Sales Pipeline Definition

Recently I posted this entry on Wikipedia to give a definition of Sales Pipeline but it was deleted and replaced by a redirect to a term referred to as "Sales Tunnel" !

Who uses Sales Tunnel as a regular term in marketing or sales, I don't know of any.

So for those of you looking for a Sales Pipeline definition here it is:

06:35, 18 December 2007 (UTC)

The Sales Pipeline is typically used in business to business sales to describe the future potential for achieving sales revenues. It is composed of a number of opportunities (or deals) and/or Sales Leads that have been identified by a company's marketing, sales or customer service departments.

The Sales Pipeline starts at the point at which someone is identified who may have a need for a company's offering(s).

Sales Pipelines finish as the point when a company receives a purchase order (or other form of sales order - such as a contractual agreement status).

There is split thinking over whether the Sales Pipeline should include all types of lead. Sometimes it is useful for completeness to include any type of lead as this can present the optimum forecast this is also useful in some organizations where there is a high level of internal political demands (see ref 1). If all types of Leads are included in a Sales Pipeline, then it is useful to have these categorised at the beginning as simple sales inquiries (also known as 'suspects') or qualified leads (also known as 'prospects')(see ref 2).

Recent thought leadership tries to distinguish between marketing activities and sales activities by defining the start of the Sales Pipeline at the point when a lead is categorized as 'Sales-Ready'a term to denote that the Lead has been through some form of qualification check (see ref 3) the marketing pipeline and the sales pipeline, http://blog.startwithalead.com/photos/uncategorized/2007/09/18/intouchclosedloopleadmanagement_3.jpg.

With this thought leadership in mind the Sales Pipeline can be defined as:

"An estimate of the total sales revenue amount calculated from the volume of opportunities and qualified leads over a fixed period of time where each lead or opportunity is included based upon an estimated sales order date within this fixed period."

The Sales Pipeline works on the principle that at the start of the Sales Pipeline you have an inquiry or lead coming in, which progresses to a qualified opportunity or deal and finally turns in to a financial order. The length of the sales pipeline determines the sales cycle or sales campaign time.

A graphical views of the sales pipeline: [1] [2]
References: Page 20, Managing with Power - Politics and Influences in Organizations, Jeffrey Pfeffer, ISBN 0-87584-440-5 [1] Page 70, Sales and Marketing The Six Sigma Way, Michael J.Webb, Tom Gorman, ISBN 978-1-4195-2150-8[2] Page 161 Lead Generation for the Complex Sale - Brian Carroll, ISBN-13:978-0-07-145897-9[3] Sales & Marketing Common Language published On Quota Ltd. 2004, copyright 2003 Peter Weson, Mark McCarthy & Stephen Pye [4]

Intro Sales Workflow Management Processes

Todays blog will discuss what the core sales management processes are, how they connect together. I will also try to put some humour into this dry subject. I will focus on two themes and would welcome any body's view on these:

• Sales Training - "About as popular as someone making a smell in a lift..."
• CRM Systems - "About as popular as someone else making a 2nd smell in the same lift!"

It is rare to see a company that has broken down and integrated the overall sales process management in to a workflow. Its a little like our sales pipeline management at the top of the funnel we often have those with senior sales management jobs (can be the CEO or Managing Director) try to identify and analyse their sales process management.

The next step would naturally be to have the people responsible for the sales pipeline management attend process based sales management training courses. This would prepare them for potential changes in the way they manage their various sales manager jobs. These changes are also essential to ensure user adoption of any type of sales workflow management software.

Having interviewed and trained 100s of managers, it is my experience that no matter what job they have, be it sales manager jobs, regional sales manager jobs or other senior sales management jobs (Sales director, VP sales etc.), most are not aware of the overall sales management process.

Senior Execs would like to find it, but just like trying to find a Xmas present for a teenage son or daughter this is not so easy:

Son: 'Get with it mum all the kids are now using MP3s not CDs anymore'

Mum: 'Are they sorry? Oh I remember when we used vinyl LPs those were the days....'

They can run in to difficulties as they maybe perceived to be out of touch by individuals holding sales manager jobs or roles that involve a level of sales process management. Often if the senior executive has had a finance background it is harder for them to comprehend the nature of the sales management process and certainly how this could be implemented in software. Most people with experience with a sales management process are not necessarily equipped to assist in creating a sales workflow management software that supports the sales management process.

The problem in part lies in the definition, the overall sales process management in my opinion is a combination of six distinct business processes that form the backbone of the overall sales management process. I have highlighted below the six:

• Launch Management - Introduce new/refined offerings in to existing or new markets


• Offerings Management - Maturing offering as market acceptance happens


• Portfolio Management - Targeted and existing customers being managed in a territory


• Pipeline Management - Leads and Opportunities coming from target and existing customers


• Loyalty Management - Delivering & servicing on offering propositions to create brand loyalty


• Competition Management - Research + Analysis of competitive threats in existing customers
  
  

I don't think a single CRM system offes a tight connection between all six business processes if you know of any let me know.

The answer could be very few people understand the sales management process, hence few can define a sales workflow management processes. Without the effective process definition, sales pipeline management, customer portfolio management or sales team management, it's not easy to build effective sales workflow management software!

There could be another more straight forward reason. The suppliers of the CRM systems traditionally establishing a focus on their client's sales reps. The logic goes like this:

CAUSE: "MORE SALES REPS = MORE LICENSES = MORE $ REVENUE"

EFFECT: "LET'S NOT INVEST TOO MUCH IN THE SOFTWARE THE MANAGERS NEED, ANYWAY SALES MANAGERS JOBS WOULD WE RESEARCH EACH INDUSTRY EVEN IF WE KNEW WHO THEY WERE! LET'S JUST GIVE THE DESIGN OF THE SALES WORKFLOW MANAGEMENT SOFTWARE TO THAT PROGRAMMER OVER THERE, I HEARD HE WAS A SALES MANAGER ONCE, WELL IT MAY HAVE ONLY BEEN FOR SIX MONTHS BUT STILL.... "

Think I am being harsh?

In 2000 a well known CRM company bought a well known Sales Management Consultancy with over 100 consultants for over $250m with the sole purpose of taking their sales process management intellectual property and emdedded it in the sales management workflow part of their CRM software. 4 years later they still hadn't managed to do it -

Want to know a secret? shhh don't tell anyone but the software techy engineers apparently knew better than the sales managers about sales workflow management processes.

Want to know another secret? shhh don't tell anyone but the CEO explained to the consultancy company that their work on sales pipeline management and other processes should not slow down the sales of licenses, even if it was in the best interests of the customer to prioritize sorting out their sales management process ...

Question to think over before my next post, which of the three items below do you or would you use in a domestic situation?

I'll explain the purpose of this survey and how it relates to our topic in my next blog post, but if any of you can guess I will give out a prize -I can't tell you what prize as it will depend on how many guess it correctly and what I can afford!

Item 1: Simple Knife with Tools

Item 2 : Complex Knife with many Tools

Item 3 : A tool box