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Defining Sales Leads And The Sales Pipeline

A sales process has many aspects and touches every area of the business but for this article I will isolate five areas of the sales process which, if executed properly, will result in a solid and predictable stream of revenue for the business.

The five areas of a sales process are:

• Sales Leads

• Sales Pipeline

• Pitches

• Closing

• Referrals

Sales Leads

We talk all the time about sales leads. But what do we mean? What is a sales lead? What is the definition of a sales lead?

Here's one I found on Wikipedia:

"A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process."

My summation would be, "finding people who may want to buy your product." I would further narrow it to, "finding people who may want to buy your product, may well need or want it and can, or soon will be able to, afford it."

Let's stop for a second because this is not the definition that most businesses use!

Most businesses think that the phone book, linkedIn, Facebook or a Networking event is a group of leads - they is not!

To develop a target list we need to ask hard questions:

Who is your ideal customer. If you cannot clearly identify what your ideal customers looks like then you will waste a lot of time! For some businesses this is rather straightforward and for others it can be a gut wrenching process.

For example, if you sell/rent cloth napkins then your customers will be found within the hospitality industry.

But let's drill down a bit more.

Not all businesses that serve food use cloth napkins and so we can eliminate fast food, economy style restaurants, hospitals and low-cost airlines. So, we have a smaller list.

Now we can drill down a bit more.

Are we in a margin position to both wholesale and sell to the trade? Do we provide a laundry service for restaurants that essentially rent their linen? Are we restricted geographically? Depending on the answers to these questions our business might focus on wholesalers and hospitality laundries across the UK or better restaurants and hotels within the M25 / Greater London area.

Let's drill down deeper.

Do we provide top quality white, all cotton napkins and tablecloths to five-star restaurants and hotels or themed linens in two hundred colours for the wedding market? Again, this further defines our targets.

Let's drill even deeper!

Are we top price / full service, middle of the road, or value focused? Again, this further defines our targets!

If we keep drilling we will eventually end up with several market segments that we can effectively market to with the knowledge that they are companies with whom our products and services are matched. In this case we move from selling nationally in dozens of channels to a focused, highly definable market.

So in the end we know that our market is 'four and five-star restaurants, hotels and clubs within 30 minutes drive of central London.'

All of this may take hours or days to complete for your business depending on the complexity but the process will clarify your entire business.

From this knowledge we can create a target list, a real list that we can begin to contact in a variety of ways.

As we contact each prospective lead we will qualify to determine if there is business potential. If there is then that contact becomes a lead.

The same can be done for every single business from luxury car rentals, to business consulting to home pizza delivery. It is easier for some businesses than others but until you do this you will waste enormous amounts of time talking to the wrong people.

If you are one of these networking addicts, who feel that it is worth the investment to speak to anybody I will tell you that, using Six Degrees of Separation, that 3.6 people may connect me to the Pope but I still can't get you an audience. Focus on your real market!

In the late 1990's Hertz car Rental made a discovery, which changed its entire way of marketing. Analyzing all car renters it realized that the average American rented a car very infrequently but that some business travelers were frequent renters (more than ten rentals a year). The frequent car renter was identified as being .002 percent of the population - that is 80 people in a football stadium of 40,000.

Hertz also understood that concentrating on the frequent renter resulting in a much more focused marketing campaign and the ability to deliver huge service incentives to those frequent renters. The result was higher customer loyal and profits. That's ROI

Knowing your target allows you to define your market, focus your efforts and lower your cost of sale.

The pipeline!

The Pipeline is the daily workings and management of all of your business opportunities.

It can be a simple as a binder with pages for each qualified lead or it can be a more sophisticated CRM system. There are lots of CRM (Customer Relationship Management) programs. Some simple ones like Capsule CRM are free for single users and allow you to track and manage the customer relationship.

The problem in most businesses is not that the product cannot be sold but that the salesperson gives up selling. A good, well-managed pipeline should eliminate that problem.

Let's go back to the case of selling/renting cloth napkins to five-star hotels.

Once we have identified a group of leads then these contacts should be entered into the CRM database. Here the pipeline management begins and the magic of CRM systems shows.

Sales guidelines must be determined for prospect management scheduling - how often prospects are contacted and by what methods. Each contact with the prospect is recorded and strategies developed and recorded. As the sales relationship are developed, prospects move down the pipeline until the sale is closed and the prospect becomes a customer.

Once a prospect does becomes a customer the relationship continues to be managed in the pipeline for the development of repeat business, referrals and customer satisfaction. Don't ignore your customer in favour of hunting new business!

The problem with pipeline management for most businesses is that it simply does not happen. If a system exists then salespeople are poorly trained and lack the discipline to use the system. The result is prospects are rarely contacted enough and at the right frequency to convert prospects to customers.

The pipeline is the lifeblood of the business. If managed properly the future volume of business is highly predictable.

The reason pipelines are rarely managed effectively is that the sales process is poorly devised and poorly understood. Sales Pipeline management is a medium to long-term process and most mediocre performers don't want to be bothered.

The best salespeople instinctively know that a strong sales territory is not just about closing the customers in front of them but planning three steps ahead.

About Author Wyn Davis :

Wyn Nathan Davis is MD of The Sales Experts a Professional Sales Recruitment, Sales Training and Sales Consulting company based in London, UK. We only focus on recruitment of Sales Professionals. <a href="" target="_blank"></a>

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Article Added on Monday, May 5, 2014
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