The Marketer's Handbook: Reassessing Marketing Techniques for Modern Business



PIPELINE MANAGEMENT

Application: Sales Planning and Management

Figure P.1: A representation of pipeline management

The Concept

This is a management concept and sales discipline that builds the generation of business into the day-to-day life of a sales team. Based on the concept of the “sales cycle” (the idea that there are progressive stages to the sale of an item) it ensures that there are enough opportunities at each stage to deliver enough sales. It is the foundation of good sales practice and the focus of sales management in many industries. Sometimes called the “sales funnel” and sometimes “the book of business”, it is a discipline that translates easily into most business environments, from simple product sales to complex business-to-business services.

The diagram illustrates the concept, which should be approached from a hard-headed, numerically driven perspective. For example, starting from the right hand side, if a sales person has a target of, say, $2 million, and the average value of their sales is $500,000, they need to win four a year. The next section of the pipeline shows that, in order to win four sales a year, they need to propose a bigger number of potential deals to customers. If, in their market place, the conversion ratio is two to one, ...