How your lead generation activity can support strategic pipeline management
Many growing digital media companies say that their main problem is ‘closing’ sales opportunities. They get shortlisted in a competitive pitch and stake the next wave of plans on a one in three chance of winning. OK so maybe the whole company won’t sink or swim if one bid is lost, but the reliance most digital media and technology businesses place on closing a small number of key deals presents a big problem – if you lose one, there’s nothing to fill the void.
In the world of selling there’s a tried and tested way of hedging against this situation – successful pipeline management. One thing that we know for sure is that the more opportunities you have, the more you are likely to win. Simple law of averages really. Granted you have to make sure that your sales campaigns are water tight and that you do all the things you’re going to need to, but the fact remains that every single sales led company the world over protects against over reliance on winning major projects by ensuring that the supporting pipeline is kept full at all times.
What Does Pipeline Management Mean?
So, what does pipeline management mean? Well, conversion rates will vary by company and sector but a prudent approach to win ratios will stand anyone in good stead. Typically, you need to think in terms of a 3:1 ratio of ‘closing’ deals, i.e – of three final stage (shortlisted) pitches, you’ll win one. Taking this further back in the sales cycle, the ‘times three’ effect often works well. So, to get three opportunities to the point of final pitch, you’ll need nine to get to the stage of formal proposal. To get nine to formal proposal, you’ll more than likely need 27 (yes twenty seven!) ‘value proposition’ meetings or presentations. Blimey. Now finally consider that you’ll then need almost 100 (OK so 81 using my maths so far) active ‘prospects’, so companies who you are talking to and/or are aware of your proposition. Numbers getting scary now? Don’t worry, as you’d expect I’m about to offer some solutions :)
Of course all of this doesn’t unfold overnight. Generating and maintaining a healthy sales pipeline is ongoing and for many business the very shortest time-frame from prospect to win is three to six months. With that in mind it makes sense to take a long term view and get strategic about outbound prospecting for new business.
To get yourself in the nice position of boasting a fat and healthy pipeline you’ll need to spend some money. Setting aside other elements of your marketing and client acquisition strategy (search engines, events & exhibitions etc) the single most effective way to generate interest in your proposition is to contact target punters directly. To do this you’ll need a highly trained, motivated and rewarded (and thus effective) resource to do the job. And therein lies another problem – they don’t grow on trees.
If you can find and nurture an effective internal ‘door opener’, don’t let them out of your sight. They really are gold dust (Take that from me, in over 15 years of technology selling I’ve only seen a handful). You’ll need someone who’s intelligent, super articulate, hard working and not afraid of knock back’s. They’ll need sound marketing support and a decent proposition (more of that another time), and you’ll need to cross their palm with significant amounts of silver (cos if you don’t then somebody else will). What’s more you’ll have to open up a path that sees them move ‘out on the road’ after not too long as they’ll want and need the career progression. Hang on a minute, won’t that mean you’ve made your star ‘prospector’ redundant – er, yes it will. Problem. Again.
Outsourced Lead Generation Is Your Answer
So I guess you’ve worked out where I’m headed with all this. Yes, as founder of an appointment setting agency I’m going to suggest that outsourcing is at least part of your longer term plan for all this. An external lead generation agency (and be careful of the term ‘lead generation’ as it’s really only strategic appointment setting that you can control) would by definition have the process and skills nailed to ensure that your proposition is understood and articulated to your target audience. They’ll then earn their keep by securing qualified new business introductions for your business – hopefully on a pay on results model if they put there money where their mouth is.
As you grow, you’ll inevitably begin to establish a professional sales function – with roles carved out for specific business development and account based activity. As a result you should absolutely consider some internal resource to generate interest in your proposition on their path to business development manager. But, and back to the theme at the start, make sure you hedge against over reliance on one major deal (or person) and get a smart agency to share the load.
Read about Pay on Results Lead Generation
