At Last, a Cure for the Stagnant Sales Pipeline
If you are at risk of failing to make your number in 2012, the problem could be your pipeline. Are opportunities flowing, or are they silently killing your year? It's impossible to deliver predictable results if you cannot look forward to see where your business is coming from. Pipeline stagnation is often due to the lack of a process for releasing opportunities from the sales process and returning them back to Marketing for nurturing. Does this sound like your organization? If so, read on because I have a proven solution for you!
Stagnation: Symptoms of The Quiet Cancer
- Opportunities that are endlessly open and bloat the true size of the pipeline
- Reps keeping inactive opportunities alive for fear of seeing them assigned to someone else if they are closed
- Marketing pointlessly nurturing returned leads without the benefit of understanding who they are and how they have interacted with the company in the past.
Since the beginning of this year, our firm has been engaged with a global B2B technology firm to develop and implement a customized sales process. During a design workshop we talked about the start of the process where the leads become opportunities and enter the sales process. That made sense. Then we talked about how opportunities become leads when they stop moving forward. That idea was completely foreign.
(For a primer on the fundamentals, read Vince Koehler’s excellent overview of Lead Development.)
The Dreaded Open Loop
Their sales process lacked a way to handle opportunities that had stalled and needed to be recycled for more nurturing. They had just 2 choices:
- Discard the work-in-process as “Closed – No Opportunity”
- Let the opportunity linger in the CRM system
By choosing “Closed – No Opportunity,” any chance of winning the deal later was lost because it had disappeared from all radar screens. The alternative was to leave the opportunity in active status in order to attain a pipeline target. This option encouraged reps to waste additional time and energy on stagnant deals. It also distorted essential CRM process metrics like sales cycle length and forecast accuracy, compromising the data needed to manage the business. These were both ugly alternatives.
The Light at the End of a Very Dark Tunnel
With the advent of the current generation of lead development systems, like Marketo and Eloqua, there is now a viable third option. We call it a Return to Nurture (RTN) loop. This is the equivalent of ‘reworking’ a lead rather than scrapping it or pretending it isn’t utterly dormant. (The term ‘Return’ implies that the opportunity originated from the lead management system, but it works equally well for opportunities that are initiated by the sales force.)
What Happened to My Deal?
The most common reasons for RTN include:
- The decision maker has changed jobs
- Funding for the purchase is delayed or cancelled
- Business conditions and/or priorities have changed
- Timing is significantly extended or uncertain
Let’s Shift the Workload!
Sales reps are an expensive resource for nurturing leads into opportunities. They also lack the temperament to assist buyers in the early stages of gathering information and educating themselves. The pressures to build a pipeline, commit revenue to the forecast and earn a commission check are just too great. A robust lead development system offers not only an on-ramp to the sales process, but it provides a re-work loop for RTN opportunities.
How and When to Close the Loop
An effective RTN loop flags all opportunities that have stayed in one sales stage for too long. A rule of thumb is that the duration is 3 times the average number of days for all opportunities in that stage. This requires a disciplined cadence for reviewing aged opportunities.
The RTN loop must enable reps to:
- Transfer the opportunity to the lead development process
- Provide background information for nurturing
- Designate the type of effort that is needed
- Direct the opportunity to the correct stage of lead development
Putting it All Together
The RTN loop is a component of an integrated Lead Management and Opportunity Management workflow. Best practices in enabling it include the use of an RTN Handoff Form. An example that you can customize is available by clicking here. This important element leverages the work that has been done to date on the opportunity and provides direction to the lead development organization. Once the manual practice is proven, automating is the next advancement.
As always, I am eager to hear your thoughts and experiences. Please comment below.
Now It’s Your Move
Tight integration between Marketing and Sales with a closed-loop process allows leads and opportunities to flow in accordance with the real dynamics of the customer’s buying process. RTN is an advanced concept that distinguishes world-class operations from those who simply aspire to hit the quarterly number. Imagine how effective your sales process could be with a comprehensive and staged approach to closing this costly gap.
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