Manage the Foreword Pipeline

On The Price Of Business With Kevin Price, Walter Rogers And Alex Shootman Compare The Crucial Differences Between Pipelines And Forecasting

[Kevin Price]:  Welcome back to the Price of Business.  I am your host Kevin Price talking to you about you and your business.  Let me tell you, it is your business to make sure you’re making the most of your sales team, making the most of your customer relationships, really leveraging your business towards growth.    That’s why we bring in Walter Rogers every week on Wednesday from Baker Communications as a contributor to talk about these important issues.  Welcome to today’s program.

[Walter Rogers]:  Hey Kevin.  Thanks for having me back.  I also have Alex Shootman with me from Eloqua on as a guest today.

[KP]:  Good to talk to you Alex.  Welcome to the program.

[Alex Shootman]:  Thanks Kevin, I appreciate it.

[KP]:  Great.  Tell us exactly what your company does as we get started.

[AS]:  Thanks Kevin.  Eloqua is a company that provides very powerful lead generation, nurturing and conversion tools that really connect marketing and sales teams and probably most importantly, give executives who focus on the front end of the business, on marketing and sales, give them visibility into all of the activities from when a customer is interested until we finally close business with a customer.  Having that kind of insight, we can help customer pretty dramatically grow revenue. 

[KP]:  Yeah, well I like that idea.   I think it’s probably very timely in light of our current economic environment

[AS]:  It’s interesting.  A lot of customers right now are trying to figure out how to grow revenue the most efficiently.  One of the things that Walter and I talk about, that he asked me to talk about today is just the difference between the sales executive forecasting your business or working on the pipline.  You know Kevin, I’ve managed sales for three public companies.  Eloqua is a pre-IPO company, so this is my first time with a private company.  In a public company there is tremendous pressure to deliver accurate forecasts.

[KP]:  Oh yeah, absolutely.  It’s the difference…The value of your stock obviously hangs in the balance. 

[AS]:  You can get crushed.  Even in a private company, you know, if you can forecast appropriately you can spend the right kind of money on the R & D investments that you need to make.  Because of all that pressure, we executives who focus on the front end of the business tend to just get augured in on the current forecast and we tend to neglect to think about the future.  It is so critical to actually manage the forward pipeline of your business, not just your current quarter forecast.

[KP]:  Walter Rogers why don’t you jump in with your thoughts on our guest today?

[WR]:  So, last week we talked about the importance of setting cadence and consistency and the sales manager’s role in driving cadence and consistency is the heartbeat really of a sales team.  How does that tie into today’s topic?  Well part of the cadence and consistency is delivering an accurate forecast up to management so they can make their appropriate purchasing decisions, spend decisions, forecast correctly to Wall Street, all those kinds of things.  But more often than not, there’s a disconnect between what a forecast is and what a pipeline is.  Those two things are substantially different.  A forecast is simply going to tell you what you’re going to hit now.  There’s no praise for hitting your forecast.  You hit your forecast?  You just did what you said you were going to do.  Doesn’t necessarily help you with the future because a forecast is typically about this month or this quarter.  Pipeline is all about forward visibility, really driving your business toward a specific outcome in the future.  Now I’m just going to talk about a few things here that are particularly interesting in relationship.  When you have a really strong pipeline, it enables you to worry less about other things.  Alex, I don’t want to steal your thunder so let me let you talk a little bit about what having a good forward pipeline can do for a sales team. 

[AS]:  Thanks Walter.  So, Louis Mayer once said in the 20s, when things were tough in Hollywood, he said there’s nothing wrong with Hollywood that a few good movies wouldn’t fix.  There’s a lot of challenges to running a field organization, but the one pill that solves a lot of things is the right pipeline.  Kevin, there’s three things you really need to think about in managing your forward pipeline.  You need to think about the size of it.  Is it big enough to generate the kind of growth you want in the company?  You need to think about the velocity of it.  Are we moving opportunities forward at the right speed so that we can convert them?  And you need to think about the shape of it.  The pipeline generally is bigger with earlier stage opportunities and smaller with later stage opportunities.  We clearly believe in separating looking at the pipeline from the forecast, coaching in the pipeline, coaching around those three topics.  What do you need to do to have the right size?  What do you need to do to have the right velocity?  What do you need to do to have the right shape of the pipeline? 

