Why an empty sales pipeline costs you far more than lost revenue
I said to a client the other day, “All of these problems you have that you think are seperate, like, hating sales, thinking you are not good enough, crappy clients, wasting sales effort, not knowing your product, not being able to articulate your product, not knowing the market and your competition, wasting time on low-ball prospects, having to bend over backwards for clients, stress and anxiety about the future, being bad at negotiation, It may not seem obvious, but you can fix all these things by having more sales activity in your sales pipe.” I couldn’t really explain the gravity of that in the moment. Here goes.
Regular daily sales activity fixes most of the following. Clients wanting the earth. Clients not paying on time. Constantly chasing money. No time to do the work you’re actually good at. Working overtime. High anxiety and stress. Hating sales. Worrying about where next month’s revenue is coming from. Lying awake at night. Struggling with follow ups. Being underpaid. Putting up with bad clients. Work that isn’t in your wheelhouse. Poor negotiation. Putting up with bad staff. Declining culture. An empty bank account. A mountain of sales work with no sales to show for it. Not being good at sales.
Founder led sales and feast and famine
Let’s imagine you have a small business, and like most small business owners, sales falls on you. We call this, funnily enough, founder led sales.
Now let’s say, unusually, for some weird reason, you’re not the biggest fan of sales (sarcasm alert). So you do what you have to do, which means you get enough sales to get by. We call this feast and famine sales. You either have plenty of work and not enough staff, or too many staff and not enough work, which is a direct consequence of how much sales activity you did three months ago.
There are some very obvious problems with doing the minimum in sales. Sawtooth profit and loss. Task switching between sales and delivery. But the biggest killer, on the surface, is being average. Enough sales urgency to stop the business closing, not enough sales activity to grow and succeed. You’re doomed to mediocrity.
The face octopus
I’ve long explained a desperate salesperson as being like an octopus that grabs onto your face and starts spraying you with ink. It’s just repulsive.
When the pipeline is empty, every deal feels critical. In negotiation, when every deal feels critical, you reek of weakness.
There’s a reason that desperation is so visible to the other side of the table, and it’s not just instinct. Negotiation researchers Roger Fisher and William Ury built the idea of the BATNA, your best alternative to a negotiated agreement, into their classic work on negotiation. Their core finding was that your real power in any negotiation doesn’t come from money, charm or the strength of your pitch. It comes from how good your walk away option is. If you have other deals in play, you can hold your price and your terms. If this deal is the only thing standing between you and a bad month, you have no walk away option, and the buyer can feel the authority and power they have over you instinctively.
What desperation actually costs you
You take any shitty client who pays late, treats you badly, and knows they can demand more. You accept bad terms, discount, tolerate scope creep, or do things right outside your wheelhouse.
Sales takes time. It’s very rare that sales activity today turns into a client tomorrow. So you end up doing more sales work for lower reward, because the wolves are at the metaphorical door. You start to believe you’re bad at sales, which makes you hate it more. You get rejected, and it all falsely reinforces in your head that you’re bad at sales, which creates more rumination and avoidance.
The scientific version of “I’m bad at sales.” Most of the time, is not because you’re bad at sales, it’s because you’re bandwidth starved. A well documented reason this spiral is so hard to break out of on your own, was by behavioural economists Sendhil Mullainathan and Eldar Shafir, who spent years studying what happens to decision making under scarcity. Whether that’s scarcity of money, time or, in this case, deals. They found that scarcity doesn’t just create pressure, it taxes your actual cognitive bandwidth. It pulls your focus so tightly onto the immediate gap that you lose the mental capacity for longer term judgement. You genuinely get worse at the thing you’re worried about, not because you lack the skill, but because the anxiety itself is eating the bandwidth you’d normally use to do it well.
The nagging feeling that you should be selling gets louder. Less sleep, from worrying about upcoming work and being able to pay staff. Having to start the ball rolling constantly, going through a sales ramp up every time, because deals take time to mature. You take any shitty appointment you can get and waste time on tyre kickers. You get a false sense of relief when you make a sale. The reality is you’ve brought a bad deal home. Now there’s more work on your staff’s plate. Now you’ve got another difficult client to placate and meet their unreasonable demands. Now you’re doing more, paying more, and receiving scraps.
Not prospecting every day leads to an empty pipeline, which leads to urgency, which leads to desperation, which leads to bad decisions, which leads to bad clients and bad deals, which leads to poor margins, which leads to cash pressure, which leads to more urgency. Do you see the workflow now?
The real value of a pipeline isn’t the sales
As you develop a healthier sales pipeline, you get the ability to say no. People talk about financial freedom as one of the most empowering human achievements. Sure money fixes all problems, but internal strength comes from control over your story. An empty pipeline takes that ability away from you.
The biggest benefit of a sales pipeline is the sales. But an unseen close second is what having options does to the way you run the business. This is the same principle behind Fisher and Ury’s BATNA, just applied to your whole business instead of a single negotiation. A full pipeline is your walk away option, on every client, every deal, every renewal conversation.
When you have a healthy sales pipeline, you carry a quiet confidence that your prospective client can feel. A confident pitch, delivered without desperation, has a certain cadence and a distinct lack of neediness, and buyers are remarkably good at picking up on that, even when they couldn’t tell you exactly what they’re reacting to.
This is for founders and operators doing their own sales who recognise the feast and famine cycle in their own business, and want to understand why it’s happening, not just that it’s happening. If your pipeline is genuinely healthy and consistent, none of this will land the way it should, because you’ve already solved the underlying problem.
I often say a bad salesperson says, “look, it has all these amazing features, and it’s really great, and my friend swears by it, and it comes in thirty five colours, and yes we can customise it, and I’ll throw in these gifts, blah blah blah.”
A good salesperson says, “fuck you, you can’t have it.”
More of this kind of thinking lives at www.outsold.com.au/blogs.
The research behind this
The scarcity and bandwidth effects described above come from Sendhil Mullainathan and Eldar Shafir’s book Scarcity: Why Having Too Little Means So Much (2013), which found that scarcity of any resource, money, time or opportunity, narrows cognitive bandwidth and worsens decision making, independent of a person’s underlying skill or intelligence.
The BATNA concept comes from Roger Fisher and William Ury’s Getting to Yes (1981), which argued that a negotiator’s strongest source of power is the quality of their alternative if the current deal falls through, not their charisma, budget or pitch.
