In Practice

Taming the Volatile Sales Cycle

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Every sales cycle has some degree of inherent volatility. A big customer could, for instance, go bankrupt or a major deal could fall through. But there’s one type of volatility that many executives seem to think is a kind of natural law: At the beginning of every quarter, sales tend to falter; at the end, they often surge. This roller coaster can be a huge problem when major deals fail to materialize at the end of the quarter, leaving a shortfall. According to the author, such kinks in the sales cycles can be smoothed out, but doing so requires a fundamental change in how sales activities are prioritized.

The typical sales process is like a funnel: At the bottom are the deals that are nearest to being closed; in the middle are other prospects in the works; and above are numerous promising leads. Companies typically work their funnels from the bottom up. After all, why not concentrate on the surest opportunities first and leave the less certain ones for last? But that prioritization strategy is the fundamental cause of the sales roller coaster. The author of this article argues that for a more continuous — and predictable — revenue stream, firms should prioritize the three areas of the funnel in the following way: bottom, above and then middle.

Robert B. Miller is cofounder of Miller Heiman Inc., a global sales consultancy, and coauthor of Strategic Selling: The Unique Sales Systems Proven Successful by America’s Best Companies (Warner, 1988). He can be reached at rbmiller@millerheiman.com.

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