How to Manage the Sales Process Life Cycle

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Welcome back to another edition of Whiteboard Wednesday. This is probably one of my favorite topics because it really gets into the concept of the work that salespeople do and how they can manage it more efficiently. And this is about sales efficiency even more than effectiveness because (and I’ve said this a lot) selling is really about the flawless execution of a lot of very, I would say, otherwise very simple things that have to happen consistently and over time, which is what drives the complexity.

So managing the sales life cycle is really what gets at the core of what challenges salespeople to be successful.

Now I will start out just by talking a little bit about in my mind what kind of stuff (I love the word “stuff”), what kinds of stuff does sales do? (“Stuff” is a technical term.) So what is involved in the role of selling? What do salespeople do all day long? What are they involved in? What is required?

Contrary to popular belief, I would say that selling really has three primary components. There are three things that salespeople need to keep track of, three major things.

First and foremost is what I will call active, and we will say late stage, opportunities, the deals that we’re trying to close. What’s in the bottom of the funnel? What are we closest to opportunities? (Sometimes you got to phonetically do that, take that out.)

This is our money pile basically. This is where we’re going to make our money. So the first imperative for sales has to be to manage actual active late stage opportunities that we’re trying to convert into revenue in a meaningful period of time.

The next area that sales has to focus on is fairly simple – new prospects. The term that’s getting a lot of play out there right now is this concept of TOFU, Top Of the FUnnel stuff. We can all relate to that because when we fail to generate new TOFU, no matter how many late stage opportunities we have, no matter how much business we’re trying to close, the lack of new prospect focus, focusing on prospecting as an activity, is what creates inconsistencies in our pipeline, revenue peaks and valleys.

You will hear me again and again just talk about how critical it is. In a lot of respects, the only thing you can control is the amount of activity you put forth in the area of new prospect and top of the funnel stuff.

The last area that sales has to focus on is what I would simply call “all the other pipeline or funnel opportunities.” So there is the stuff at the top, there’s the stuff at the bottom and then there’s everything in the middle. So these are three very different work buckets, three very different categories of work, and the other thing that makes it difficult is they require different skill sets and different focus and different time allocations, and they do so at different times.

So if I’m working to close at the end of a quarter or the end of the year, whatever your period is, a number of very significant opportunities that are going to make me money, well, of course that’s going to detract from my prospecting, but I still need to do some of it.

As my Bottom Of the FUnnel, BOFU, opportunities start to dry up then I can reallocate and need to reallocate more new prospects. So one of the challenges (and I will come to this in another issue) is that CRM as a technology is not particularly well-suited in the way it’s configured  in most organizations to enable the work flow to support this different kind of life-cycle situation, this dynamic work allocation that salespeople have to figure out how to do.

So I have actually developed a system for this. I’ve actually developed a number of customizations within the CRM of choice for me, which is Salesforce.com, to deal with this.

But first and foremost, you’ve got to acknowledge that really, if you think about it, there are three kinds of things we’re going to be working on. Each of these probably represents more like a mode we go into. There’s a prospecting mode, there’s a “closing and working my deals” mode and then there’s kind of “everything else in the middle” mode.

The question you’ve got to ask is, “How do we make this sane and rational such that I can come in on a particular day and know that when I’m working in this area, here’s where I go find that work?”

For most organizations, the primary means of managing work, how we manage our day are these things called tasks. Follow up with this, do this, do that, etc. Again, those of you who follow my blog know that I’m absolutely adamant that task-based work is about the most inefficient way to manage stuff because first and foremost, you have this concept of relative prioritization. You can assign tasks to different parties but when we go into our task list, we tend to pick and choose what we want.

The second is the question of “it’s non-time bound.” So, one of the biggest issues for tasks is, when do we do them? When we sit down and have time. So if our days are consumed with calls and meetings, etc, the time allowed for a task list is always going to be small, and if all of these activities live in our task list, then the chances are we’re going to focus on our late stage opportunities, to close the money. The chances are even greater that we’re going to neglect what is in our long term interest.

