First, remove all opportunities that have exceeded their shelf life. If your average sales cycle is three months but you have proposed opportunities that are six to nine months old, the probability of closing those opportunities is almost zero; kill them or send them back to nurturing.
After those deals are removed from the pipeline, apply a basic revenue factoring approach to remaining opportunities. A conservative approach is to count on 30 percent of the revenue associated with qualified opportunities that are proposed and in a closing stage. This makes allowances for actual close rates as well as deals that come in below the original forecast. You can now calculate your revenue “go get” by subtracting your factored revenue pipeline from your 2010 objective. Our Revenue Planning Tool helps you with all the calculations.
Now that you have a good handle on the size of your challenge it is time to determine how to allocate your sales and marketing resources. Four rules:
- Make sure that your marketing team is aligned with your mission and you are providing them ongoing feedback.
- Focus your activities on those high-probability environments that fit your capability sweet spot.
- Ensure that you articulate your differentiation in a way that sets you apart from your competitors.
- Now is also the time to make the tough call on marginal new opportunities. Pursuing unqualified opportunities wastes valuable resources and may actually cause you to miss an opportunity that is winnable.
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Matt Smith is the co-founder and executive vice president of 3forward, a sales consulting company that helps companies find and create leads, increase wins and accelerate sales. He can be reached at email@example.com.