Most companies use a CRM to monitor the opportunities in their sales pipeline. Some of the metrics that we recommend sales managers consistently review with their salespeople include:

• Number of qualified leads
• Conversion rates for key sales process steps
• Close rates
• Average deal size
• Sales cycle length

Effective sales pipeline management involves setting specific times to review these key metrics with salespeople and coaching them for skill improvement. Ideally, a scorecard is established that allows a sales leader to track improvement as they review these metrics quarterly with their team. This discipline should not be overlooked and remains a key differentiator for highly successful coaches. If a sales manager does not know the quality of their pipeline, how can they help their people improve, and how can they forecast business for the company?

Assuming these metrics are available, here are some things to look out for in sales pipeline management sessions, with the end goal of improving pipeline quality and coaching the sales skills of your team.

Beware of Stuffed Pipelines

Having a “fat pipeline” can result from an overly optimistic advisor or relationship manager. They call on a prospect and come back thinking, “We really hit it off! They really liked what we can do... We have a LOT we can help them with.” Their deceptively full pipeline may give the salesperson comfort because it looks like they have plenty of opportunities, but in fact, it may be very misleading in terms of what will close. In other words, many of those deals in the pipeline are not properly qualified.

A sales leader plays a critical role in managing this problem with their coaching. The skill of asking great questions is essential. Tone and tonality are of paramount importance, and they must be firm and helpful. Questions like:

• What did you hear the customer say that leads you to believe they will be a great customer for us?
• When you asked them about the impact of not fixing this problem, what did they say?
• Who else in their organization will be impacted if they switch providers?
• What did they say when you asked about their decision-making criteria?
• When is the last time they chose a supplier that wasn’t the lowest cost?
• How much is in their budget to make this problem go away?
• When you asked them, “How do you envision working with us,” what was their response?
• How did they choose their current provider?

By asking great questions, sales managers coach their people by example. The questions listed above are the type of questions salespeople should be asking the prospect. Coaching sessions are similar to a sales call in nature. By asking great questions of their team, leaders find out where their people need to be coached. If they hear a salesperson say, “I didn’t ask that question” during their pipeline discussions, they need to find out if the salesperson is unable to ask those questions (they need more sales training) OR if they are unwilling to ask those questions.

During sales pipeline management sessions, as managers review and discuss the metrics, it becomes clear if the salesperson is prospecting enough and regularly finding opportunities. Sales managers will know if their team understands that prospecting is a consistent effort necessary for them to reach their sales goals. Coaches can guide them on how to consistently make calls, ask for introductions, and network among their target prospects.

It’s healthy to “flush” a pipeline regularly. Opportunities should move through or out of the pipeline continually. If a relationship manager wants to cling to an opportunity and defend keeping it in their pipeline, it is probably because they have nothing else to take its place. Coach them, encourage them, and challenge them.

Of course you have sales problems. If it’s not a production problem, it’s a productivity problem. If it’s not a productivity problem, it’s a servicing problem.

If It’s not a service problem, it’s a sales/sales support turnover problem.  But, how do you help ease the pain and start to fix things? 

In the words of Rosanne Rosannadana, “It’s  Always Something”

Most companies, if not all companies, have some method for keeping and tracking sales pipeline activity and progress. We use Hubspot’s CRM because it ties in very well with our inbound lead efforts, the pricing is extraordinary, the reporting is as good as anything on the market and getting up to speed is fast and easy. But, putting data in the CRM and keeping an eye on it, is not enough.

You have to gain business intelligence and then act on what you know.

Conduct an Emergency Pipeline Anaylsis (EPA) for a simple but effective way to determine what stays in the pipeline and what goes to the pipedream (delete folder). EPA originator, Dave Kurlan, wrote a blog that goes into detail about the 16,000+ proposals presented to unqualified buyers by B2B salespeople every day. This data comes from the 1,000s of Sale Evaluations and Improvement Analysis (SEIA) done yearly by our firm and others around the world.

In the SEIA, we analyze the state of the current pipeline. Figure 1 identifies the quality of the pipeline assessed for a large sales organization. When assessing for closable opportunities, the green area at the bottom should be much larger than the blue area at the top, if the opportunities are truly qualified. If your closable opportunities are not really qualified, you end up with a similar pipeline configuration to the one you see in the chart.

