Many salespeople confuse the establishment of a pipeline with establishing a pipe dream. I don’t mean to be harsh with this statement. We are all naturally optimistic and, sometimes, this optimism gets us into sales trouble – specifically, when we confuse a prospect who is willing to talk to you with a prospect who has a set of needs that can be satisfied by you and your company. These needs must be expressed in terms of some level of discomfort that the prospect is currently experiencing.
When you have the ability to help your customer achieve a permanent improvement in one or more circumstances within his or her business, then your pipeline is indeed a list of potential new deals. Following are some questions that I suggest you examine for each opportunity in your current pipeline. If you can’t answer these questions, then you don’t have a pipeline but, rather, a pipe dream.
Is there an opportunity?
No, seriously. Are you working with an organization that has a real opportunity to address real needs, and will they do it in the timeframe that makes sense for you? Do they recognize that improving or remedying the situation will have a tremendous impact on their business? Are you talking to all of the people who have the ability to authorize a release of funds, changing processes, changing vendors, etc.? If not, you may not have an opportunity.
Can you compete?
Sometimes, circumstances are such that competing for the opportunity is not feasible. Would you need a level of sales support that cannot be provided due to scheduling or other conflicts within your organization? Or, is the opportunity of such a magnitude that your organization cannot handle it by itself?
There are many issues that can impact an organization’s ability to compete. You need to clearly understand all those issues as they apply to your organization, as well as to the potential opportunity you are reviewing. In the event you cannot compete, you should withdraw the opportunity from your pipeline.
Do you want this customer?
Should you win the opportunity, will it be a situation that significantly advances your goals and your organization’s goals? If not, you need to reconsider this pursuing this opportunity.
Once closed, will the opportunity be profitable?
One of the quickest ways to go out of business or to encounter sales burnout is by pursuing deals that are unprofitable. Not only do you incur the cost of pursuing the deal (hard dollars and time), but you also have the heartache of waking up one morning with a new customer who is not capable of providing your organization with the level of profit that you require.