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Could most of your sales pipeline end up down the drain?

PSP's Chris Wilson looks at the importance of having a rigorous deal qualification process as part of your consistent sales strategy.

Pipeline Qualification

If you take a realistic look at your sales pipeline it can be split into three distinct groups.

  • The first and by far the largest group will be what I call Category 3 opportunities, otherwise known as ‘no hopers’.

  • The next group are your speculative opportunities, only marginally better than ‘no hopers’, they make up your Category 2 leads and again will form a large part of your pipeline.

  • Those that represent a realistic prospect of resulting in a contract, are your Category 1 opportunities. Obviously, this is where you should focus most of your sales effort. The more opportunities categorised at this level the better chance you have of hitting your target.

Ongoing assessment of the data collected from your potential contracts in Category 1, together with an effective qualification process gives you a realistic percentage win-rate of the Total Contract Value (TCV) of each opportunity and an overall factored figure which you can compare to your target. Simply put, if your win-rate is 50% your TCV of Category 1's needs to be double your target. If there is a significant gap, then more work is needed in researching your opportunities and re-qualifying.

With Category 1 being the smallest but most likely percentage of your pipeline to deliver a return, you can see how important it is to sort the wheat from the chaff. You can only do this by implementing (and sticking to) a repeatable process of qualification. Any deal with a win probability below 20% is either a long shot or at a very early stage in the procurement cycle and needs further assessment.

By placing most of your effort into your Category 1 deals, and ensuring their collective factored values are in-line with your target you will consistently achieve success. Wasting time and effort in low probability Category 2/3 deals will lead to frustration, missed targets and lost revenue.

In summary, managing your pipeline has nothing to do with size and everything to do with qualification and how you monitor and react to the data you acquire from your potential clients.

If you need help to analyse the quality of your pipeline and how secure your category 1 deals give us a call. +44 (0)161 919 3099 Email

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