Tracking the new business pipeline

When law firms install CRMs, many hope that they will be able to follow the example of professional sales organizations and track the “pipeline” of prospects who may some day become clients. 

The pipeline metaphor comes from the idea that relationships take time to build.  If you want business to consistently flow out of one end of the pipe, you need a steady stream of new prospects flowing into the other end. 

If the sales process is seen as a pipe, it’s a leaky one, since most prospects never buy.  As Mike Bosworth put it in Solution Selling:  “Sales always has been and always will be a numbers game—no matter how good you become, not everyone will buy from you.” 

When I first started selling, I had this quote up on my bulletin board to help me to accept the fact that to succeed at sales, I needed to be willing to fail, a consistent percentage of the time.  That’s why people say “sales is a numbers game.”  To close a small number of sales, you must follow up with a large number of prospects.

Some successful rainmakers are very good at keeping in touch with a large network of people.  I recently coached one partner who was in regular contact with more than 30 people.  But at our first meeting, she talked about being overwhelmed by the amount of time this took.  When we dug into the details, person by person, the problem became clear:  she was spending too much time with the wrong people. 

From a business point of view, the relative time you spend with people should be based on the likelihood of getting significant new work.  If you just go with the flow, you may do just the opposite, since the prospects who have the most time to chat are often the ones who are least busy and least able to give you new work.

This rainmaker addressed the problem by organizing all her top contacts into a table in Microsoft Word.  One column classified the marketing priority of each person as high, medium, or low, based on the amount of work they might have, and when.  Each week, she sorted the table so that she dealt with the high priority items first.  Many weeks, she did not get to the low priority people at all.  Which was fine.  That’s why they call them low priority.

Two things happened as she got more organized:  she consistently spent more time on the most promising deals, and she developed more new business, more quickly.  Now, almost a year later, she is still keeping the list up to date.

This may or may not be the best way for you to keep a list of prospects, because different people work in different ways.  Our LegalBizDev Success Kit includes eight different formats for tracking reports, and every one of them works for some lawyers, some of the time.

A few months ago, I started keeping my own pipeline list in Microsoft Excel, and I must say I am thrilled with the results.  Before that, I tracked all my To Dos in our CRM, and frankly I was having trouble keeping the big picture in mind.  My active followup list currently includes about 150 firms, and priorities change often.  I never have enough time to follow up with all the people I’d like to, so prioritizing is key. It really helps to have everything in a simple spreadsheet that can be printed on a page or two.  I still enter past history in the CRM, but I use the spreadsheet for future tasks.  If you want to try this, I’d recommend starting with just a few columns, such as: 

• Name (company or person or both)
• Priority category (I use one for clients that could buy something from LegalBizDev within 90 days, two and three for longer time frames, and four for people who think they will never buy from LegalBizDev.)
• Size - estimated legal budget or company revenue (since large clients are typically higher priority than small clients)
• Date of next planned contact
• Comments   

The great thing about having this in a spreadsheet is that it is so easy to use Excel’s Data/Sort menu choices to reorganize the list and look at the big picture in different ways.  For example, if there are ten people I would like to call today but I only have time for two, the priority and size columns make it easy to pick which two.

When we talked about using Excel vs. more sophisticated software at the Boston Roundtable on Legal Business Development there was a clear consensus for keeping things simple and using Excel.  One CMO maintains a very simple pipeline spreadsheet that includes the client name, the lawyers involved, a description of the opportunity, a summary of the action plan, and the date of the last contact.  Another keeps a spreadsheet that tracks the cost of every event and marketing expense, and ties it back to results and individual business plans.

One rarely goes wrong by keeping things simple.

Comments

[Kathleen P.]

I can see how this approach would also be useful for me in tracking my clients - the litigators in my firm - and their progress on their personal plans.