By Tibor Shanto – firstname.lastname@example.org
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!
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?