from CRM Magazine: 4 Tips for Managing Your Sales Pipeline


March 21, 2016

By Michelle Seger, Global Sales Strategy and Change Management Leader, SalesGlobe

I recently sat down with the leader of a large sales organization at a technology company. His problem was the sales pipeline—specifically, the lack of accurate information in there. Some reps ignored the pipeline; others sandbagged it, including only the deals that had already gone through. A few kept their own top-secret Excel sheet.

“How can we build a pipeline management process and train the sales organization to use it consistently?” he asked. “I need an accurate pipeline to be able to forecast financial information for the business. It’s critical.”

He’s not alone. In a recent SalesGlobe survey, the No. 1 challenge with sales pipeline processes is forecasting accuracy. Forecasting accuracy is the ultimate goal of the pipeline, and a lot of work must go into it. But often the sales organization doesn’t regularly (and honestly) update the pipeline, and here are some reasons why:

  • sales reps are not held accountable for entering and managing opportunities within their pipeline management software, to keep it up to date and accurate;
  • stages in the pipeline management software do not map to the actual sales processes, creating confusion and rendering both the stages and processes meaningless;
  • sales pipeline meetings are not focused on all of the opportunities in the pipeline—just on select pipeline stages;
  • pipeline information is reported and tracked in aggregate, so individual-level pipeline information is lost; and
  • automated workflows and critical documents and information are not being managed within the pipeline management software.

So how can we correct these common problems? Consider a few of these practices.

Use Rep- and Customer-Defined Stages

Clearly define pipeline stages by activities that include both an internal (sales rep) and a customer response. Both of these signals together are a more solid confirmation that an opportunity is ready to move to the next stage in the sales process. A customer response as validation of milestone completion provides the most accurate and objective results. For example, “Customer accepts proposal” can validate that a proposal milestone is complete.

Milestones should align with the sales process, but beware: Activities should not cause milestone overlap, so set clear boundaries to avoid confusion. Also, include some sort of oversight to ensure that your sales pipeline software continues to align with the actual sales process and the customer buying process. This will increase engagement from the sales organization.

Also, consider including automated workflows that are supported by “triggers” and “rules” that align with the sales process to drive engagement, kick-off key notifications, and provide system updates. For example, the price of an opportunity might trigger the engagement of the deal desk or pricing specialist; or the verification of a product shipment might automatically “close” an opportunity. Although this may not occur with each milestone, reminder alerts and automated sales responses can be put in place that support opportunity-update automation without requiring a sales rep to manually do it.

The most critical aspect of defining pipeline stages is that the sales process drives technology—not the other way around. Automated workflows and internal system updates should be incorporated after the process is proven. And, of course, all the activities the sales rep is asked to perform in your sales pipeline software should be easy to follow, easy to understand, and easy to execute.

Group Pipeline Milestones

Use the forecasting functionality to group milestones as an effective way to logically manage the weekly sales pipeline meetings and improve forecast accuracy.

We have identified key success factors in the sales process that have a direct impact on improving close rates and differentiating best-in-class companies from their competitors. The forecasting functionality in your sales pipeline software ties milestones into four forecast stages that are linked to the sales process:

  1. Building the value proposition
  2. Contract negotiations
  3. Verbal commitment
  4. Reviewing and acting on win/loss analysis

The value proposition is an undervalued and misunderstood concept in many sales organizations, and yet it holds the key to differentiating a company and clearly articulating to a customer why your solution is best. Best-in-class sales organizations will define the value proposition for its products and services and will continuously review and reinforce how the value proposition was positioned in significant win/loss situations as an ongoing learning experience for the sales team.

Another untapped area to improve sales, and the competency of the sales organization, is a weekly discussion of big wins and losses. Productive discussions around specific opportunities can be highlighted weekly, and actions can be identified to turn a loss into a potential win.

Downplay Probabilities

Don’t include probabilities as part of standard sales pipeline software functionality. They should exist as a guideline only, and not be discussed in sales pipeline meetings. In our research, 80 percent of companies do not use probabilities to drive the sales pipeline. Almost all of the respondents of the survey agree that probabilities have not been very valuable, and have created more confusion than clarity.

Instead of discussing probabilities, sales organizations are having rigorous conversations about pipeline milestones and the status of activities in their weekly meetings; both are better drivers of forecast realization and accuracy.

Hold Regular Pipeline Meetings

Companies with the most accurate reporting results and highest engagement with their pipeline management software have a rigorous schedule of sales meetings to discuss sales pipeline activity. In fact, according to our study, 90 percent of sales leaders say that weekly sales meetings are the main driver for executive reporting on sales forecast and status of business. These meetings directly impact executive forecast reviews.

These regular conversations identify red flags before they become larger problems (for example slippage or competitive challenges that may require escalation) and allow for timely issue resolution. These meetings should also include discussion about all opportunities in the sales pipeline, not just those believed to be the most promising or of the highest value (discussing in order of close dates is a good way to include all deals). The sales pipeline should be used as the meeting discussion tool and updated real time in the meeting, including action items and pipeline stage changes. Keep the focus of the meeting around opportunities in the pipeline and actions required to push an opportunity through the sales cycle, rather than on forecasts and probabilities.