them to neglect the activities that lead to a full, healthy pipeline. As a result, when the sales are either closed or lost and the quarter is over, they wake up to find that there’s nothing left. They’ve literally drained the pipeline dry, and now, all of a sudden, there’s no one to sell to.
So, salespeople have to start back at square one and get busy prospecting again. Of course, in the weeks and months that it takes to prospect and refill the pipeline there are no new sales coming in. Ultimately, that’s the definition of the sales pit. It’s a failure to understand that the prospecting you do today is going to yield you profits in the weeks, months, or maybe even years to come. If you don’t prospect on a regular basis, you won’t be able to drive revenue on a regular basis.
Is that sales pit more common in smaller, expansion-stage companies that often lack the experienced sales leadership of a larger corporation?
Inexperience can definitely cause companies to fall into the pit. But then again so can complacency! If your company’s top sales leader is a first-time sales manager, then it’s likely that they’ve never experienced or felt the pain of having to ride a month-to-month pipeline roller coaster. And, unfortunately, it typically takes falling into that pit for them to really understand why it’s somewhere they never want to go again.
The biggest pitfall for inexperienced sales leaders is forgetting how much time it takes to build a healthy pipeline. So, when sales reps have a super successful quarter, those leaders can become blinded by that success, and they forget how important it is to continue prospecting while all of their deals are closing.
What are some warning signs that should alert a company that it’s about to fall into the sales pit?
In every business, whether it’s big or small, the sales pipeline should always be stable or growing. If you’re having a great month closing deals, but you notice that your sales pipeline is concurrently shrinking, it should set off alarms. Sales leaders need to constantly look at future business and ensure that the sales pipeline is either stable or growing at the same time that deals are being closed.
Honestly, it’s as simple as that. And with the technology that’s available to sales leaders today, there’s no excuse not to constantly monitor a sales pipeline’s health. From an emotional perspective, I’d much rather see my salespeople hit their target every month and have consistent revenue growth than miss their target one month and double it the next. Just thinking about that gives me grey hair.
What tips would you give sales leaders to steer clear of the sales pit, or to pull themselves out of it should they fall in?
The bottom line is that basic sales prospecting doesn’t require eight hours a day or a 10-person team. I would establish a rule that forces your salespeople to do at least one thing that builds the sales pipeline before they end their day. That could include tasks as simple as sending e-mails to lost deals or prospects or placing calls to inbound leads, but there’s got to be something they do every single day to put deals in the pipeline.
Additionally, I think it’s important for sales leaders to routinely go into their CRMs and take stock of pipeline activity. It might be ugly and they might not like what they see, but it’s a critical task. Doing that is the only way to really determine where a pipeline stands and what needs to be done to repair it. If sales leaders aren’t following through with that, then it’s only a matter of time until they fall into the pit.
Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.
Josh Zywien is a content marketer and writer for MarketingProf.