Pipelines, Pigs, and Pink Elephants

I’ve had the good fortune to get to know Gerhard Gschwandtner, founder and publisher of Selling Power Magazine. Although he’s best known for his magazine and the dozen sales-related book he’s written, he’s a renaissance man who has also published books on topics ranging from photography to meditation. In this month’s Selling Power Magazine editorial, he makes an excellent comparison between an oil pipeline and a sales pipeline. I thought I would share some of his thoughts with you...

There are interesting parallels between an oil pipeline and a sales pipeline. While an oil pipeline plays a critical part in the world economy, a sales pipeline is the most critical part of a company’s sales and profits. Every pipeline is subject to corrosion. A pipeline may spring a leak that can cause extensive damage. Similarly, sales pipelines show efficiency leaks over time.

The oil industry deploys an electronic tool, the Pipeline Inspection Gauge, or “pig,” that is sent down the pipeline to perform inspections. The early pigs were made from straw wrapped in wire. When the tool traveled down the pipe, it sounded like a pig squealing. When it comes to inspecting the sales pipeline, the loudest squealing often comes from salespeople who complain, “my leads are useless,” or from sales managers saying, “marketing doesn’t give us what we need,” or from the CFO saying, “we spend way too much money on marketing.”

I consult with a lot of companies that are struggling with sales and I have found that they all share something in common. Their sales and marketing efforts are at odds. Sometimes, they are even at war. The marketing team lectures the sales department, saying that if only sales would take their advice, its problems would be solved. Meanwhile, the sales department is clamoring for a silver bullet that will convince the most ardent skeptic to buy.

The ongoing conflict between sales and marketing is a “pink elephant” at many companies. No one wants to talk about it until the problem becomes so obvious that it must be discussed. For more on the synchronization of sales and marketing read The Synchronization of Engineering and Marketing with Sales.

Comments

[Gerhard Gschwandtner]

What many companies don't realize is that when they invest in a CRM solution, their pipeline does not automatically improve.
If the CRM industry were regulated by the FDA, the warning labels would read:
* May cause blurred vision of the sales pipeline
* May cause headaches over low user adoption
* May cause depression over lack of substantive data
* May cause crying spells over negative ROI
CRM implementation without a defined sales process and without user involvement and top executive sponsorship will only create more squealing.

[Colin Wilson]

Steve Martin has picked up on the single most important process in sales – pipeline management. It’s fundamental to the success of the organisation and it amazes me how little real attention is paid to it. Sure, as Gschwandtner points out you will find pipeline management as part of CRM, but he also quite rightly points out pipeline management as part of CRM does not work.

Pipeline management within CRM does not work because at best it only really creates visibility for the senior executive and his immediate sales team. CRM delivers marginal productivity gains to sales professionals. The sales professional invests his/her time, but receives “no takeaways” that raise their productivity. This is one way process flow when viewed from the desk of the salesperson. Thus, the salesperson supplies minimal data …..just enough data to keep their job. Do a deeper dive inside CRM you discover top sales professional maintains a “private/…for my eyes only” spreadsheet to do his/her job. The impact of this behavior: revenue forecasts are guesses, not reality.

Pipeline management is a political subject: because the professional salesperson is an “independent soul”. That is why he or she selected sales… they are passionate about their freedom to manage their resources. They are loyal, they are smart, they are applied, they are political… and they are independent. When you seek “inside” information, which they view as their domain, they resist. When you create a business model where disclosure is a core component of their duties, the salesperson complies with the “word”, but seldom the “spirit of the law”… because they view disclosure as compromising their “independence”.

If you want accurate information then pipeline management has to deliver the deepest value to the sales professional, with secondary benefit to the sales manager and sales executive management team.
Pipeline management is not some afterthought attached to the CRM module. It is not a list of opportunities with associated numbers that finance can manipulate to produce forecasts.

Pipeline management is what the wording suggests: “...facilitating an automated process that creates deep visibility into the sales process flows inside each opportunity, leading the sales professional to discover how they will make their quota, how to maximize their commission, leveraging the commission accelerators over a defined time horizon”.

CRM propagates the old way of pipeline management. There is a new way. It is based on personal pipeline management and rather than forecast sales, you forecast commission. Get to the heart of the matter and you will be amazed at the results.