Inventory Clearance B2B Style0

By Tibor Shanto – tibor.shanto@sellbetter.ca
Clearnce

This time of year is an interesting time for the retail trade.  As memories of the holiday season begin to fade and the last of the Boxing Day (week, month) sales come to a close, retailers begin another annual ritual, the “Inventory Clearance Sale”.  Makes sense, retailers want to clear old and non-selling inventory, freeing up cash, so they can reinvest it in more profitable inventory. In the process the can also open up shelf and storage space, again to make way for newer more salable goods; not so much out with the old in with the new, more like out with lower potential goods and in with better margin and turnover potential.

There are some lessons here for B2B sales people as well.  Consider your pipeline as your inventory of prospects and opportunities, add to that the notion of time representing your shelf space, both finite, both needing active management.  As such, applying the concept of inventory clearance could be very beneficial for B2B sellers.

When you look at your inventory of prospects, the reality is that no matter how much potential they had when you first decided to carry them, over time and as a result of a number of factors, the likelihood of that inventory turning over changes, usually diminishes, often to a point where they have a negative impact on your pipeline and success.  Prospects are similar, in as much that some will close, many more don’t.  Either way they need to be removed from the pipeline, or else you can’t bring in new inventory.

This is why sales people need to develop rules for purging their pipeline of bad prospects.  Sales people hang on to bad inventory, many look at their pipelines emotionally, the fuller they perceive their pipeline to be, the lesser the propensity to prospect for new opportunities, fresh inventory, confusing a lot of inventory with quality salable inventory.

Bringing shelf space into this in the form of time, you can begin to remove bad inventory before it hit “best by date”.  Prospects and opportunities time out, if 80% of your sales close in 75 days, what’s the point in keeping it in the pipeline on day 121; if 80% of the time you can complete the Discovery stage in 3 weeks, should you really continue the Discovery into its 10th week?

It is important to remember that these concepts also apply to your account base, not just prospects.  How many low margin accounts are using up resources that if applied to other accounts or new ones would make for better revenues, margins and all around customers.  Putting those accounts on the clearance list would allow you to achieve more, be happier, and probably have a better attitude towards new opportunities.

Clearing out bad inventory, be they clients or prospects, should be an ongoing process throughout the year, but even for where it is not year-round, doing it at least once a year, at the start of the year, can bring immediate and yearlong benefits.  So good ahead, develop your policies, and hold that “Inventory Clearance”

The Art of Sales Contest Winners!

Congratulations to:
Kristin Geenty and Alan Hart, they are the winners of the tickets to the Art Of Sales, in Toronto next Tuesday January 29.

Enjoy and profit!

What’s in Your Pipeline?
Tibor Shanto

 

 

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Are You A Sales Hoarder?114

A few weeks back I posted about how good sales people are prone to Attention deficit disorder (ADD), well it turns there is another popular condition that many sales professionals suffer in silence, namely hoarding.  While not a new, hoarding has come to the fore as a result of recent coverage on TV, and while sales people may look and see themselves as different, many are indeed hoarders.  You can see evidence of this in two important areas.

First, their pipelines; don’t get me wrong having a full pipeline is a good thing, but it needs to be full of the right things, opportunities, not clutter.  But some sales people are reluctant to get rid of any opportunities once in the pipeline, not matter how old, unreal, or how much mold it has on it.  It is almost like they are living a role in a Monty Python movie, every prospect is sacred, not to be removed.

Every sales person should have a mechanisms for cleaning (or in some cases flushing) out their pipelines, getting rid of deals that are not going to happen.  Specifically not going to happen now, meaning in the current cycle, or next.   Yes, many will happen in the future, six months, a year from now, but they don’t belong in the pipeline now.  You should nurture them somewhere other than where you are dealing with active, engaged buyers.

There two things you can use to gauge when it’s time to pull an opportunity from your pipe, first is the buyer’s engagement, are they actively engaged in the sales cycle, or dispassionate observers.  Are you able to consistently secure the “next step” you need; specific time bound actions they need to take to move matters forward.  Regardless of what they may say, are their actions supporting the lip service, because if they are not, than it just leaves the service part; no action = no interest = out of the pipe.  Time is the second factor, if something is taking longer than it should, it is likely not taking at all.  That applies to the sub-stages of the cycle as well, if it is taking you too long to gather the information you need to move the sale forward, take it out of the pipeline, and revisit it down the road.  Of course the challenge is that if you take an opportunity out, you have to prospect to replace it; I guess it is easier to live with the clutter than to prospect for new opportunities.

Set up guidelines for removing stale opportunities, leaving you to deal with only those that are viable.  Yes they may be fewer, but at least they are real and closable.  You may feel better with a fuller pipeline, but the clutter is just keeping you from seeing and realizing the real good stuff hidden by your hoarding.  One company I worked had relatively short cycle, 45 days, they had a rule that if an opportunity did not have a real next step for more than 14 days, it was removed from the pipeline.  This kept things focused, opportunities were qualified or disqualified, closing the former, revisiting the latter.

The second area where you see strong evidence of hoarding is in their approach to territories.  Sales people want to hold on to every account they can, and add as many as their eyes can see.  Even though the reality is that they can only cover so many effectively.  Time after time we see scenarios where the top 10 accounts in a rep’s territory accounts for up to 60% – 80% of their revenue base, if you look at the top 20, that number is even bigger.  Reps we survey often never get around to directly touching accounts beyond their top 30, leaving accounts 31 and above, lonely, abandoned, and ignored.  Well not quite alone, your competitor is likely calling on them when you are not.  So why not let someone else in your company cover them properly, and you focus on growing your top 30, OK stop sniffling, top 40.

But no, the hoarding class just wants to add more accounts and geography, as though it represents some form of wealth.  Company after company that take the smarter course, and shrink territories to create focus and growth, succeed; where as those who give in to the hoarders, don’t grow as well, have client satisfaction issues, and reps whom despite the size of their empire do not meet revenue or coverage targets.

Just like the hoarders on TV, sales hoarders are victims of their own actions, not wealthy collectors, just lost in a clutter of their own making.  Once their houses are de-cluttered, and they get the help they need, they live quite well with not so much less, but the right amount of belongings; or in the case of sales, the right pipeline.

What’s in Your Pipeline?
Tibor Shanto

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