The need for two (or maybe three) pipelines is not well-recognized by either sales leaders or salespeople, especially those who target large prospective clients, opportunities that take a long time to create and win. When your strategy is built on winning giant clients who spend significant money and consider what you sell to be “strategic” in nature, you can experience huge fluctuations in results.
To ensure that you are winning deals every quarter, you need a second pipeline, one that contributes the revenue that buys you the time to pursue your dream clients. Think of it this way: your strategic pipeline includes the large, long-cycle, strategic clients you are pursuing for big paydays. The operational pipeline focuses on smaller, shorter-cycle clients that create significant, if not massive, revenue.
How Two Pipelines Provides Greater Accuracy
We tend to measure the time it takes us to win a deal by starting with the first meeting and ending with the day the client signs the contract. That’s not a terrible way to measure cycle time, but it isn’t quite accurate. Allow me to explain why another measurement provides a more accurate picture and demands a second pipeline.
A larger and more strategic target client is certain to have a partner who already provides them with what you sell. That means they have a contract in place, as well as deep partner relationships, some built over years, that have survived the challenges of executing many tasks for the client. Many of these prospective clients may not even consider changing partners for months or years, so both opportunity creation and opportunity capture will take significant time. We call this approach Year Zero, the idea that the opportunity may not present itself until Year One or Year Two, or even Year Three.
Here’s my point: you delude yourself when measuring sales cycle time if you remove the year—or years—you spent getting to the first meeting. One reason sales leaders and salespeople struggle to create consistent revenue growth is that the biggest opportunities in their pipeline have long cycles, ones often subject to fits and starts.
Slaying Dragons and the Second Pipeline
The best thing about pursuing very large prospective clients is that you can be certain that they care about what you sell (as evidenced by what they spend with your competitor) and that their investment is strategic enough that it’s critical to have the right partner. The significance of winning these “dream clients” cannot be understated. That’s exactly why your strategic pipeline needs the protection of your second, operational pipeline.
Why would you ever want to win a $100,000 client when you could win a $2,500,000 client instead? You wouldn’t trade a 100K deal for a 2.5M deal. But you can easily do both, working on the long pursuit using a Year Zero approach while simultaneously pursuing smaller yet still important deals. The operational pipeline provides a steady number of new deals that generate revenue while you are pursuing gargantuan opportunities. You want to hit singles, doubles, and triples as you set up for a home run. Just be careful when you open your LinkedIn mail—you’re likely to get hit by a pitch.
How to Manage Two Pipelines
Not a lot happens from day to day or week to week when you are pursuing large clients. You might have an hour-long meeting with your contact, with an hour of preparation on the front end and another hour to follow up on whatever you promised them. The updates from a pipeline meeting will only take a few minutes, but as things heat up, you may need to spend more time working on your strategy and pursuing the opportunity.
One of the reasons sales organizations and salespeople have results that look like a sine wave is because they win a big client in one quarter, giving it all of their attention and focus, which creates a crater in the next quarter—the result of not working hard to create and pursue other opportunities. Revenue can look like a sine wave too, especially when the big deal you counted on winning disintegrates when your prospective client gets acquired by their largest competitor, the senior leader took another job, or the stakeholders decided to give your competitor a chance to turn things around.
Because large deals generally take more time, use the time between meetings to create and win smaller deals, but not too small. The operational pipeline moves faster, since the decisions to change are less complex and they don’t always require as much work to change partners. What you are trying to do is fill in the down part of your sine wave, especially if your income trends dangerously close to zero.
Long Deals and Short Deals
The management of long sales cycle deals and short cycle deals are different enough that they need different management. Too few large deals can harm your results, while too few medium-sized deals can find you with less revenue than you might need. The middle way is to pursue both large deals and not-so-large deals, pursuing the maximum revenue and removing the feast-or-famine pattern that comes from only pursuing large deals.