Figure 1

The process to get this information is simple, but effective: Create a number of qualifying questions that are based on the steps in your qualification checklist. Those questions may include but are not limited to:

• Is there severe mental anguish to make a purchase/change and is it personal?
• Did I attach value or monetize the problem or failure to leverage the opportunity?
• Did I eliminate the incumbent?
• Did I ask, “Is this a have to fix or want to fix problem”, and did the prospect say "have to fix"?
• Did they agree to invest the appropriate amount of time, money and resources?
• Due I have a date of execution, purchase, contract?
• I have met with the decision makers (not I will be meeting with decision makers at time of presentation) and they have agreed to make a decision when I finish my presentation.
• I rehearsed the prospect on what they will do when the incumbent returns to beg for the business, fix the problems and match our fees, structure, contract.

Answering/scoring these questions simply requires a 1 or a 0. You add up the scores vertically for the opportunities in your pipeline and then make a decision to either;

1. Call your prospect and deal with the open items.
2. Reconcile that you have asked these questions and didn’t get the right answers and therefore make the ‘go, no-go’ decision to present.

There is a world of difference between managing the pipeline and looking at the pipeline and reporting the results. Managing is an active process.  As a manager you must constantly and consistently evaluate the opportunities in the pipeline for:

• Quality – are they true opportunities?
• Quantity – the number and value volume must match each individuals success formula
• Movement – based on your buyers’ buying cycle you should be able to predict movement from one step in the process to the next
• Measure the conversion ratios from one step to the next to evaluate effectiveness of the sales person’s execution of the process
• Evaluate for credibility and validity
  • Credibility – did the projected close volume actually close?
  • Validity – did the accounts in the pipeline actually close and account for the volume forecast and actual sales?

This will take time but it’s important for you and your salespeople to do because it will ultimately result in closing more business, more quickly at higher margins.

Of course you have sales problems. If it’s not a production problem, it’s a productivity problem. If it’s not a productivity problem, it’s a servicing problem. If It’s not a service problem, it’s a sales/sales support turnover problem. In the words of Rosanne Rosannadana,“It’s  Always Something”

Conduct an Emergency Pipeline Anaylsis (EPA) for a simple but effective way to determine what stays in the pipeline and what goes to the pipedream (delete folder). EPA originator, Dave Kurlan, wrote a blog that goes into detail about the 16,000+ proposals presented to unqualified buyers by B2B salespeople every day. This data comes from the 1,000s of Sale Evaluations and Improvement Analysis (SEIA) done yearly by our firm and others around the world. In the SEIA we analyze the state of the current pipeline. Figure 1 identifies the quality of the pipeline assessed for a large sales organization. When assessing for closable opportunities the green area at the bottom should be much larger than the blue area at the top if the opportunities are truly qualified. If your closable opportunities are not really qualified you end up with a similar pipeline configuration to the one you see in the chart.

Figure 1

The process to get this information is simple but effective: Create a number of qualifying questions that are based on the steps in your qualification checklist. Those questions may include but are not limited to:

• Is there severe mental anguish to make a purchase/change and is it personal?
• Did I attach value or monetize the problem or failure to leverage the opportunity?
• Did I eliminate the incumbent?
• Did I ask, “Is this a have to fix or want to fix problem” and did the prospect say ‘have to fix’?
• Did they agree to invest the appropriate amount of time, money and resources?
• Due I have a date of execution, purchase, contract?
• I have met with the decision makers (not I will be meeting with decision makers at time of presentation) and they have agreed to make a decision when I finish my presentation.
• I rehearsed the prospect on what they will do when the incumbent returns to beg for the business, fix the problems and match our fees, structure, contract.

Answering/scoring these questions simply requires a 1 or a 0. You add up the scores vertically for the opportunities in your pipeline and then make a decision to either;

1. Call your prospect and deal with the open items
2. Reconcile that you have asked these questions and didn’t get the right answers and therefore make the ‘go, no-go’ decision to present.

There is a world of difference between managing the pipeline and looking at the pipeline and reporting the results. Managing is an active process. As a manager you must constantly and consistently evaluate the opportunities in the pipeline for:

• Quality – are they true opportunities
• Quantity – the number and value volume must match each individuals success formula
• Movement – based on your buyers’ buying cycle you should be able to predict movement from one step in the process to the next
• Measure the conversion ratios from one step to the next to evaluate effectiveness of the sales person’s execution of the process
• Evaluate for credibility and validity
  • Credibility – did the projected close volume actually close
  • Validity – did the accounts in the pipeline actually close and account for the volume forecast and actual sales

This will take time but it’s important for you and your salespeople to do because it will ultimately result in closing more business, more quickly at higher margins.

