Beyond Qualification: Sales Pipeline Last Steps

Recently, we’ve been doing a deep dive into the sales pipeline stages, discussing how to bring the sales opportunity to a close—whether that’s a win or loss—and to 100% completion. The pipeline being used is an example based on a real-life client of Engage Selling. Your pipeline should be customized for your business and sales process. What’s important is to remember that each stage should have solid, objective qualities and specific tasks that are required for an exit. For the first half of the pipeline, click here.

Stage 5: Evaluation

After an opportunity has been qualified and you have worked with the prospect to design a solution, many sellers will enter the evaluation phase. A simpler sales process might dictate jumping directly to a proposal, but more complex processes require the extra step of evaluation.

During the evaluation stage, the prospect is still comparing your solution to the competition. Sometimes, in fact, they are comparing your solution to the cost of doing nothing at all. Regardless, the prospect at this point should only be evaluating external solutions. If they are still considering an internal solution, move backwards in the pipeline and revisit the solution design phase.

Speaking of which, never listen to sales experts who say you “can’t move backwards in the process.” Sometimes new information, people or criteria are discovered, forcing sellers to take a step back, re-qualify and reassess our process. It’s OK. Movement forward or backward in the process is always better than stagnation.

During the evaluation, you know who your competitors are, and have an understanding of their strengths and weaknesses relative to your solution. Providing references, case studies and testimonials is common at this stage as the prospect seeks proof of concept or demonstration of capabilities, but at its heart, this stage is full engagement with the client as they evaluate their options.  

In order to exit the evaluation phase, you must meet the following qualifications:

  • Evaluation is complete.
  • A business case for moving forward is confirmed.
  • The client has agreed to pursue a solution.
  • You receive verbal confirmation of being short-listed if no proof of concept is being done.

Completion of the evaluation stage moves you to a 60% complete pipeline.

Stage 6: Proposal

Once the client has agreed to accept a proposal from you or has verbally confirmed that you’ve been short-listed and they are not solving their challenges solution internally, it’s time to move into this stage. While you should have discussed pricing and the solution in advance, save creating and submitting a proposal for the point at which the prospect has officially decided to consider your solution. The approval process is now underway and terms and pricing structure are understood by the prospect.

Once your proposal is submitted, you can officially forecast revenue. It’s at this point that the lead is fully qualified, and only fully qualified leads should be counted in the forecast. If you have your own historical data about the percentage of closed deals after this point, use that to create your forecast. If you’re looking for a baseline, typically one-third of proposed revenue is realized.

In order to exit the proposal stage, the following should happen:

  • You must be verbally told you are the winner.
  • Evaluation and trial are complete.
  • The implementation phase is being discussed.
  • Partner agreements are complete.
  • An action plan with firm timelines is agreed to.
  • A Letter of Understanding is sent to the client to confirm understanding and a draft proposal.
  • Target close date is refined.

At this point, you are 75% of the way through the pipeline and one-third of the revenue that goes out in a proposal is likely to be realized.

Stage 7: Negotiation

A proposal is often a starting point to the close of the sales process, and the next step, of course, is negotiation on the pricing. Legal departments on both sides will often be involved in the terms and conditions, and all individuals involved in the approval and signing stages are identified at this point. Negotiation indicates that things are moving along, but many deals fall apart during the negotiation if they sit too long without action.

It is essential to manage this stage ruthlessly. Avoid abdicating responsibility for negotiation to the legal team HR or your manager. Of course, those teams may have to be involved, but remember that longer the negotiation takes, the more at risk the opportunity is. Only you have the sense of urgency required to ensure the deal is moving along.

Towards the end of negotiation, you present the contract to the client, confirming the transaction path and required paperwork. The discussion of contract terms is the final piece of the negotiation stage.

In order to exit the negotiation phase:

  • The prospect must verbally accept the presented proposal and negotiated terms.
  • An outline of the implementation model is presented to the client.
  • You identify any possible roadblocks for implementation.
  • All prospect approvals are in place and anyone with the power to block the project has given it their blessing.
  • Negotiation is complete.
  • Pricing in Opportunity is reviewed.

Once you exit the negotiation stage, 90% of the sales pipeline is complete. At this point, you’ve won or you’ve lost, and your sale is about to close.

Stage 8: Closed

Once you’ve exited the negotiation phase, your opportunity is closed. If you’ve won the deal, you have a signed contract and can recognize revenue. If you’ve lost, the deal is moved out of your pipeline with a zero balance.

In order to exit this stage (and get your pipeline to 100%):

  • You must have a signed contract and purchase order.
  • Implementation has started.
  • The opportunity is closed as Closed-Won or closed lost and a reason is given.
  • For a successful opportunity the account status is set to “Customer.”

Over the course of three articles, we’ve reviewed how important it is to have an objective way to measure your pipeline and sales forecast, and demonstrated how to be objective in measuring progress in the sales process and accurately forecasting revenue. As we wrap up our series on the sales process, there are a few keys to remember:

  • The probability of a sales closing is not an objective measurement. Don’t use it.
  • Only provide proposals to fully qualified opportunities.
  • Proposals to closed have a 1:3 close rate.
  • Always use the end of a month as the close date in order to accurately predict revenue.

Using this proven method of objectively and systematically measuring progress through the sales pipeline provides you with tighter control and sharper vision over your revenue projections and your business. Visit our entire article series to gain a deeper understanding of how to revolutionize your sales process to work for you.