1. December 2010
Sales; “pipeline” or “sewer line”?
By Joseph Houle budget qualification; 40 percent prob-
ability, major discovery requirements
This economy cracks me stage.
up.Whether you like it or not, there’s Stage 4: Proposal submitted and
business to be won out there. As my ROI analysis with client; 60 percent
work takes me from convention center probability with building ROI analysis
to convention center, I always look for- with customer.
ward speaking with the sales managers Stage 5: Contract negotiations
from my competitors. While it is un- and getting final signatures; 80 percent
orthodox, it’s an opportunity to learn probability and reviewing proposals,
like no other. technically selected.
For the past two years, my counter- Before moving from stages, you
part managers have gone from speaking must develop and adhere to a set of
of closed business and revenue growth criteria on each and every sales oppor-
to speaking about “pipeline.” At first, tunity.
this was a sales term that made sense, For example, before moving from
but as I thought about it, the term had Stage 1 to Stage 2, you must have
no connection to winning business. made contact with the right person in
In most cases, the development of the the buying organization and have de-
pipeline becomes a meaningless exer- termined that there is a need for your
cise. As time went on, I re-labeled the product or services.
term as “sewer line.” Before advancing from Stage 4 to
An inexperienced and unrealistic Stage 5, you have determined that the
sales executive will allow themselves to details of the product or partnership
be caught up in the creation of the pipe- have been discussed and agreed it’s a
line as a way to forecast sales regardless good fit for both sides. Also the pric-
of their ability to sell the exhibit. Sales ing of the deal is in the client’s ballpark
forecasting is a notoriously difficult budget. Lastly, the rough timing of the
problem and inexperienced managers close of the deal has been discussed.
and AE’s learn the hard way that sales When forecasting sales as an ex-
meetings, prospect interest and appar- hibit builder, try to match each sales
ent momentum do not translate into engagement against the milestones/
closed sales in anywhere near the time stages listed above. Notice that there
and speed one would hope. Missing a are no stages at 100 percent probabil-
sales forecast hurts every company, no ity. That happens when the contract is
matter what size they are. signed and deposits are received.
Rather than viewing the process as Joseph Houle is the vice president of strategic development at LAB Exhibits. Actively managing the sales fun-
He is available for speaking engagements and can be contacted via email at
a pipeline, view it as more of a sales jhoule@lbexhibits.com.
nel, not the sales pipeline, is a great way
funnel. As the qualifying process to get the most out of your sales leads
continues, fewer and fewer leads get company will see the forecasting pro- the company’s resources. and prospecting efforts. Analyzing the
through, allowing your organization cess become a pleasant and rewarding In the exhibit business, I catego- progress of sales opportunities shows
to focus its resources on winning the experience. rize the stages of my sales funnel as which deals are lagging and which are
business. Leaders in the sales field must con- follows moving along faster than expected.
Changing a company’s mentality stantly evaluate where an opportunity Stage 1: New prospect; 10 percent This gives sales management an op-
from creating a sales pipeline to man- is relative to the key sales milestones probability, cold calling lead or show portunity to work with the sales teams
aging a sales funnel is no easy process. and if sales reps are realistically cat- floor follow up. to close as much business as possible,
As Winston Church once said, “There egorizing various opportunities. Stage 2: Prospect engaged; 20 as fast as possible.
is nothing wrong with change, if it is in When my public speaking lands percent probability with lengthy con- Joseph Houle is the vice presi-
the right direction.” me in front of a large group of busi- ference calls about past experiences, dent of strategic development at LAB
After the success rate of a sales ness leaders, I tell them to categorize and where their current exhibit house Exhibits. He is available for speaking
funnel increases and the sales team the stages of each opportunity, further is not providing value. engagements and can be contacted via
buys into the qualifying process, your qualifying each lead in order to focus Stage 3: Design requirements and email at jhoule@lbexhibits.com.