[WR]:  Alex, let me ask you.  In your experience in looking at, not just your own sales organization, I know you work with a lot of clients that leverage Eloqua technology, is there a predominance of the pipeline being a particular shape in any one place?  Is it normally too fat at the top or the middle or is it all over the map? 

[AS]:  One of the biggest challenges that marketing and sales has is if the CEO comes to the organization and says I want more revenue.  Marketing tends to say let’s get more leads.  The problem is it showers the sales organization with way too many leads that are unqualified.  The typical customer that we see has a challenge when they’re really  trying to grow revenue.  They’re forcing too many unqualified opportunities on the sales team.  It becomes a waste of sales talent, which tends to be pretty expensive.  Walter to answer your question, what we typically see is too much front end opportunity that’s too unqualified that really should use some kind of technology or automation to go through a qualification process so that your very expensive sales talent is just working on the opportunities that make the most sense for them to work on. 

[WR]:  Yeah, because I guess the downstream impact of having too fat of a pipeline on the front end and diverting your sales team’s attention onto things that are not qualified is an impact on those things that are qualified right?  So, it could actually lower your close rates, lower the speed at which they’re moving deals through the sales cycle and really impact the ability to drive revenue because there’s a distraction.  Is that basically what we’re saying?

[AS]:  Yes, I completely agree with you.

[KP]:  Yeah, and bottom line…I guess that’s the delicate balancing act that always very difficult in business today.  On the one hand there’s no greater engine to business growth than taking care of the clients that you have.  Walter, you’ve pointed out many times on this program that it’s much more costly to replace clients than to keep the clients that you have.  But at the same time, when you have a very strong growth pipeline going in, it’s really easy to become obsessed by that.

[AS]:  You know Kevin, you bring up something that to me is critical.  I tell the folks that I work with it’s really hard to think about the present and manage the future, but that’s what you get paid to do.  That’s what I think we as sales and marketing professionals are paid to do and we have to have the right tools to do it.  That’s execute the present, but be thinking about the future so that your next present is better than the current one. 

[WR]:  Alex, in terms of one of the techniques that clients can use to be very successful at separating this activity of forecasting vs. pipeline management, do you find that it’s best to have literally two separate meetings, one that’s a forecasting meeting and one that’s a pipeline meeting?  Do you have them days apart?  How do you manage that?

[AS]:  We do that, then we manage by exception.  I want to see stuff moving fast through the pipeline so most of the things I look at are…Show me what has not moved in the last sixty days.  I want to either take an action on that or I want to move it out and say okay, this isn’t an opportunity anymore.  Walter, a lot of things that you guys do with clients are tremendously important in terms of making sure that you understand what activities it takes to work with the client, how to know what portion of the sales stage you’re in, how to accurately reflect it.  At the end of the day, sales is not rocket surgery. 

There’re some activities we need to do.  If we do them the right way, and treat our clients the right way and solve a need, we’ll tend to sell things.  I’m a sales person.  Most sales people don’t like to do things in a structure fashion, but when we do, we’re successful.  We have two meetings.  You tend to coach more in the pipeline meeting and you tend to inspect more in the forecast meeting. 

[KP]:  I’m sorry I’ve got to interrupt gentlemen.  Walter, how do we get in touch with you and your guest today?

[WR]:  Well, you can reach me at Baker Communications at 713-627-7700.  713-627-7700.  Alex?

[AS]:  www.Eloqua.com.  Thank you Kevin for having me on.

[KP]:  You bet.  Also you can check out Baker Communications at BakerCommunications.com.  Great segment today, great opportunity to learn more about an excellent, really important information that can make a huge in you and your business.  Our very good friends at HoustonBusinessDaily.com, our sister website has tons of content from Walter Rogers.  Walter Rogers is in the process of clearly writing a book at the pace that he is moving.  Great to see the stuff that he has there.  Make sure that you go there and not only get excellent information about Walter’s business, but all the other great…and not his business so much as the content that he brings to every single news letter.  When you got to HoustonBusinessDaily.com, our sister website, make sure go ahead and subscribe to it so you can enjoy it on a regular basis, a weekly basis.  I am Kevin Price.  Stay tuned for more right here on the Price of Business on CNN650.