Sales Pipeline Management

Most business development teams operate some form of process to keep track of enquiries and conversion to business. One of the most important business development performance metrics is the sales pipeline. Many firms now operate a pipeline, or 'sales funnel', where target Clients feature at the top, becoming active sales leads that are converted into opportunities. These then become prospective Clients and some become new Clients. This tool acts as an effective driver and focus for the business development activities.

Sales Funnel

Figure 9.3 Sales Funnel

Figure 9.3 shows an example of a sales pipeline or 'funnel'. By recording and measuring the volume and value of potential Clients at each stage, it is possible to determine the operating ratios between the various levels. We can calculate the required number of target Clients from this information. For example, if our historic data shows that:

• we gain one new Client commitment, worth on average £30,000, for every three proposals or bids. Ratio 1:3;

• we need three prospects to achieve one proposal or bid. Ratio 1:3;

• we need five qualified leads to achieve one prospect. Ratio 1:5;

• we need seven enquiries to obtain one qualified lead. Ratio 1:7.

So, to calculate how many enquiries are required to achieve one new Client, we multiply 7x5x3x3 = 315, giving a pipeline target potential value of over £9 million (315 x £30,000). Over time we can aim to improve the individual ratios and thus the overall conversion rate. Pipeline ratios form useful key performance indicators for the BD team. It is considered good practice to monitor and report these on a monthly basis.

Adding Referrals to the Sales Pipeline

Once a sales funnel is accepted as the key metric for monitoring sales progress, it can be extended to include referrals from loyal Clients, as shown in Figure 9.4. This extension helps to remind the business development team of the value to the firm of having a steady stream of referral business.

Adding Testimonials to the Funnel

As stated earlier, loyal Client testimonials are often used to attract new Clients through the production of case studies or stories about how the firm solved a problem for the Client. By extending the funnel again, we can include and thus monitor the rate of conversion of loyal Clients to testimonials, as shown in Figure 9.5.

Sales Funnel Extended to Include Referrals

Figure 9.4 Sales Funnel Extended to Include Referrals

Funnel Extended to Include Testimonials

Figure 9.5 Funnel Extended to Include Testimonials

The Importance of Client Service Plans

The recent Client Care Survey research revealed that professional services firms have differing views on the number of Clients that they consider as 'Key', as shown in Table 9.2. Depending on a firm's size and resources, it is not possible for all Clients to have this strategic status. It is also interesting to note that only around 25 per cent of firms stated that all of their key Clients had a formal service plan as shown in Table 9.3.

Table 9.2 How Many Clients are Considered as Key?

Over 50 Clients

24.7% of respondents

41-50 Clients


31^10 Clients


21-30 Clients


1 1-20 Clients


1 —10 Clients




Source: Client Care Survey 2013.

Table 9.3 Proportion of Key Clients with a Formal Service Plan

All Clients have a formal service plan

24.2% of respondents

A majority


Around half


A minority







A large law firm had no formal strategic plan to leverage its alumni relationships. The head of business development believed that this represented an untapped opportunity to leverage its large, growing alumni base. Here is the BD report.

Executive Summary

We have an opportunity to add around £2m in annual fees by leveraging our growing alumni base. Responsibility for alumni development is required to organise a more formal approach to this potential revenue source.

A New Revenue Stream

The return on investment is expected to be relatively high as the target audience is already generally well-disposed towards our firm compared with prospects. It is clear that maintaining contact with alumni is not only an important part of goodwill towards previous employees but can also lead to a valuable revenue stream if carefully managed. If we converted just 5 per cent of potential relationships into fees this could amount to over £2 million per year based on current average fees per Client.

Stakeholder Review

It is recommended that key stakeholders convene to review the options regarding our alumni, whether partners or non-partners. Our database reveals that we have over 5,000 alumni, including over 500 ex-partners. Many are now heading the legal departments of large corporate entities. At present we have no national business strategy or programme regarding our alumni. Over the past few years a quarterly newsletter has been issued and sent to partner alumni. There have been a number of local relationship building events and dinners for non-partner alumni.

To improve alumni relations is likely to require assigned responsibilities and appropriate resourcing and budget if it is to progress towards developing a revenue stream. A focused effort is needed - returns are such that revenue from gaining one new Client will pay for the investment. It is suggested that the leveraging be led by marketing/BD with a steering group to prepare and implement the strategy nationally.

Possible Areas for Action

We have a dedicated space in our web site for alumni; this needs to be updated to encourage Client testimonials and referrals. There are some alumni databases held within regional offices that should feature on our CRM system.

We need to look at the various possibilities leading to a more formalised approach to alumni. In many professional services firms, alumni are managed as part of a business development effort. We have recently discovered untapped potential in Linkedln and have identified the locations of 2,000 alumni that are still in employment.

Business Development Needs Focus and Metrics to be Successful

Development explains how many firms have invested in a dedicated BD team to manage new Client opportunities and grow business with existing Clients. BD requires focus on selected targets, pursuit, and conversion to business. However, unless there is some form of performance measurement process in place, BD will not be effective enough to pay its way. The key indicators of performance come from the establishment of a sales development pipeline with appropriate tracking of all qualified opportunities. A successful BD team is one that regularly exceeds its targets and whose leadership constantly raise the bar to keep everyone on their toes. The team also retains and develops existing Clients as part of its remit. When BD and marketing teams work in harmony, they form one of the most powerful business growth resources in a firm. BD really stands for Client Development and when most effective stimulates a collaboration mind-set across the firm to seek out and work together to win new business opportunities.

Business Development


To what extent does your firm:

1. Have a dedicated business development (BD) team?

2. Set targets for Client acquisition?

3. Set targets for conversion of sales leads into business?

4. Appoint managers to oversee key Client relationships?

5. Create strategic service plans for key Clients?

6. Share its strategic service plans with Clients?

7. Leverage its alumni to gain new business opportunities?

8. Produce BD plans for each business area?

9. Use a sales pipeline to monitor and report BD progress?

10. Have a pipeline that includes targets for referrals and testimonials?

11. Have sales targets that are linked to the strategic business plans?

12. Reward BD performance?

13. Encourage BD to work with marketing to provide an integrated approach to market?

14. Have BD employees that are Client-facing?

15. Have an active referral network and strategy?

These questions also form the basis of the Development section of your Client Management Profile™, which can be found in Chapter 15.

Client Management Model™

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