The Power of the Pipeline

"If you don't know where you're going, any road will get you there." ~Koran

      Pipelining salesperson's prospects allows them to know where they are going writing sales now or in the future. It is the indispensable sales management tool to meet or exceed sales projections. And this is the best time of year to do it!

      To effectively work pipelining, your sales staff must prioritize their prospects in a common denominator.

      A. Prospect: Ready, willing, and able ... will buy within 30 days.

      B. Prospect: Ready and willing. Ready and able. Willing and able ... will buy within 120 days.

      C. Prospect: Ready ... or willing ... or able ... will buy within 360 days.

      To measure what is in your salesperson's pipeline now, they must evaluate only the A's and B's. Taking a hard look at the value of every prospect - and rating them - is an eye opening exercise for some salespeople. It is a fact that even the most skilled professionals often are overly optimistic about the potential of a prospect. Following are the toughest areas to measure:

1.      Are the prospects truly ready? Today's 6-month Extended Buying Cycle influencing today's cautious prospects must be fathomed and an accurate fix established.

2.      Are they steadfastly willing? There are a myriad of factors that influence the willingness - layoffs, kids, taxes, media negativity, education, uncertainty.

3.      Are they genuinely able? A recent survey of loan officers reveals that credit worthiness across the U.S. is deteriorating precipitously.

      OK, your sales staff has given you the numbers. Let's see if they're realistic. Any salesperson who reports less than 5 A's or 10 B's is in serious trouble. That's the MPS (Minimum Performance Standard), and that's bare bones! What should the number be? In most price ranges and in most markets, the numbers should vary from 10 A prospects and 20 to 30 B prospects. Of course, as a marketer, you know that price of the homes, local economy, availability of product, traffic flow, quality of prospects, competition etc., will influence the outcome. The startling fact is that we have recently measured over 30 sales staffs coast to coast and over 60% of the sales persons reported less than 5 A's and 10 B's!

      What does this mean? Simply put, it is going to be a lean last quarter for some salespeople because the sales are not in the pipeline. Remember that the numbers reflect prospects that will buy anywhere. Couple this with the fact that buyers seldom commit the first time around, and you could have a crisis situation for some builders.

      Is there a solution? You bet! First as company principal or sales manager, do the pipeline exercise. Any salesperson at or below 5 A's or 10 B's must put on their prospecting and rehabbing hat immediately. To wit:

1.      They must prospect to garner referral sales, broker co-op sales, and radiated sales. Ask everyone the 7 words, "By the way, who do you know ... Who's looking for a new home ... whose lease is expiring?"

2.      They must rehab or re-interest the old ofttimes forgotten prospects in their files. Yes, there are some buyers with Buying Cycles over 6 months, and they must be rooted out with urgency to buy now!

      Performing the pipeline process once a month will provide the awareness you and your staff need to stay abreast of sales and keep the wolf from the door. Good luck and good pipelining.

Tom Richey was recently the recipient of the NAHB "Legend of Residential Marketing" Award. An industry icon, Tom has spent 40 years in the industry training the most successful sales managers and sales teams. See Tom's Profile for more information.