I often see pipelines full of deals. Old deals. Sometimes they are in a stage called Waiting. Waiting for what, for whom?
Sales managers and directors think that a full pipeline means good sales in the future.
But...
You should only have active deals in your pipeline. That means deals that are moving forward. You have past and future meetings, the customer has interest to buy, he has budget for it. And the purchase brings them some value and/or solves the problem.
It should also meet your criteria for ICP (Ideal Customer Profile - your target customer).
There is an example of "old deals" pipeline. A graph from our SalesGang application:
You can see that the company has about 1,407 open deals and 935 of them are older than 2 years. While sales cycle length (time to win) is 222 days, so on average they win deal in less than 1 year -> all 935 should be won or lost already.
What to do with old deals and have a healthy pipeline?
Do deal qualification and monitor deal progress and its age.
Lead/Deal Qualification
At the beginning of the discussion with the customer, try to get answers to these questions (based on BANT methodology)
- Budget - Do they have a budget for your product/service? Can they afford it?
- Account - Who will make the decision to buy? Who is involved in the process?
- Need - Do they really have a problem that you can solve? Is it a big pain for them?
- Time - When will they have it solved? Do they have a time frame?
When you have all the answers, you have a Sales Qualified Lead (Deal) - SQL. If the customer doesn't want to buy now, but it is interested in you product and have problem you can solve - it is marketing qualified lead - MQL. You can still communicate with MQL and keep them in the loop, but it shouldn't be in your active pipeline.
You may get response from customer that they will start on the project in 2 months, so you have to wait. It is ok, but should not repeat every 2 months :-)
Usually you think that lead could be your customer in the future and you keep it in pipeline. But today it has no budget or need is not so high -> Lost the deal and plan future activity in 6 months to check the situation. You can also send them newsletter every 3 months to keep them informed.
Conclusion
Work only with qualified customers, who have budget and want to move forward and discuss your solution. Do not waste your time bothering uninterested customers.
SalesGang can help you. You can see your Deal Health Index of each deal and for pipeline. Learn more about Deal Health Index here.
Don't be afraid that your win ratio is low. Your main focus is the number of won deals each month.
It is good and healthy to lose deals, then you have time to focus on right customers.
Average for all SalesGang customers is 25%, so they win "only" 25% of all deals -> 75% of deals are lost.
Happy selling with SalesGang!
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