Overcoming Short-Term Thinking: Developing a Pipeline Mentality

Though faced with the realities of dramatic economic change, the reconfiguration of the business landscape, and globalization, U.S. companies continue to go down the wrong path. Former U.S. Treasury Department official Michael Jacobs calls it "business myopia."

It may be argued that "enhancing shareholder value" drives the myopic vision of publicly-traded companies, but "shareholder demand" is perhaps more accurate. In privately held companies, myopic thinking results from a desire to increase market share or simply beat last month's figures.

What's wrong with enhancing shareholder value and increasing sales? Both are valid ideas until short-term thinking kicks in; then a blindness to research, shoot-from-the-hip planning, and constant confusion lead to cutting prices to meet sales quotas, continual crises, and demoralized personnel. Short-term thinking reveals that no plan is the plan.

Short-term thinking is so accepted that it has become institutionalized. One popular business saying expresses the short-term view: "Every day, week, month and year, we have to do it all over again." It's as if every day begins again at square one. For example, veteran Life insurance agents get up in the morning and ask themselves the same question they've repeated every morning since they entered the business: "Who am I going to talk to today?" Each day is new, but should it really be considered a new beginning?

A Different view: A Pipeline Approach

Short-term thinking leads to long-term problems. It limits a company's reach, undermines its stability, and frustrates efficiency, while longer-term strategies produce the opposite results. If the goal is to ensure growth and perpetuation, a longer-term approach achieves the best results. And one of the best long-term approaches is the "pipeline mentality."

Picture the process this way: While you are taking care of all the new business flowing from the end of the pipeline, it is constantly filling with potential business. Business increases as more effort is put into creating customers (instead of committing time and resources to look for new business). Here are the elements of building a longer-term, pipeline strategy:

• Consider prospects customers in the making. Although it contradicts traditional sales strategies, prospects should not be looked on as potential sales because this distorts the selling process. Most salespeople are quick to say that they are solution-oriented and want to help customers, but their behavior betrays their words. It's not difficult to identify a salesperson whose only objective is to make the sale: Everything is aimed at achieving that goal. Prospects quickly sense the true mission and go on the defensive, either rejecting the salesperson or backing away from making a decision. It's far more effective to consider prospects customers in the making, whether they buy today or a year from now. The goal is to bring them into your orbit in such a way that they won't go elsewhere.
• Make a continuing commitment to prospect identification. It's easy to be confused and place making a sale ahead of creating a customer. The goal of prospecting should be to identify those who fit a company's customer profile. More difficult is to make prospect identification a continuing task. The life force of sales is a pipeline that's filled with prospective customers who have learned the value of doing business with you and who recognize that partnering with you is in their best interest. They should have discovered all this before becoming customers.
  
  Most prospect-identification efforts produce minimal results because of a lack of continuing commitment and constant attention. They are considered to be nothing more than a temporary activities, rather than the organization's life blood and the source of new business for years ahead.
• Implement tactics for cultivating prospects. It's the prospect-cultivation process that allows a company to penetrate the prospect's thinking. Customers set their own buying schedules, and they're not about to have their priorities changed to fit the needs of a salesperson. They don't want 10 telephone calls or voice-mail messages. They're not moved by attempts to arrange a meeting or by someone saying, "I'd like to get together with you to gather information." There's no time. When the prospect is ready to buy, the agents who come to mind get the order. Staying in front of these prospects regularly is the beginning of success.
• Segment prospects to focus on individual needs. We're in the age of the individual customer. Expectations increase daily. The customer expects everything to be individually customized. Boilerplate proposals are deadly, and general letters unacceptable. As Fleet Financial Group's Terrance Murray wrote in the company's 1996 Annual Report, "We are currently developing a state-of-the-art customer database, which will allow us to better understand each of our retail and corporate customers. This will enable us to match financial solutions with their specific needs and to offer more choices in how, when, and where they do business with us." This is long-term planning for capturing customers, not just an exercise to grab the next account or corporate loan.
• Be the resource for prospects. The most effective way to convince a customer to buy from you is to make yourself invaluable. What you sell may help a customer become more successful, but what you know solves customer problems. Some producers are reluctant to share their knowledge, fearing that prospects will take what they want and never bother to buy. While there's always a chance of this happening, it's worth it to demonstrate a company's expertise. The best way for prospects to become aligned with your company is to allow them to discover the depths of your experience and the extent of your knowledge. This is the added value that makes a significant difference.
• Find ways to help customers to be more successful. If the partnering concept has any value, it's in helping prospects and customers meet business challenges. Just selling them the right product or service isn't nearly enough to build a lasting bond. Almost any vendor can do that.
  
  Going beyond the expected is today's challenge. A supplier of bakery mixes and fillings discovered that its customers needed help in developing marketing strategies and tactics for retailing their products. At that point, management realized that superior, innovative products were not enough; their customers were looking to them for ways to sell more. Meeting this need led to selling more mixes and fillings.
• Demonstrate leadership. While caution is often prudent, it's leadership that captures the attention of prospects. Circuit City, for example, has pulled the plug on competitors because of its marketplace assertiveness. On a smaller scale, a Chinese restaurant opens in near-saturated Chinese food market and captures customers with an innovative approach: an open kitchen where customers can watch the food being prepared, and a dining atmosphere that seems different from the average Chinese restaurant. Customers sense something new, different and comfortable-and the leadership behind it.

A Results-Based Approach

Because results are what count, it's a waste of time to chase possible sales, follow up on less than serious prospects, and prepare dead-end proposals. Short-term tactics are unable to identify and penetrate the serious customers. What's required is a strategy that fills your customer pipeline with prospects who know and understand your company's capabilities. Nurture them and you'll enjoy a steady flow of new business.