I was reviewing some strategies with a hotel partner earlier this week, and we were discussing their sales cycle and how it relates to the pipeline.  The owner asked me if the reason they weren’t closing any business this month was due to the sales team’s lack of skills or because clients just weren’t signing contracts this month.  I love having these types of transparent and candid conversations with owners, because I can completely relate as a business owner myself.  These are the questions that keep us up at night as sales leaders and business owners.  I encouraged the hotel owner to allow us to take a step back to review.

Here is how I guided the leadership team to review the challenge and level-set to get an understanding of the root cause of the weak sales pipeline:

1.  Answer: How much business is in the sales pipeline (number of opportunities & estimated revenue)?

2. Review when those opportunities were first entered into the sales pipeline (this can help you see a pattern of how long the decision process is for customers in your market).

3. Review where the opportunities came from (inbound leads or discovered by the sales team through proactive prospecting efforts).

4. Review what action has been taken on each of those opportunities (look for consistency, most recent, and if next steps are traced).

5. Rank the opportunities as A, B and C based on true potential per the information above

Here is what we found:

1. They had 33 opportunities (group guestroom business, we didn’t calculate F&B for this exercise) in the pipeline, with a revenue opportunity of a little more than $540K.

2. Only 5% of those opportunities were entered into the system within the past 15 days. 15% was entered into the pipeline 30-45 days ago.  The rest was entered outside of 45 days.

3. An astounding 100% of the leads came from a 3rd party inquiry. None of the business was found through proactive prospecting efforts.  None of the business in the current pipeline was from potential repeat customers.

4. In review of the actions taken on the pipeline opportunities, there was a drastic fall-off in contact with prospects after 2 attempts to review their proposals. (Remember, we are only reviewing the business that is still considered “in the pipeline” meaning, this business is still in play for the hotel to close.) However, after review of the activity we quickly realized that of the 33 opportunities, they only have a true line of sight to five of the proposals that were sent out because they haven’t engaged with the other prospects.

5. Two opportunities were tagged as an “A” opportunity and this equaled approximately $32,000 in potential guestroom revenue. Eight opportunities were tagged as “B” opportunities, and the remaining 23 were all listed as “C” or completely off the radar.

In a nutshell, here is what we reviewed with the sales leadership, to formulate a base line of understanding:

• The sales team needs a consistent sales pipeline. Relying on inbound business from 3rd party inquiries is hurting them, because many of those opportunities were not ideal fits.  33 leads remained in the pipeline, but they had responded to over 100 inquiries in just the past 30 days.   Also, only 5% of the leads that remained in the sales pipeline came in during December.  Had they implemented a proactive & consistent sales lead generation effort in January 2015, they likely would’ve discovered business with needs in December at some point in the year, and had runway to nurture those relationships, eliminate competition, etc. (It’s important to note that inquiries were down in December, as they are for this hotel every year.  My point is that a hotel that relies solely on inquiries will always struggle with peaks and valleys in their business.  We can’t create demand last-minute.  As a good mentor and friend of mine says, “we aren’t making instant coffee.”  )

• The sales team must focus on nurturing and loving past customers.  With zero business in the pipeline from past customers, it begs the question if the hotel has a strategy for reaching back out.
• The sales team is in “transaction mode” vs. “proactive mode.” Zero repeat customers in the pipeline + zero new business in the pipeline from proactive lead generation = a problem for the foreseeable future, unless they quickly establish & execute a proactive strategy.
• The area that would keep me up at night if I were on the leadership team for this hotel would be the team’s lack of follow-through on existing pipeline business. This is a red flag, that if not addressed will bleed into any positive affect that proactive lead generation could have on their revenue.  We know statistically that it takes 5-12 touch points with a new opportunity before business is consumed.  If the team is only making two attempts to connect and then stopping on business that is already at proposal stage, then we need to address proper tactics & strategies for follow-through.

When we conduct these reviews, it’s easy to get in the weeds and start completely dissecting too many areas which can muddy the waters.  I shared with the Owner, General Manager and Director of Sales that first things first, they can affect their future sales pipeline so they aren’t in this situation again by creating a proactive sales strategy.  Then, we can tackle other things like ideas for creative lead nurturing, incorporating social selling, creating automated systems for sales, increasing the sales conversion rates, etc.

Do you feel your hotel needs a thorough sales pipeline review?  Click Here to schedule a FREE 30 minute session where we can get started on tackling the root cause of your revenue challenges.

Amy Infante has been a hotel sales & marketing consultant for the past 15 years working with her clients to navigate the B2B buying process as it specifically relates to hotel sales team success. Amy developed GitGo from her passion to provide solutions for business leaders and hotel owners that are tailor made to find top line revenue.

Contact: Amyi@gitgogroup.com 312-636-7384