So the system I’ve come up with really relates to the fact that our relationship with our clients, our customers, our prospects, whatever, really does follow through a life cycle of our relationship. It’s not a static relationship. You just think sort of high level and go into the details that people start as prospects. We may engage with them. They may go away. They may tell us they’re not interested. They may come back. They may purchase. They may renew. They may want to upsell.

But you can kind of get a sense of this life cycle concept that people and companies come into our lives, and it follows a very natural flow. So I will give you the structure, kind of called the database scheme, if you will, that I use to manage this, and then I will provide a link down here to some articles in a document that shows you how I actually use this in Salesforce.

So let’s think about stuff from a data perspective. All of our customers, all of our prospects, everybody represents a contact, an account; represents data to us. So on some level, somewhere in the organization, we have this repository of all my customers and prospects.

Frankly that’s how most people (that’s the limit of how most people) use CRM is they have a repository, a contact manager, and then I use tasks to decide who I talk to next, but I think we can do better. So let’s just walk this through from a life cycle standpoint.

As I come in on maybe day one of my new year and I sort of think about what should I be doing, I’m starting with a clean slate. I want to take this to the physical world even though we’re talking about a database. We’re talking about Salesforce.com as a CRM.

Let’s imagine that we’re going to work from a series of folders. One of the folders that I’m going to do is basically all my future potential that I’ve identified. I can’t call everybody in my database. I can’t focus on anybody. There are some people I don’t want to, but I need to identify a grouping of companies that represent my future potential.

This could be from inbound leads. This could be from referrals. This could be from a tradeshow. It could even be from a cold list. It doesn’t really matter but I want to make sure that I can organize and know that certain folks are ones that I’m going to need to get after someday.

But at the same time, I walk into sales organizations frequently, and I see that the amount of prospects that a sales rep is tracking is far more than they can ever manage. I see 400, 500 accounts in a salesperson’s bucket or in a salesperson’s account ownership. Well, how are you supposed to sort through those and determine what you should really be doing and who you should be focused on?

First and foremost, I will say that for most salespeople, we want to limit the number of folks that we really are targeting within a period to 50 to 100 accounts. Now take this with a grain of salt. This is absolutely going to depend on the industry you’re in, on the average selling price that you have, how much inbound traffic you get, etc., but bottom line is you want to have a finite number that you believe you can manage, that you believe is going to meet your needs for a particular month, for a particular quarter, whatever it is.

But keep in mind; this is all of our future potential for a given period. The challenge is, “How do I go about pursuing those folks in a way that I can get in the door and start to generate some opportunity?” This is our TOFU, top, top TOFU bucket.

So I need to distinguish further my schema here. I have to have all my future potential, and then I need another category that I can refer to as active prospects, people that I actually intend to and have the bandwidth to start to reach out to. Ultimately selling, prospecting, as I say, is about converting from an interruption to a planned-for conversation, the scheduled conversation.

So prospecting is a very simple and straightforward activity as you heard me talk about. It’s a very critical activity in terms of number two over here. But I only have a limited amount of bandwidth on a given day. I mean how many outbound phone calls can we make in a day? How many emails can we send? Maybe the number is 100, maybe it’s 20, but the point remains that I need to focus on the number of prospects that I’m going to be calling on at a given moment of time.

Again, this is going to depend on size of deals you go after, the kinds of companies you pursue. It will definitely depend on the number of buying roles that are typically involved in the decision. If you’re tracking three, four, five constituents at a particular company, well, that’s going to affect the number of prospects. What I generally say is you want to make your active prospect list the folks that you can reasonably expect to call today.

I really mean call today if the rest of this framework plays itself out (I think you will see what I mean), but prospecting is something we need to do every day. If I call you today, and then I can’t get around to my second call for two weeks and I call you three weeks later, regardless of lead source, that’s not an effective prospecting methodology.

