The Importance of Sales Pipeline Management
Sales Pipeline Management is one of those subjects where it is easy to gain a little knowledge, although perhaps a little harder to get to a true understanding of what it really means. In this article I explore the key components of Pipeline Management and just exactly why this is so critical to any business.
Sales Pipeline management is even more important where the business is focused on a renewable product, such as Insurance. If there is an annual opportunity for a prospect to buy from you, then there is also an annual opportunity for a competitor to win the business from you!
To start, let’s imagine we want to build a business from scratch.
What do we do?
We can ask around family, friends and former colleagues for any immediate leads. Great. Some may even turn to business straight away.
But what about those leads that don’t buy from us instantly? Do we put them in a diary to call back at a time in the future? Enter them onto a spread sheet or even the most fabulous CRM system in the world? Well, however we deal with this, the main issue will always be the same: Having the time and discipline to remember to contact them again when we said we would!
So let’s look at a process to handle this.
There are basically three phases to this.
1) Build a pipeline of prospects who satisfy the criteria that you are strategically aiming for e.g. vertical sector, size, claims history, relationship with the incumbent broker
2) Keep in touch with them at various scheduled times until they are ready to start seriously considering buying from you – an opportunity
3) Turn the opportunity into a sale
Looking at each in turn:
Phase 1
This is simply ensuring that you have the opportunity of talking to the right people! By ‘right people’ I mean anyone who has a need that you have a solution for.
As an example. If you are a insurance broker placing commercial insurance for business, then you might be running a specialist scheme. You may be targeting affinity group members or you may be looking to the open market. In either case it is still best to narrow down your target market to the type of organisation and individual to whom you can provide a cost effective and sustainable service.
With your target market established, you must build and implement a strategy to reach your intended audience. Your aim, if not to make immediate sales, is to gain their permission for you to keep in contact with them until they are ready to buy.
Phase 2
OK, so now we know that almost everyone in the ‘pipeline’ is a potential client of yours and that keeping in touch with them will be a worthwhile activity.
It is also critical to build a relationship with your pipeline. Not doing so could see you being used as a mere price-comparison.
Insurance brokers often find that they do a lot of hard work for prospects, who in turn simply feed back the new price to their existing broker. The existing broker will match the price and most often keep the business (even if the prospect is getting a lower level of cover!).
Clearly it can be hard enough to secure business from a competitor as it is, so this Phase is about ensuring the prospect has a reason for wanting to buy from YOU.
So you need to differentiate yourself from the incumbent and the competition. For a business insurance product this should be done through service wherever possible. Win on price and you risk loosing on price at the next renewal.
So how do you provide a service to someone who is a customer of a competitor?
We believe this is about drip feeding your brand values and providing a better education to the prospect than the incumbent. It is not necessary to be critical of your competitors. It is much better to provide the quality yourselves and allow the prospect to see the ‘value’ they can get from changing arrangers.
Is this expensive? Are you thinking you cannot afford to educate the market?
We prefer to ask the question ‘can you afford NOT to educate your prospects?’ After all, someone will be … and probably to your own existing clients as well!
By keeping in touch with your prospects via primarily electronic means, the per capita cost can be kept at a very reasonable level and we can help ‘step up’ the activity when there is interest expressed by the prospect.
Of course this whole process needs to be systematised i.e. there is a consistent process that you follow for getting messages to your prospect base and to knowing when they have more than a ‘passing interest’ in you.
If these messages are not getting enough ‘interest’ from your prospect base, they can be tweaked until they do. A classic case of ‘Test and Measure’.
By managing this pipeline effectively, opportunities will drop out and very strongly qualified appointments can be set up.
Phase 3
Getting the opportunity is one thing. Converting it to business quite another.
At least by having ‘drip fed’ information relating to your service quality and abilities to provide the appropriate solution for your individual client, the prospect will feel close to being one of your clients by the time they sit in front of you for the first time.
If you have shared your processes with them e.g. documentation needs, site visit strategy, all prior to the initial meeting, it really should be a question of the prospect being reassured that the service they PERCEIVE you will provide is actually the service they will get.
Of course, you do still need to get documentation from the prospect, to visit them to review their insurance and potentially broader Risk Management, to secure quotations and to present this back to the prospect. There will be many more steps to your systematised sales process as well. Quite simply if you do not keep metrics on what is happening in your sales pipeline, then those conversion rates may just not be as strong as you will not be able to tell where the opportunity is falling down!
If you do not know where it is going wrong, how do you set up an action plan to put it right?
You cannot manage what you cannot measure is the old mantra that remains as true today as ever.
So at Phase 3 it is a question of ensuring the steps in the sales process are understood and applied consistently and that as each step is reached, a next action date is agreed and followed up. Having the discipline to follow up when you say you will remains very critical at this Phase. If you feel that you are being let down by the Insurer’s service, this will change dramatically when they are more confident of your ability to convert the opportunities.
How will this whole programme impact on any Return on Investment? Click here to find more
Alternatively to discuss your thoughts, please call me, Malcolm Rose on 01293 880180 or email insurance@thekey2growth.co.uk