As organizations grapple with financial hardships and uncertainty brought on by the pandemic, business leaders are left wondering how to move forward and find success. Is there an ability to grow? Building a sales pipeline in this context can seem daunting.
In the COVID-19 economy, it’s important for technology solution providers (TSPs) to evaluate the landscape and alter their formulas accordingly. By understanding customer needs more deeply, organizations can reframe their messaging to accommodate shrinking budgets and nervous customers to generate sales leads that produce revenue.
To start, we should define a pipeline. A pipeline refers to the set of opportunities that a sales team is working on with the intent to convert those opportunities to sales. And for the purposes of this article, we’ll tend to focus the pipeline challenge on new solutions (new products into existing customers or existing products into new customers). Keep in mind that the pipeline is built by both Sales and Marketing personnel. Depending on the business, one or the other may carry the lion’s share of that responsibility.
Your pipeline number is also a goal that you establish. It will be based on your company’s average ability to convert an opportunity to a sale (close rate). For example, if your close rate is 30%, you’ll need about three times your target revenue in your pipeline to achieve that goal. Put simply, to make $100,000 in new revenue, you’ll need a minimum of $300,000 in your pipeline and should back into your pipeline goal from your bookings goal. These figures will vary depending on the markets you serve, but this provides a good starting point. Incidentally, you may want to take a second look at your close rate, as it may have changed in the context of today’s business landscape. Note that in some cases, it may even have improved, depending on the nature of the solutions and services you provide.
Building a Sales Pipeline
There are any number of ways to optimize building pipeline, but it really comes down to five critical concepts.
1. Create great customer experiences.
It is extremely difficult to land new business without the ability to create delighted customers. Nurturing existing customer relationships to ensure they have a positive experience is critical in hard times. These experiences will either amplify or be a drag on your growth. Happy customers refer vendors they are working with to other potential clients. Happy customers also provide positive testimonials that can be leveraged as marketing tools to gain new customers (see point 5 below). Start capturing your company’s Net Promoter Score (NPS) – a management tool that is used to determine how satisfied your customers are with your partnership.
Of course, you will want to ensure that you are meeting your customer expectations as a baseline activity. But other ways to partner productively with your clients and turn them into superfans include offering to train their staff to optimize their existing investment – what is the untapped functionality in your offering which they purchased but are not using? If you are involved in a peer group, leverage your network to cross-pollinate ideas that you can share as best practices.
2. Know your best prospects.
As you explore the close rate of your company, as referenced earlier, try to identify and describe the customer segments that have the highest close rate. Maybe it has to do with size of customer, location, whether they have a data center or not, their particular vertical market, etc. This internal conversation will help you reveal your true strengths as an organization and what kinds of customers recognize those strengths. Essentially, you will be learning how to describe your ideal customer in somewhat objective terms. Focusing on your ideal customer will help you be efficient. It is easier and less expensive to build pipeline for market opportunities where the close rate is relatively high.
3. When your biggest competitor is the customer doing nothing.
In times of crisis, many companies tend to freeze everything – budgets, hiring, adding new vendors and more. Effective sales and marketing messaging can negate this ‘do nothing’ approach. Learn your customer’s business at a relatively deep level, so that you can show that there is pain in “standing pat.” What could they gain by onboarding your solution or service? Why would that investment be the smart, even conservative approach? As an example, small businesses are having to provide IT support to more virtual workers. So how is your services infrastructure, approach and management more efficient than if the customer tried to on-board the staff and infrastructure to do it on their own?
Create messaging that challenges the customer to question their assumption that doing nothing is the safe play. TSPs who really understand their customers, including the economics of running IT operations, will come out ahead.
4. Building pipeline is a process.
While some companies may choose to obtain customers solely through referrals, often due to a hesitancy to make the necessary investment in marketing, using marketing campaign-based techniques to acquire customers can produce greater results. Essentially, you will want to have a continual set of initiatives and actions in operation if you want to grow revenue in a predictable way. The whole process is dynamic, not static, and gets continually optimized. Ultimately, you will want to understand your mathematical model that defines your lead-to-close pipeline waterfall. Key milestones along the way will be: How big a prospect database you need, how many marketing activities are needed to generate leads/inquiries, how many leads will ultimately become opportunities that the sales team will accept and work, and how many opportunities get closed.
5. Use customer testimonials to win over prospects.
With an outstanding NPS score and having built raving fans, as noted in point 1, consider asking some of your best customers to participate in testimonial videos or written case studies that can then be used to convince prospective customers that you’re the right TSP for them. Your prospective new accounts will feel a great sense of reduction in risk where it is clear that other customers have achieved success.
As we continue to adapt to our new normal and understand how this changes the business landscape, it is important for TSPs not to give up on growth, and understand some of the critical underpinnings to building pipeline. The five steps listed above can help ensure you are still standing strong in the post-COVID world.
Scott Marshall is senior vice president of marketing and community for ConnectWise. He leads efforts to build brand awareness, cultivate prospect interest and facilitate customer engagement. His responsibilities include overseeing the company’s brand evolution, public relations, social media, multi-disciplinary marketing campaigns, web development and community interactions.
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