Sales Pipelines Aren't Strategies

Posted by James Fennessy

Too often, sales pipelines are constructed with milestones that register activity rather than events. Effective strategies are those that focus on events and on customer commitments not just on checking off which activities a salesperson has completed. It is a mistake to depend on pipeline milestones such as “customer gap analysis defined,” “initial sales meeting completed,” “customer audit performed” or “proposal submitted.” These so-called milestones have little to do with measuring the effectiveness of a sales strategy and even less to do with how to measure the likelihood of closing a sale. Yet it is just these kinds of measures from which forecasts are so often constructed. No general would enter a battle and determine strategy based on things like “guns loaded” or “marching orders issued.” These activities are not inconsequential, but they contain no valuable data as to where the battle plan stands with regard to its objectives.

Great sales strategies and pipelines that track sales progress, measure events rather than activities. This distinction is critical to producing accurate forecasts. If, for example, I am attending an important client meeting, it is very likely that I need to buy a plane ticket, drive to the airport, park my car, check in to the hotel in the city where the meeting is being held, etc. While each of these activities is critical to my attendance, they have little direct impact on the quality of the meeting.

Reflect, however, on the kinds of milestones that are built into most sales pipelines. Do they reflect the sales equivalent of these kinds of activities? Huthwaite’s research indicates that they often do. Is it any wonder that pipeline milestones like “submitted a proposal” or “delivered capabilities presentation” contribute to poor forecasts?

In short, effective sales strategies require planning that identifies the outcomes of events as the basis for moving toward a sale. The primary distinction here is that “events” incorporate the customer’s point of view, while “activities” have a seller-only perspective. Therefore, if strategy is the linking of events to achieve a specific sales outcome, then it is these kinds of events that should constitute the milestones in the pipeline tool we use to forecast.