CALL TO ACTION

Set up a 1-on-1 coaching call with one of our Sales Development Experts to discuss how to effectively build and manage a credible and valid pipeline report, regardless of the CRM you are using.

EMAIL: traci@anthonycoletraining.com

Subject line: 1-on-1 coaching call

My wife Linda and I were recently in Columbia Maryland visiting family. While having a mid-afternoon lunch at Clyde’s I happen to see a “LifeLock” commercial on the bar TV. All I caught was the following caption:

“Why Monitor If You're Not Going to Fix It”?

Forbes contribution editor, Will Burns, writes about the absurdity the Lifelock ads point out. He even does us the favor of including the Dentist, Robbery and Pest Control ads in his article.

Many companies, probably including yours, have for many years monitored pipeline opportunities. The idea is to have information about the opportunities being created by the sales team. Companies want to know: 

• What stage in the sales process is the opportunity
• What the next steps are to move the opportunity through the pipeline
• The likelihood of winning the business based on a probability % either calculated or assumed based on the sales stages
• The future sales revenue of all the opportunities in the pipeline.

There are normally at least three problems with the use of CRMs and pipeline management:

1. Validity - The true accuracy (validity) of the predictive nature of the CRM is dependent upon making sure that a milestone centric sales process has been mapped and made to be part of the CRM being used.
2. Credibility – Even if you have the right sales process mapped and documented there is still the element of GIGO – Garbage In, Garbage Out. If your sales team is entering opportunities into the pipeline to keep management off of their back and assuming that the opportunities have met the criteria for each step in the sales process then you still have a predictive problem with your pipeline.
3. Lack of helpful business intelligence – It’s one thing to enter data and get raw numbers of what has happened and what we think will happen. It’s another thing to build your CRM so that you get reporting that tells you how sales people are performing against the sales success formula developed for each individual. Without comparative data then truly all a company or manager is doing is monitoring activity without identifying if in fact there are any problems.

What a company should be looking for, so that it’s in a position to ‘fix it’, are critical numbers and ratios so that a sales manager can clearly and more accurately identify choke points in the sales process for each individual.  Additionally the data can and should tell the manager and the organization if training and coaching is required or if the current training and coaching is having the intended impact: Improving the effectiveness and results of the sales team. 

Let’s assume the following sales effort and effectiveness performance model: 

•  The sales person that is failing to hit sales targets is supposed to:
  • Create 10 new leads a month
  • Convert 50% of those into opportunities
  • Convert 50% of those into presentations
  • And get 50% of those presentations to turn into sold business
  • Additionally the average size sales is supposed to be $10,000.00 

• Lets assume the following actual sales effort and effectiveness:
  • 9 new leads are being created but we don’t know why 9 instead of 10?
  • 50% of leads are being converted to opportunities
  • 50% of those opportunities are leading to presentations (but keep in mind over time there will only be 90% of the planned for opportunities because of failure to hit the lead goal)
  • 45% of the presentations turn into sold business instead of 50%
  • And, the average size sale is $9,000.00 instead of $10,000.00

If this is monitored and NOT ADDRESSED/FIXED then this sales person will be short of their goal in access of 25%. This will be a gradual event because unless the CRM is built to provide this information pro-actively no one will notice. No one will notice because the numbers are either: Not being monitored. Not being addressed because they are ‘close enough’ (9 instead of 10. Management sees this as being 1 off of target rather than 10% off target). Or, the coaching to fix the problem falls into the category of ‘do more’ instead of let’s coach you on how to do ‘better’.

Does any of this look or sound familiar? It may not especially if you have enough of the right people (about 33% of your sales group) doing enough of the right things. With 33% of the team carrying the load you will still end up with about 90% of your goal and all you need is a few of the remaining 67% of the team to contribute something to the production number. You will be close enough.

