You have to really focus on various metrics that make up a pipeline of business. This can also be considered your Sales Cycle to some degree.
So many would prefer to just spend all their time chasing sales presentations or people that they can sell right there on the spot. To do that would be short sighted and produce a more average income.
Here is a Sales Cycle worth implementing. I call it a “Pipeline with a Purpose“. After the the overview, I give you what it takes for me to do $1 million in gross sales in the services side of my business. This is the overview:
- Prospects – All the people that have been exposed to you and your organization.
- Suspects – All the people that opt in to your database, connect with you through Social Media, and are referred to you in some way. This can still be a very general and generic group of people.
- Discovery – These people allow an interview process where questions are asked, ideas are presented, and there is an opportunity to agree that there is a basis for doing business together.
- Custom Proposal – When it is agreed on by all parties that there is a basis for doing business together we put together a custom proposal.
- Commitment – This is where some objection handling or selling may need to take place in order to get the Suspect to commit to moving forward.
- Collect – Even though people verbally commit or commit in writing, it means nothing until the money is collected and continues to be collected!
- Start of Fulfillment – Those first couple days and weeks are so important with a new client. Expectations are set, momentum is created, and credits are placed in the relationship bank. It is almost impossible to finish right when you start wrong.
- Completion of Collecting – Proactive explaining, billing, status reports and friendly reminders are paramount in collecting all money owed.
- Finish of Fulfillment – This can happen on every project sold and promised. This can happen at the end of every month of services completed.
This process and pipeline is not easy and is a constant work in progress. However it always helps to know what perfect looks like and what you should be working towards.
Regardless, understanding this pipeline helps business leaders and icons alike make really good decisions about where sales are weak, where the pipeline is leaking or breaking down, and where their focus needs to go. This awareness also presents opportunities for training for your team. Using this pipeline method you can more easily forecast future revenues and bandwidth needed inside your organization.
The Service side of my business looks like this…
- Maybe 1 out of 50 Prospects become Suspects
- About 1 out of 5 Suspects have a Discovery Meeting/Call with me or a team member.
- Roughly 2 out of 3 Discovery Calls end with an agreement that the next step should be a Custom Proposal
- Maybe 2 out of 3 Custom Proposals result in a Commitment
- 9 out of 10 Commitments result in the first Collected payment
- Everyone that pays starts Fulfillment
- In the last 6 months 4 out of 5 clients have completed all their payments
- In the last 6 months 2 out of 3 clients that have paid 100% fulfilled on services purchased which is largely due to clients not giving us everything we need to complete projects. (This is one of my primary focuses …Getting clients completely through the process. Interestingly enough regardless of whether clients complete 100% of what they have available to themselves 90% of the clients that made at least one payment to us would give us a raving review and testimonial, and have.)
Over the last 6 months most of my proposals have ranged from $10,000-$25,000 and my average payout was roughly $17,000.
So if I want to make $1,000,000 gross in my “Services” business I know some numbers I have to hit…
- I need 58 Fully Paid Clients over the course of the year
- If I’m going to get 58 paid clients, I have to get 73 people to Sign Up as clients
- If I need 73 people to sign up, I need 82 people need to Commit to a Custom Proposal
- Because I need 82 Commitments, I have to write 125 Custom Proposals
- If I’m going to get 125 custom proposals written, I need 189 Discovery Calls (16 a month or 4 a week)
- If I need 189 discovery calls, I have to have 945 Suspects (79 a month or 20 a week)
- In order to get 945 suspects, I need 47,250 Prospects (3,937 a month or 984 a week)
This is the same process I perfected while consulting Inc. 500 Infusionsoft, a software company that I helped take from 7 million to 14 million in 2008-2009.
I’ve been perfecting it even more over the past few years. I suppose I will always be looking to improve my understanding and implementation of my perfect pipeline process.
By also knowing the lifetime value of my client I know exactly what I can afford to invest in advertising, loyalty programs, gifts, and extra’s for potential clients and clients alike.
- What is our cost per lead in every marketing scenario?
- What is our cost per client acquisition in every selling scenario?
- What is our cost per client project completion in every fulfillment scenario?
Learn to estimate. Develop a habit of being dedicated to knowing and watching the numbers. This is a profitable Pipeline with a Purpose!