Is Your Sales Pipeline A True Business Lifeline? Or Does It Risk Going Flatline?

Even a regular flow of orders is NOT the same as a true pipeline, argues Bryan Gray of Revenue Path Group. A pipeline that in reality is only at best a dotted line - with serious underlying business health issues - is one of the Five Great Threats to revenue growth through effective selling.

Don't let fear of what you might find out become a barrier to accessing the knowledge you need.

Many people – and men are by far the worse offenders – would rather stay out of the doctor’s office at any cost than go anywhere near a check up. The thinking – or rather the subconscious fear led denial – goes like this:

"I feel ok. Maybe not super great. But not terrible either. If I let medics poke me around, they’re sure to find something. And when they do, the fact that I get to know about it will permanently jinx my health. Even if there is plenty I can still do to change my habits and prolong my active life. So I’ll carry on as I am, thank you for your concern."

Yes it’s irrational. Crazy even. But in daily life we tend to derive a great deal of comfort from letting things be and not waking a sleeping dog. And we do the same in business, particularly when it comes to the sales pipeline.

We're doing ok? Well aren't we?

Just as we often let fear rule over the rational realization that having our blood vessels checked out at sensible intervals would be a good thing, we leave the vital business artery that is the sales pipeline un-scanned and unattended. We interpret superficial indicators – such as the fact that we are still in business and that the cash comes in – as proof positive of good underlying sales health. And when the ultimate shock of system failure comes, we are genuinely surprised.

BUT … this fear led and comfort oriented approach is no longer good enough. Too many of our competitors are now taking too much good care of their own sales pipeline health for us to be able to ignore ours and still sleep soundly at night. So it’s time to get that good ol’ pipeline on the treadmill and subject it to some stress testing. (By the way, it’s much better to do this in a controlled environment, with supportive intervention at hand, than be left to pick up the pieces after a collapse in the real world.)

If your best customer goes, does your business go with them?

Let’s get started by asking a simple question: What would happen to your pipeline of sales if your best customer today dropped out of it tomorrow? Would the impact be noticeable, but you’d still do just fine? (Because your healthy system is always delivering alternative revenue sources and one of those will quickly grow to compensate for the loss.) Would the business take a knock but carry on, although in a weakened state? Would the blow be terminal?

Time out. How are you feeling about this test? Confident? A little breathless? Somewhat anxious but you’re ok to carry on? Good, then we’ll continue. Now ask yourself what shape your pipeline would be in if you lost your best customer AND your second best customer AND your third best customer. All in rapid fire order. All unexpectedly. You’re looking pale. Very pale. The monitors show that your pipeline is flatlining. Code Red here!!

Happily, we are still in a controlled environment. We can stop this virtual test any time and start to learn from its lessons. The first key learning is that we need a benchmark, a definition of “healthy” for the sales pipeline that we can use to compare with our own situation. Clearly, no two businesses are identical and there will never be a single “ideal”. But there will be common indicators of basic health we can all profitably become aware of.

What are the vital signs of true pipeline vitality?

First and foremost, a properly functioning sales pipeline will carry a healthy mix of business. There won’t be over-dependency on a small number of existing customers. Contrast this with a so-called “pipeline” that only delivers repeat business. This is not a pipeline in any true sense. It’s an order calendar. It’s completely under your customers’ control, not yours.

Of course it’s tempting to look at this situation as the ideal. Generations of sales wisdom tells us that a diet of regular customers is the healthiest possible. They cost far less, or even nothing, to support in terms of sales operation. Their revenues are predictable. Their margins are respectable. But they also carry as much high, and hidden, risk to the sales pipeline as heavy cream does to the arteries. In both cases, with over consumption, the pipe becomes inflexible, hardened and narrowed. Any sudden stress and …

A sales pipeline with real vigor will enable healthy growth and not just in new business, but even among the longest-established accounts. There will be fresh activity, signs of new life and evidence that the sales operation is still capable of teaching old customer dogs new ordering tricks, instead of just letting them lie.

A sound sales pipeline will – just like a three-dimensional pipe – have real physical integrity. In plain terms, there won’t be any holes. There will be a continuous flow, from effective new business prospecting at the top, to a steady flow of revenue-boosting orders at the bottom.

Steady is the key word here. A jerky or spiky supply of business – with long gaps between orders and sudden spurts and floods – suggests a worrying underlying pathology. In layman’s terms, you have not so much a sales pipeline as a sales dotted line. Irregular. Not fully joined up. This in turn makes true business planning impossible, given the absence of predictability. And a business that can’t plan can’t grow on its own terms. It can only react.

Finally, a healthy sales pipeline will be just like a healthy blood vessel: flexible, open and rapidly responsive to changing conditions. It won’t depend on old and slow techniques; approaches that are already far outpaced by the technology and cultural impact of online based, social media influenced selling.   

What's really under YOUR comfort blanket?       

The comfort of assumptions is an illusion. So stop assuming that your sales pipeline is in the state it ought to be for optimal performance. Get it on the treadmill and model the impact of a few tough scenarios. Don’t accept the status quo. Taking action today will save you from reaching for the statins tomorrow.