“Fixing” it has to be part of the investment when investing in sales enablement tools, systems and technology. Fixing the problem requires the following 5 steps:

1. Building a milestone centric sales process that is part of the CRM
2. Creating sales success formulas for each sales person based on their historical actual performance and agreed to sales goals
3. Timely monitoring and updating of sales effort and sales execution data so that you can ‘catch them early’ in real time when their performance is a negative variance from the plan
4. Using the data to develop intentional coaching strategies to help your sales people deal with the specific challenges they are having in either effort or execution. No more ‘run faster’ coaching
5. Use metrics to determine your success:
   • % of sales people hitting effort target increases to 100%
   • % of people hitting conversion ratios improves
   • Production from each of the sales team segments (1/5s) improves year over year
   • The 80/20 rule starts to shift to a 70/30 > 60/40 rule
   • Validity and credibility in your pipeline prediction improves
   • Adaption of your CRM is at 100%

Call To Action: 

Request a 30 minute live Emergency Pipeline Analysis Session to evaluate current opportunities in your pipeline. What you will get/learn.

• Complete instruction on how to more effectively evaluate the validity and credibility of your pipeline opportunities
• How to more effectively identify choke points in the sales process
• A method of intentional coaching to improve the probability of closing current opportunities.

Email:  tony@anthonycoletraining.com. 

Subject Line: EPAS Demo

Why are rollercoasters and anemic pipeline syndromes important?  They aren’t important if:

• You have validity and complete confidence in the credibility of your pipeline report.
• Your CFO never asks you about solid sales forecasts.
• You are ok with the unpredictable ups and downs in your team’s production.
• Your top performers don’t mind carrying the load for the other 66% of the team--who typically generate 10% or less of new business sales. (Get more out of your non-performers)

The rollercoaster/anemic pipeline discussion is important if you need to know the answers to these important business questions:

• How many new leads are we really generating?
• How many of those new leads are converting to new opportunities AND what is that conversion rate?
• What is our real average size account?
• What is our closing ratio from new opportunities to closed /won accounts?
• What is the dollar volume or number of new opportunities on a rolling 90 day time frame throughout the year?

Knowing the answers to these questions helps you have better predictability from your pipeline. The answers also helps you develop a more intentional coaching strategy; one that allows you the intelligence to coach your sales people on their specific choke points.

Instead of telling them they need to “See more people”, “Do a better job of closing” or “Increase your average size sale”,  you will have the ability to show the data so that they understand where they are lacking and must increase efforts and/or learn skills. 

Here are 5 Sales Management BEST PRACTICES to eradicate the rollercoaster anemic pipeline problem, ALTHOUGH you must have a CRM system that does more than just allow your sales people to enter data about leads.

Your CRM tool must have a milestone centric sales process format that collects information about leads every time they go to your site, read an email, or look at your LinkedIn profile.  Your CRM must produce and display a dashboard with all the pertinent information that answers the questions asked above.  And your CRM must have a library of content you can use to help coach your people.  (Ask about about CRM – email mark@anthonycoletraining.com)

BEST PRACTICES:

1. You have established for each sales person on your team a “Success Formula”. You can go to this link to download a template.  The individual Success Formulas puts you and your sales people on the same page which outlines effort and effectiveness required to meet and exceed extraordinary goals.
2. You have a Huddle Process to collect real time information on effort. The entire sales process hinges on one step – effort to generate leads.  It is nothing more than effort.  While skill is required, true effort in the form of necessary behavior is critical .  S.  If you don’t have true “hunters”, recruit and replace.
3. Read and understand what the data for business intelligence. Sales people know when they are not performing well. What they need help with is the “Why?”  The business intelligence you gain from your CRM will point you in the direction of the answer to the question “What should I be doing differently to improve sales?”
4. Establish coaching plans for those failing (even just 5% off of target requires coaching).

**Side note:  Failing is failing.  Don’t lull yourself into a false sense of security with comments like, “He is close. He is trending in the right direction. He is one deal away from hitting goal.”

5. Each coaching session must end with an action step: eg. “Mike, what I want you to do now is to call ABC Company and talk to your contact.  Have the discussion we just role–played and report back to me by the end of business tomorrow.”  Without action steps your sales people will leave these 1-on-1 coaching sessions and promptly forget the discussions. Unfortunately by next week you will be wondering what they did differently, if anything at all.
   

These 5 Best Practices are not meant to be the all-inclusive list of steps required by sales managers to drive sales productivity.  You must still have steps and strategies to motivate your people, recruit more of the right talent, have great sales meetings, develop teams that work together etc.  But focusing on these 5 Best Practices will help you develop a more credible, valid and consistent pipeline.  This is important to you, your people and the company.

Additional resources:

CRM best practices-An article by Izzy Witts at Bablequest.com

9 Keys to Coaching Sales Success  Are you a great coach?