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What is more important in sales, closing deals or building pipelines? I would say the answer is both, but the actions of sales people on average seem to say differently. Why is that? Are sales managers coaching to the right outcomes? Here are three typical scenarios that demonstrate the right and wrong ways to close deals and build the pipeline simultaneously.
If a sales person works deals for the current year but does not spend time building the pipeline, what happens? The sales person may make quota for the current year or even exceed it. But where are their sights when it comes to the following year? Are they spending so much time on this year’s deals that they are then starting from scratch in the next year?
Beware of this “rinse and repeat” pipeline routine year after year. It can become dangerous if your sales cycle is longer than three months. Sales reps may make their quota every other year but it will be tough for them to successfully achieve it every year.
What happens if sales people spend too much time building their pipelines but don’t have enough qualified deals? This situation can be a nightmare. The pipeline may look great on paper, but if there are not enough validated, quality opportunities to work on and close, then most likely their pipelines are not real.
It’s possible that a sales person is struggling to get higher up in the organization to ensure their time is aligned with where their executive buyers are spending their time, money and resources. If they continue to add unqualified deals into their pipeline, then it gives everyone, including management, a false sense of security. No one wins in this situation since no one will achieve the right outcomes whether it be the sales rep, the sales manager, the company or your potential buyer.
If a sales person successfully finesses deals and makes quota for the current year and still continues to build a quality pipeline, what happens then? Nirvana. These are most likely your top performers who are achieving the right outcomes for everyone. They know that making or exceeding quota year after year is their success criteria.
The way they do it is simple: account planning, which allows them to honestly recognize what they know and don’t know about each customer or prospect in their territory. Top performers plan on how to access the right executives to have the right conversations at the right time or provoke fruitful discussions. They always have a keen understanding of their buyer’s priority business goals and timeframes and then align their products and services to the specific goals they can affect. With their eye on the prize, they balance their time to build a multi-year pipeline based on buyer priorities while also closing deals on customer/prospect timelines.
Too often, sales managers tell me that their sales people struggle to build their pipelines when working one or two deals to closure. That never made any sense to me. Sales managers should be coaching their team to the right outcomes. That means ensuring that time is balanced to be successful at closing deals this year and a quality pipeline is built for the future. Where do you stand on this?