3-26-2014
I was recently asked to participate in one of my clients? sales management conference calls. There was nothing unusual about the call; the discussion was almost completely focused on top-line revenue expectations for each market for the next quarter, and the organization conducts these calls four times a year. The head of sales values these opportunities for each participant to share great information that allows everyone to learn more about what is happening in the other parts of the company.
The call started out with the general company announcements and then quickly got down to the business of the day: revenue projections for the next quarter. The head of sales called on each manager to give a brief report on how they were feeling about the next quarter and what they thought the revenue projection would be. This is standard operating procedure for this organization, and almost everyone on the call had been through this process before.
Here are the responses I heard:
?I?m feeling pretty good about next quarter, as we?ve got a lot out there.?
?Looking good, the pending report shows that we have a lot pending.?
?Pacing is ahead of last year and we?re pitching a lot of business.?
?Activity level feels good. Lots of proposals being pitched.?
?This has been a good week. We closed a lot of business and are now on back on pace.?
?I?m a bit concerned since I?m not seeing a lot of proposals go out the door.?
Eventually all the managers had given their reports, and the group had contributed to the conversation, so the head of sales thanked everyone and the call ended.
Why am I sharing this story?
After the call ended, I met with the head of sales to recap. He mentioned that he was pleased with what he had heard from his sales managers and that he felt optimistic because the pipeline seemed full in almost every market. When he asked me to share my observations, I told him that I appreciated their optimism as well, but I didn?t hear any evidence that pipelines were full.
I explained that since we only heard about the amount of pending business and how much was still out there, we didn?t have the entire picture. While acknowledging that the pending is important, I shared with him that if he wants consistent and predictable revenue based on the most reliable sales information, he needs to measure not just the pending, but the entire sales process. This goes for you, too.
Is your pipeline really full?
Having a lot in pending doesn?t mean that your sales pipeline is full. It is also not an indicator that your future pending will continue to be strong. It simply means that right now, as you look at what you have going on, it appears that you have a lot that has not closed yet. To get a better picture, we need to dig deeper. We should ask questions like, ?How long has it been pending?? and, ?Why has it not closed?? In order to ensure predictable revenue, we need to measure more than just the output; we need to measure each step in the sales process. The pipeline must be full in each stage of the process in order to achieve long-term sustainable and predictable revenue.
Don?t Make This Mistake
Looking at the sales performance of a sales organization, one common mistake is the reliance on ?gut vs. data.? Going around the room and asking each seller what they plan to add this month won?t really get you the data you need to make good decisions. It?s certainly a way to get a sense of what is going on, but sales data is different than sales gut. An effective pipeline will help ensure that you?re getting the sales data you really need.
So what should you spend time tracking and measuring? Here are the pipeline activities you should keep track of on a weekly basis:
-- Number of new leads you?re working
-- Number of quality appointments during which you are meeting a decisionmaker
-- Number of new client assignments earned
-- Number of ideas and solutions you are presenting
-- Number of proposals you are presenting
-- Amount of business you closed
In order to have accurate, predictable, sustainable revenue, you need to have your pipeline completely filled in each part.
Matt Sunshine is EVP of the Center for Sales Strategy.
(3/26/2014 1:01:10 PM)
Matt, we at Efficio Solutions completely agree with your comments regarding a accurate and verifiable sales pipeline. An industry specific CRM system like Efficio will provide sellers and sales management an easy, fast, and intuitive system to operate your pending business exactly as you recommend in your article.
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