Sales & Marketing Strategy Chapter Four: Developing a Sales Pipeline

by Business Management Series on February 2, 2012 · 0 comments

in Business,Business Management Series,Management,Marketing,Sales

1-3-6-12 Month Forecasting vs. Actual

Until you establish a clear sales history, your sales forecasts will be your best guess estimate (culminating the data you collected through market research). This best guess estimate should be used to refine your goals. Developing goals are important. Although the first few years of your business’ life will be spent building a history of comparison, it is still relevant and important to strive towards realistic goals.

As you begin to build a sales history, you should measure your performance against prior quarters, halves, and then years. Setting goals at the one month, three month, six month and twelve month periods are standard points of comparison. After two to three years, you will be able to establish growth goals and measure your overall growth quarter-over-quarter, and year-over-year. Look for outside and inside factors that attribute to growth.

Internal factors include:

  • Loss or gain of sales force
  • Lack or surplus of supply of goods sold
  • Price increase/decrease
  • Promotions

External factors include:

  • Seasonal purchasing / budget buying patterns
  • Overall decline or increase in the market
  • Buyer confidence index
  • War / peace time

There are many more factors that are both in and out of your control; having awareness to these factors can often aid you in fine-tuning your sales forecast.

Playing the numbers game

You should be measuring and monitoring the direct input and output of your sales force. Often called the “numbers game”, this process is measured either in time spent in the sales process or number of call activities per day. Measuring sales time is an easier (but often less detailed) way of measuring the time your sales force spends in the actual sales process.

Many of the established sales coaches (like Zig Ziglar and Brian Tracy) mention the numbers game (which refers to the amount of sales called out, contacts, appointments and closes). Enforcing the habit of having your sales force measure these numbers allows them to create a pattern of how many calls they need to make in order to close a deal. This is merely another way that sales representatives can become more aware of their own skill sets and the performance needed to close more deals.

Sales Strategies

Using the analogy of the squirrel, the deer and the elephant, this chapter explains the positive and negative impacts of each type of sales customer. In hunting, you would work all day to hunt and harvest the meat from hundreds of squirrels to keep you fed. Squirrels are often difficult to track and require more work per pound of meat. Deer, on the other hand, require less hunting and can sustain you longer. Often harder to hunt, they still require quite a bit of work. Elephants are both scarce and require a lot of work to hunt, but can feed you for days. Elephants offer the most return on your labor.

The squirrel: A squirrel is a customer who can be the most dangerous to your organization, if not properly handled. Squirrels typically have high expectations and low cash flow to support them. New businesses are tempted to lower their costs to meet these expectations out of desperation, but often find the payout is less rewarding than the investment put into these types of clients. The double-edged blade of these types of customers is that they typically refer other squirrels to you and rarely pass a warm lead to a larger opportunity. It’s important to note that this document is not stating that you should avoid them at all costs, but to rather tread lightly and be firm on expectations. Scope creep happens with all types but this customer type typically falls to the bottom of the barrel in terms of return. Losing one squirrel; however, will not (or should not) crush your business and having your eggs spread out in many baskets is a good thing.

The deer: Deer are typically established businesses who have a positive cash flow. They are ideal in the sense that they are typically willing to invest in your products or services, provided you are able to show them a value that outweighs their investment in their offering. Deer make good advocates as well; they typically refer other deer, which makes one deer a profitable advocate. The negative impact is that you may have to maintain many deer to be profitable. Deer often take a solid interest in your business growth as well, often allowing and sharing business strategies that a squirrel or elephant would not.

The elephant: The hardest to hunt, yet the most rewarding in terms of revenue and profit. The elephant is willing to pay higher margins if you offer a service or product that can save them time and money. They have both the cash flow and the means to sustain your company in terms of revenue and profit, if developed correctly. The labor of learning the processes and politics of an elephant is often a deterrent to small businesses, but it is important to note that elephants need small businesses like yours just as much as you need them. Your flexibility as a small business offers them a faster execution of product delivery and service and they rest assured that you will deliver the customer service that they expect. A helpful tip when hunting elephants is to communicate a sense of stability by establishing procedures and processes that fit well within their red tape and politics. A disadvantage to an elephant is the high maintenance that comes with having one as a client. Your time can easily be fully invested into servicing one or two elephants and losing one as a client can devastate your business.

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Looking for ways to get ahead in today’s competitive marketplace? This Business Management series provides resellers with basic strategies, skills, and tools you can use to better manage and grow your business.

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