The Stupidly Simple Formula for Sales Pipeline Management
I wanted to give you this formula for pipeline sales management because I get a lot of questions from sellers about: time management, about how to keep the funnel filled, and about when (and if) you should take people out of your funnel.
This formula helps with all three issues. It’s a simple (VERY simple!) formula. It’s this equation: E = O.
The Sales Pipeline Management Formula
E = O stands for Effort equals Opportunity. It means that your effort should be commensurate with the size of the opportunity. Seriously, that’s the formula. See, I told you it was simple!
If the opportunity is a big one, you’ll want to put more effort and time into it. If the opportunity is small or vague, it doesn't merit quite as much effort.
Used as a time management tip, E = O will save you hours every week. Those are hours you can reallocate to top prospects, the ones that represent the greatest opportunities. Or you can spend that found time on generating more prospects and go with a volume strategy.
You can also use this formula to be more strategic and get the long-term benefits. E = O is a guideline for managing your pipeline. It will help you sort out which prospects to put into your funnel. It will help you keep unresponsive suspects out of your funnel. It will also help you determine which prospects can be moved through the funnel with more time or effort.
Your time won’t be stretched so thin when you apply E=O thinking. Your pipeline won’t be a bloated mish-mash of low quality leads that barely qualify as prospects. By becoming more discerning, you will keep your pipeline clear so quality prospects can advance to closed sales.
Who Shouldn't Be in Your Pipeline?
E = O will also help you determine who to eliminate from your funnel. You will discard low-value prospects who do not realistically represent opportunity at this time. Face it -- you can't possibly give equal effort and time to everybody. And there are some plugs in your funnel that need to be taken out. There’s no shame in putting a prospect on the backburner or in admitting that a prospect isn’t going to buy from you at this time. You can always add a prospect back in at a later time IF the opportunity increases and now merits your effort and time.
For example, if someone has not returned your phone call for six months and they were low opportunity to begin with, why would you want to keep them in your funnel? This is taking valuable time away from other, better opportunities.
Similarly, if a low-opportunity prospect is under contract with your competitor for the next 18 months, take them out of your funnel. Stay connected on LinkedIn or with auto-responder emails that don’t require you to spend much time and effort. Come back in about a year to re-open the conversation and see if the opportunity is now a better one.
Of course, in both examples, if the opportunity is a large one, you’ll handle it differently. You might keep that prospect in your funnel and put more effort and time in to try and win that business in the future.
Don't Forget the Top
Finally, when it comes to pipeline management, always attend to the top of the funnel. Don’t let the opportunities that are lower in the funnel consume all your time and focus. That’s short-term thinking that will come back to bite you later. It’s imperative to continually build for the future. You need to put time and effort into long-term opportunities so you won’t end up with an empty funnel.
You never want to find yourself with too few prospects in the funnel. If you end up there, you'll make a lot of desperation moves that won't serve you well. Thinking long-term includes managing your pipeline for the future.
E = O for ROI
E = O gives you a much better shot at using your time wisely. Always consider who deserves more of your time, and invest your time and effort where the return is likely to be the greatest.