Prospecting is predicated on consistent, focused effort. It’s better to concentrate that effort on a narrow set of prospects than spread that out over many, many prospects. One of the not best practices that I see quite often is companies will have very rigid requirements about lead response or follow-up, meaning “I expect my people to call or follow up in a lead that shows up within 24 hours.”

Well, that may represent a problem simply from capacity. What do you do when your lead volume is greater than number of calls you can make in a day and still hit the persistence criteria? How many number of dials do you want to make on a particular prospect? So lots to think about there, but generally speaking, these are going to move in this order here, and I can keep my big database here.

I’ve got track of my future potential in another folder but I want a very dedicated folder called “future prospects.” Well, as you heard me say lots and lots of times, the goal with prospecting is to convert an interruption, a cold call, to a planned-for conversation. So the most important folder, and I will also say the most useful folder, in my arsenal is going to be those prospects that are (can you guess what it is?) on my calendar.

If you are on my calendar (and this is where I think the simplicity of the system really works), if you are on my calendar, then I really don’t have to worry about creating a task to follow up. I really don’t have to worry about what I’m going to do next. I’ve said a lot that selling is about interactions between two human beings and my goal was always to drive conversations to a place in my calendar more than anything because I don’t have to think about what’s next, and I can move that account to my “on my calendar” folder.

If you’re sitting around “on my calendar” folder, we have a conversation, and I schedule the next conversation, where do you go? Well, you stay here, and the question of course is, “Well, how many folks should be in my ‘on my calendar’ folder?” and the beauty of the answer is as many as you want because your time is your most precious asset. It’s your most challenging thing to manage, and if you’re on my calendar, then I know I have a place for you and I never worry about what I’m going to do next. So this to me is where things really get interesting here on my calendar.

Now, all that obviously makes sense and any one of these categories can live in the online calendar world. So that’s really good, but what happens if something goes awry, if you will, on the journey from my future potential to active prospects on my calendar? In the process of active prospecting, I might learn some things.

One thing I might find out is that this particular prospect that I thought was future potential is not around anymore. Maybe the company is gone. Maybe they were merged or acquired. Maybe something worse. We call this category – sounds a little morbid – but “Dead.” We call it Dead, and this is one of those sort of final resting places, if you will, meaning if an account is marked Dead, I never need to go back to it again. In fact, if I have somebody else come in or I find a duplicate, I can match it against somebody that is Dead and know that that’s not worth even putting through my process.

Funny story a little while back, worked with a company that sold to financial planners, independent financial planners, so these were individuals who managed people’s money and help you with your retirement and all that good stuff. Well, the typical financial planner, as you might imagine, is not a young buck or what have you, fairly senior in experience and age, etc. We actually came across lots of circumstances where we call on the prospect, the financial planner, to find out that they were in fact really dead, as in deceased.

So one of the things we will talk about is the need for reason codes associated with these particular values. So if we move an account to Dead, we want to understand why we put it there.

So what else? If I’m talking to a prospect and I get into a conversation, I might determine that this particular prospect is not for me. Notice I’m not saying “not interested in me,” but somebody that I don’t want to sell to. It could be they’re out of my service market. It could be they’re a competitor and that would be a bad fit. It could be that perhaps they’re too small. Maybe they don’t fit my profile of my ideal client and I want to reject them.

So, I want to have a folder that allows me to take prospects that I don’t think are a good fit for me. Again, notice I’m not saying that it’s something that they don’t want to do. It’s something I don’t want to do, and I might say I want to find a place for those.

So those are pretty dramatic. What else can happen? Well, I will tell you one of the most common things that happens when we are prospecting, this should be pretty obvious, is that for whatever reason, either we can’t get a hold of them in a meaningful amount of time or I’m just going to call this in a big category, “they’re not interested” for whatever reason. It could be timing. It could be where they are in their budget cycle. It could be a million of reasons. It could be the fact that I just couldn’t get through.

