Many years ago, when I just started out in this business, I remember sitting down with my clients or prospective clients and talking to them about the performance of their marketing investments – trade shows, magazine advertisements, mailings, etc… Expecting to hear about their detailed reports, analysis and statistics, I was amazed by what I heard:
“We got a lot of leads”; “We gave away lots of literature”; “I think I saw some leads come through the fax the other day” and my favourite, “It sure seemed busy in our booth”.
Does any of the above sound like you?
If so, trust me when I say that you are not alone on this one – even 10 years later.
The reality is that I’m not telling you anything new– I’m no pioneer on this subject, but it’s simply too important not to get my two sense in. So here we go:
You have got to track and measure your leads and opportunities to understand what is really in your pipeline.
Here are a few reasons why:
Make better decisions:
Every year thousands of CEO and Presidents of companies across North America sit at their boardroom tables planning this year’s strategy and deciding on what lead generation activities to invest in to help drive sales.
Without an understanding of not only how many leads were generated per lead source last year, but more importantly, how many moved to a project, a quote and even a sale (although sometimes this is tough given a long sales cycle), sound marketing decisions are almost impossible.
In fact, these companies often land up re-investing in activities simply because their competitors do or because they always have in the past, and not because it has added an ounce of value to their bottom line.
By being able to evaluate what has happened with each of the leads at every stage of the sales cycle it will be easy to ascertain which activities to re-invest in and which to divest – unless the reason for investing in a particular activities has nothing to do with generating revenue.
Know what’s ‘in your pipeline’:
Many of us are ‘blessed’ with excruciatingly long sales cycles – sometimes even months and years. Yet, when I ask most companies to describe, “what is in the pipeline”, all they can tell me is how many quotes they have written.
While it is important to know that number, quotes are often the last or second last activity before business is either won or lost. There are many stages and steps before getting to the quote. Yet for some reason few people monitor the progress of their customers in those earlier stages.
The reality is that if your organization’s sales cycle averages 6 – 9 months for example, and you only monitor the number of quotes you generate, what are you going to do when you realize you are not generating enough quotes to achieve your sales objectives this coming 2 quarters? It will be far too late to start generating leads. If fact, it will be too late to really do anything.
However, if you consistently measure the number of leads, opportunities, projects and quotes at all stages along the cycle, you would have realized at least 6 to 12 months earlier that you likely did not have enough momentum and numbers to achieve your sales objective and would have, therefore, had plenty of time to start looking for solutions.
It’s your money – don’t you want to know?
It’s amazing to see so many organizations scrutinize their administration bill, think twice or three times before giving raises, and put endless amounts of pressure on everyone to do more with less and still meet the revenue and profit numbers.
It’s these same companies that spend $250,000 – $500,000 on trade shows, magazine advertisements, website, direct mail, etc, without holding anyone accountable to evaluate and quantify the ROI.
In no way am I suggesting that a company should not invest in lead generation and marketing activities. In fact, quite the opposite – I strongly encourage organizations to consider dozens are different marketing ideas to drive new business opportunities and customers. I’m just saying that these companies should apply the same rigor when evaluating these expenditures as they do with so many others.
How Should I do this?
There are several ingredients required to successfully manage, measure and track your sales pipeline. I will focus on two of them:
Step1: Have a clearly defined Sales Process/Methodology:
Using the same logic applied when tracking production lines or trailing accounts receivable, companies should break down the sales cycle into its components.
An easy example would be to break it into suspect, prospect, project, quote, close.
The company should then determine the “work-flow” from the minute a lead is generate all the way through the sales cycle stages until a sale is either won or lost. This is no different to how the company would determine a workflow from the minute raw materials hit the assembly line to the finished product.
Step 2: Drive your Sales Process using sales software:
In today’s technological world, every company, no matter how big or small, should be taking advantage of the multitude of Customer Relationship Management (CRM) software available – also known as Sales Force Automation (SFA).
If all your leads, quotes, projects and customers, as well as all activities and notes related to each of them, were all accessible in one uniform program, which could be used by all sales and marketing people with the sales process as the “language”, the power to measure, track and understand what is in your pipeline becomes not only a reality, but also easy and highly efficient. It just takes commitment, discipline and follow through.
In closing, if your company is like most out there, and is investing good money into generating leads and trying to drive sales, you owe it to the company to actually understand if the investment is giving back.