What does your pipeline look like? What percentage of your pipeline does your biggest account represent?
A few years ago I was in Sao Paulo, Brazil, doing a keynote on negotiations. During the break, a CEO of a small company that produces automobile parts approached me and complained about the purchasing agent of a major automobile manufacturer. He said the guy was ruthless, always squeezing him for more discounts to the point where he was not making any money. Sound familiar? The auto manufacturer represented 70 percent of this company’s business. That in itself is a red flag. One account should never represent more than 20 percent of your business, and that is still too high because if their terms are unfavorable or they leave, you are in deep trouble.
I asked the CEO what else he had in the pipeline, and he explained that the auto industry is fairly saturated, so not much else. I asked whether his machines could make parts for other industries, which he said he had never investigated. And with that question, I had identified the real source of the problem. It wasn’t the purchasing agent at the automaker; he was simply doing his job. The problem was the small business owner who did not have a full pipeline. Without a full pipeline, he was at the mercy of the hard-core negotiation tactics of the purchasing agent.
As a Sales and Leadership expert, I have seen time and again that a light pipeline is a stress builder. It creates an enormous amount of pressure to close every deal, even though some of those deals are not in your best interest. To make matters worse, your closing ratio decreases when you are stressed out because you are so focused on yourself and the need to close that you move away from the strategies necessary to help others achieve success. Customers can sense when it is all about you and when you are needy, and that doesn’t generate sales—unless of course they are taking advantage of the situation and squeezing you for unfavorable conditions.
How do you fix this so you can truly IMPACT others and succeed? By sticking with the basics. That means putting your needs aside and taking the time to find out where people need to go, the results they are after, and the gaps they have in getting there. It means listening to their answers and then presenting what you have in the context of what’s important to them—answering the concerns they have shared.
It also means understanding it will take a little time to get out of the mess you are in. But sticking to the basics is the best way to fill a pipeline, which will eventually turn your fortunes around. It will take less time to right the ship this way than acting under pressure, thinking about only yourself, and closing hard when it is not the right time or place.
A full pipeline is what you need to control your destiny, negotiate at ease, and IMPACT the world the best way you know how to. If you need help filling your pipeline, call me at 201.666.7599 for a free assessment.