There are lots of other reason codes here but this is going to be the majority, if you will, of your prospecting effort. Folks that we haven’t determined aren’t for me are definitely not Dead, aren’t willing to schedule my calendar, but another way to think about this is simply “not now.” So not interested or not now would be another good way to think about that. This is going to be the majority of what you’re dealing with out there, so pretty decent life cycle.

Well, what happens on the calendar if – I don’t know – let’s say something good happens, like we get a conversation and we are able to enter into the discovery process. Well, that’s what we want. We want the concept of advancing to the next step, and they’re going to stay here when we create an opportunity for them.

However, what I see oftentimes with salespeople is we advance in the sales process. We create an opportunity. We’re working them. We maybe do a demo. We deliver a proposal, and we’re actively working that prospect but we don’t get them scheduled.

This could look like a lot of things. It could look like “Hey, just call us back next week. We need two weeks to think about it.” They’re not willing to be in your calendar. Well, I will tell you, this is not where you want to be. This is a bad place, a bad folder but I still need to keep track of it because it happens.

Fundamentally, my goal is get them back to schedule. But if I can put my prospects in a folder that says, “Oh, this is somebody in the sales process but just wouldn’t agree to schedule,” or “I forgot to schedule the next meeting,” then I’ve got a place to go and find that and pull it out of that dumpster, if you will.

So pretty good framework hopefully that makes sense. Ultimately if we get to the place where they’re not interested or not now, we’ve got other options. We can follow up. This is also the land of, let’s say, marketing. This is where we nurture prospects to bring them back into the sales process. We want to revisit them. So this is a viable and valuable conduit to our brethren marketing.

But ultimately if we keep focusing our calendar to the point where either we generate revenue or we have closed-lost. (Probably writing off the page here. No, I’m good still.) One of those two, then what happens? Well, guess what? It all starts over.

If I’ve taken somebody through the sales process regardless of whether they have been closed-won or closed-lost, whether they’re a customer or not, it all goes back into here. Ultimately, we’re going to use the concept of “not now” or “for later.” We call this the “Recycle” process and they come through.

So what I hope you’re seeing (and again, this is a complex conversation), this is a different way of thinking about how we manage our work. Just simply setting aside the fact that we have different kinds of work that we do and it’s pretty important to understand both what zone we’re working in and also how we can manage different kinds of work in different volumes across a lot of different paradigms.

Maybe interesting, maybe not, but I will tell you, in my world, the labels that I use and how we talked about this in Salesforce, I actually use the rating function of Salesforce to do some customization and you can read about this in the article. I refer to this category as “On Deck.” I refer to this category as “Pursuit.” These are my labels. I refer to this category as “Dead,” this category as “Disqualified,” and this is the “Recycle” that we were talking about over here. Talk about this category as “Scheduled.”

So if you think about every account having a label assigned to it that says everybody that we deal with is going to be one of these one, two, three, four, five, six categories, and they’re going to move through that seamlessly. They’re going to move from Recycle back to On Deck. They move from Recycle to Dead, if that’s something that happens or Disqualified or from Scheduled to Recycle or from Scheduled back to Pursuit if a meeting is missed.

It becomes a very fluid environment and hopefully closing the bow on this. As we come in the morning, come in the week, come in the month, what have you, to pursue our various works, every one of these phases, we simply can go into our Salesforce or CRM, if you will, and in that particular work category, prioritize how we’re going to go after it. Try to move them to Scheduled. If I can’t, make sure that I’m pursuing them to get the scheduled conversation or moving them to “let’s talk later.”

So I hope this has been helpful. I’m sure I will get a lot of questions on this. There will be an article below that you can click to. It’s called Triple Your Prospecting Output, and it really goes into this concept in more details, but I hope this helps you get your head around what’s really a challenging task for salespeople and that is managing ultimately the workflow across many kinds of work and serving our clients and prospects throughout a very complicated life cycle.

Thanks a bunch for watching, and we will catch you next time on Whiteboard Wednesday.

By Townsend Wardlaw

Featured photo credit: Two White Chickens