How to Build and Manage a Deal Pipeline
Pipeline management often separates the most successful brokers from the rest of the pack.
Brokers who create a system that consistently drives deals forward reliably outperform their peers.
Below, we cover how you can build and manage your deal pipeline to gain a strategic advantage over your competition.
Defining your dealmaking process
You can’t successfully implement pipeline management without defining your dealmaking process.
Start by segmenting the process into stages. This will allow you to get a better idea of how deals are progressing individually and as a whole.
Max Altschuler, VP of Marketing at Outreach and creator of B2B sales media company Sales Hacker, recommends taking the time to understand your client’s journey from the moment they first engage with your firm to a successfully closed deal to identify the right stages.
“A good sales process … aligns with your ideal buyer’s purchasing journey, instead of focusing on what the seller needs,” he explained.
It might help to think of the points in your client’s journey that create friction in your dealmaking process and create stages that represent overcoming that friction.
For example, when you get a prospect to listen to your pitch, you’ve overcome one source of friction. When the prospect is ready to see a proposal, you’ve overcome another source of friction.
By defining stages in this way — and tracking each deal’s progress through these stages — you’ll get a clear picture of your progress and what you need to do to move forward.
Here’s an example of pipeline stages we’ve seen many buyer reps use successfully:
- Escrow/Due Diligence
Let’s take a look at each stage individually.
While your dealmaking process may have several key differences (even if you specialize in buyer representation), this breakdown will help you understand the logic behind viewing your pipeline in stages and how to create a plan for overcoming common roadblocks.
When a deal is in the prospect stage, a potential client has indicated an interest in working with your firm. (While you might think of every contact in your database as a prospect, your pipeline should only represent active potential deals.)
When evaluating success in this stage, the main thing you want to see is quality volume.
The word quality in that statement is key.
If you increase volume in your pipeline without checking for quality, you’ll end up with two huge problems.
- You’ll get stretched too thin. There are only so many deals you can juggle at once. The more deals you add, the lower your win rate will drop.
- You’ll end up with an overinflated pipeline. This will make you think you’re on track to meet or exceed your goals, but when the pipeline eventually deflates, you’ll have little to show for it.
Jason Jordan, sales management expert, adviser, and best-selling author, noted that the most effective salespeople actually have smaller pipelines than their peers.
“The reason why [the] most productive sellers had smaller pipelines was that they were experts at disqualifying bad deals early in the sales cycle,” he said. “By eliminating those deals that they either didn’t want to win or knew they couldn’t win, they were free to pursue fewer, more desirable deals with greater attention and focus. In fact, the smaller pipeline of active opportunities enabled them to make 20% more prospecting calls, conduct 25% more meetings with prospects, and close 50% more deals.”
That being said, an unusually small number of deals in this stage can indicate an upcoming dip in revenue.
If you aren’t bringing enough new prospects into the pipeline on a regular basis, it may be time to increase the number of calls you’re making and emails you’re sending.
If you find you have a healthy volume of deals in this stage, but they aren’t progressing, the problem is often a lack of follow-up.
Try creating an action plan and follow-up reminders to ensure you’re touching base regularly and keeping your firm top of mind.
(Side note: Want to improve your prospecting process? Download the free guide.)
Once you’re at the proposal stage, you’ve got your prospect’s attention, but you still need to sell them on your value and overcome any objections they have.
If deals in this stage aren’t moving forward, you likely have one or both of two common problems:
- You aren’t developing a clear understanding of your prospects’ goals and expectations.
- You haven’t effectively positioned your firm as the best available option.
Focus on asking probing questions that uncover your prospects’ true wants and needs, as well as articulating your firm’s unique value.
You’ll also want to create a follow-up schedule so you can quickly identify and alleviate any concerns that pop up after prospects review the proposal.
Once you’re ready to create the listing, you’ve got your client fully on board.
In most industries this would be enough to seal the deal. Unfortunately, commercial real estate is not most industries — you’re just getting started.
If deals are stalling out in this stage, your clients might be getting impatient with the process.
Ensure you’re touching base regularly to let your clients know how everything is progressing.
We suggest creating activity reports that demonstrate the actions you’re taking on your client’s behalf to sell the property.
Another issue you can run into at this stage is not generating enough interest from buyers.
If this is the case, have your reps focus on marketing — sending out emails, as well as creating property teasers and websites that demonstrate the property’s value.
Once you’ve started receiving offers and letters of intent (LOIs), you’re close to the finish line.
You shouldn’t have too many deals that enter this stage without closing, but if you do, it’s likely due to one of these reasons:
- You didn’t set clear expectations early in the deal process.
- Deals break down during negotiation.
In both cases, reliable comp data can help.
With the right data in hand, you can let prospects know when their asking price is unrealistic and when they have a strong position during negotiations.
The closed stage represents the end of the line — you either landed or lost the deal.
Once you’ve reached this stage, take a look back at how the deal progressed and identify any areas for improvement.
It’s often easier to take a big-picture view of the deal once you’re no longer actively working it.
Create a plan for each stage
Remember, the entire point of pipeline management is to systematically drive deals forward.
Instead of approaching each roadblock as a one-off problem, identify common issues and develop a strategy to overcome them.
According to Geoffrey Walters, marketing and sales consultant, “Oftentimes, a sluggish pipeline is the result of a failure to clearly outline procedures … In order for everyone to perform their jobs effectively, they need guidelines.”
Once you’ve clearly defined the stages of your dealmaking process, write down a list of the obstacles you’re likely to encounter at each point and document a plan to overcome them.
Then, when you put your pipeline management plan into action, track the results to ensure the problems you predicted are accurate and the strategies to overcome them are effective.
If you see any discrepancies, you can make tweaks and alterations until you develop a proven process for closing more deals.