The sewer systems of of our towns and cities are struggling to cope with a phenomenon known as the “fatberg”. These fatbergs are formed by an unappetising combination of oil, grease, food waste and other materials that have no place in the system.
Unfortunately, as these fatbergs harden and grow, they cause obstructions that require specialist equipment to remove. The problem is largely avoidable, it’s obviously a pretty unappetising story, and you may wonder why I’m sharing it with you.
Something very similar is going on in many sales pipelines. They are clogged with so-called opportunities that haven’t moved for ages and are unlikely to close any time soon. And the longer you delay clearing them out, the harder it gets to remove them…
Most studies of sales pipelines indicate that at least one-third of the opportunities show no meaningful signs of life at all, and that figure gets much worse when you drill down into the pipelines of the least effective sales people and organisations.
These “fatberg opportunities” have no place in the pipeline. Some should never have been introduced into the system in the first place – they were never well qualified. All too often, the prospect was never actually likely to buy anything, and even if they did, they were never likely to buy from you – and this could have been established through some elementary qualification.
In other cases, there might initially have been the elements of a potential opportunity, but either the customer’s circumstances have changed, or we failed to execute our sales strategy as well as we could have and as a result the opportunity is now well and truly stuck.
The projected close dates – if they were ever accurate – are now no more than a figment of the sales person’s fevered imagination. And because their value continues to be counted in our overall pipeline numbers, we may feel a false sense of security about our future revenue potential.
Trying to close the unclosable
It’s no wonder that forecasting is such a challenge in these sales environments. And it’s no wonder that this really comes home to roost at the end of the Financial Year – when sales people are often desperate to play the “Mission Impossible” game of trying to close the unclosable.
For as long as they hang around in our pipelines, these stuck opportunities reduce our capacity to move the remaining well-qualified opportunities through the system. They offer false hope, and they distract focus from the deals that actually deserve our attention.
By the way, this is almost never a problem with your most effective sales people. They tend to have too much respect for their own time to waste it pursuing opportunities that they judge (usually accurately) they are never likely to win. They also tend to have a far higher win rate from qualified opportunities, and as a result need fewer of them to make their numbers.
If you suspect that the fatberg effect applies to any element of your sales environment, the time to act is now. The start of the New Sales Year offers a uniquely timely opportunity to clear out all those stuck opportunities and start afresh with a clean pipeline.
One of the most effective tactics is to insist that sales people justify – based on evidence, rather than hope or supposition – why every currently active opportunity deserves a continuing place in their pipeline. Think of this as active disqualification.
If their arguments are weak or unconvincing, they should be guided to remove them from the pipeline. You’ll get some pushback, particularly from sales people who have come to regard the apparent value of their pipeline as a comfort blanket.
And, as a sales manager, you need to look at your own behaviour and ensure that it isn’t sending the wrong signals to your sales people. Criticising or punishing your sales people for having a smaller pipeline when all they have done is to eliminate deals that should never have been there in the first place won’t help.
A new approach for a New Sales Year
Then – most importantly – you need to put systems and processes in place to avoid building up a new generation of future fatberg opportunities. You need to insist that sales people apply a disciplined and consistent approach to qualifying new sales opportunities.
You need to monitor the time-in-stage for all opportunities, establish benchmarks, and focus particular attention on opportunities that have failed to move forward as quickly as you would expect a well-qualified opportunity to do.
You need to create a culture which encourages sales people to continuously re-qualify their opportunities. You need to encourage them to recognise when – despite all their efforts – it is proving impossible to breathe new life into stuck opportunities.
You need to tell them that it is OK – in fact, it is expected – that they eliminate these discredited opportunities. And you need to encourage them to invest the time that is freed up to target and pursue the right sort of new opportunities.
It can be very helpful to work out exactly what it is that your top-performers do differently and distil those lessons down into a simple playbook that equips the remainder of your sales people to emulate their winning habits.
Flush those fatberg opportunities away now!
We’re still in January. This is the time to take decisive action. Get your protective gear on, turn on your power hoses and flush away all those stalled deals that are never likely to go anywhere. And then start as you mean to go on.
Will your apparent pipeline values decline in the short term? Almost inevitably, but only because the value in those opportunities wasn’t real anyway. Will your pipeline values recover? Pretty quickly, if you focus your teams on uncovering inherently high-quality new opportunities.
Will your future forecasts prove more accurate? Unquestionably. And what about your revenues? Well, if those opportunities were unclosable, they were never going to generate any revenues anyway. So, you’re unlikely to lose in the short term, and very likely to gain – probably significantly – in upcoming forecast periods.
What’s stopping you?