It seems like every sales manager I have talked to lately wants to talk about activity and how to enforce minimum activity expectations. It took a few of these conversations before a simple truth became obvious to me: Pipeline is way more important than activity.
The Status of the Pipeline
One manager I talked to wanted to know what I thought of requiring at least three face-to-face meetings per week with first-time prospects. Let’s see how this plays out...
Week 1: 3x
Week 2: 3x
Week 3: 3x
Week 4: 3x
Week 5: Let’s say by week five, 9 out of the 12 prospects from weeks 1-4 are still in the pipeline at some point of development. Do you really want this salesperson to try to juggle keeping all 9 of those in motion in week 5, while still calling on three new first-time prospects? I don’t think so. You would want them to move as many of the 9 as possible from Discovery to Closed Won.
However, if only 1 of those 12 from weeks 1-4 are still in the pipeline by week 5, you might want the salesperson to have 4-5 first-time calls the next few weeks.
It’s clear, isn’t it? The status of the pipeline is the most reliable indicator of future success, not the amount of activity.
Do the Math
If it doesn’t make sense to make a blanket statement about the number of calls per week, what does make sense? Just do the math. Let’s say you need each of your salespeople to write $500,000 in new business in a year. Assuming your average sale is $50,000, each salesperson needs to close 10 new accounts each year (10 new accounts x $50,000 a year = $500,000).
Assume your tracking shows that 1 out of every 3 accounts that move to the Discovery stage end up closing. If that’s the case, your main focus should be to ensure salespeople have 5 prospects in the Discovery stage each month (5 instead of 3 so you have a little cushion).
Month 1: 8 new prospects were identified and 5 of those moved to Discovery. Mission accomplished.
Month 2: Say the salesperson has a harder time moving prospects through the pipeline in month 2, so they end up needing 12 new prospects to get 5 to Discovery stage.
Don’t get fixated on activity. Do the math, and then focus on the pipeline to achieve the results you seek.
Additional resources to help your sales pipeline:
- Where Most Sales Pipeline Problems Spring a Leak
- Are Long Sales Cycles Messing with Your Pipeline? (Part 1)
- Are Long Sales Cycles Messing with Your Pipeline? (Part 2)
- Friction Between Buyers and Sellers Persists