BUILD INVESTOR CONFIDENCE IN YOUR SALES PIPELINE BY USING THE VIPS MODEL
VIPS, my favoured sales framework for start-ups, can also be used in another killer way -- to explain your sales pipeline to investors…
As I explained last time, VIPS is a great framework on which to build a sale through a process of meaningful conversation where you collaborate with your customer to design deployment of a shared VISION, identify ISSUES that may hinder that picture of success, design a PROTOTYPE that your customer is willing to support with some level of investment, and a SOLUTION rollout plan predetermined by the success of the pilot.
Photo by JOSHUA COLEMAN on Unsplash
But, as I mentioned, you can also use the same VIPS structure to explain a start-up’s sales pipeline to potential investors. Here’s the how to get your ducks in a row...
When discussing sales pipelines, it’s not unusual for entrepreneurs to enter what I refer to as the FRDF, or Founders’ Reality Distortion Field. This is where a founder stretches the reality of the pipeline to appear better than it often is. It’s easy to understand why, and they are by no means trying to hoodwink investors, it’s often as a result of inaccurate data from their sales team coupled with their natural optimism. But nonetheless, painting a picture that is more hopeful than the reality can impact investor relationships negatively, especially in the early stages.
Photo by JOSHUA COLEMAN on Unsplash
By breaking down the sales pipeline using the VIPS model, you’ll be able to show investors where you really are along the path of closing deals. Some prospects will have bought into your VISION of working together but need to be developed further to articulate a buying relationship. Some are working with you on identifying and eliminating ISSUES and show more progress through the sales funnel. Some are running tests in the form of PROTOTYPES, while others may be finalising and deploying the full SOLUTION with a clear deal delivery date.
By aligning your sales pipeline and investor discussions in this way, you are starting to do what it takes to build a culture of sales transparency. Only with that level of transparency can you can make informed decisions to resolve issues and change direction soon enough for it to make a difference. Using the VIPS model for pipeline management (as well as sales engagement) provides you with a level of visibility that will help you achieve your business success.
Please do let me know how you get on defining your sales pipeline this way.
Hat tip: Sir Ken Olisa
As mentioned last week, the VIPS model was taught to me by Sir Kenneth Olisa, OBE, who today heads up Restoration Partners, a strategic investment consultancy for start-ups.
