As a sales manager, how much better would your life be if you had access to better forecast accuracy and improved sales performance?
In this episode of the Improving Sales Performance series, Trey Morris, VP / Senior Consultant at The Center for Sales Strategy, discussed how sales leaders can make an IMPACT on their sales performance through effective pipeline management.
What is Pipeline Management?
There’s a big misconception with sales leaders today on what is pipeline management. Many think it means what salespeople have pending.
However, there’s a big difference between pipeline management and pending. HubSpot defines a sales pipeline as, “a representation of how a prospect moves through every stage of your sales process. A prospect moves through your sales pipeline by completing specific actions which are depicted visually in your CRM.”
If you’re a client of The Center for Sales Strategy, you can find an IMPACT course dedicated to pipeline management in our training and resource center. If you’re not yet a client, check out the free IMPACT courses at css.buzz/IMPACT.
The Differences Between Sales Pipeline and Pending
As Morris explains during the Live broadcast, “Pending is a subset of pipeline manage. Your pipeline does include what is pending. The difference is that pending is a snapshot, it’s a moment of time where you’re looking just at the very bottom of the funnel — its what’s been presented and what’s still out there, but it only gives you a small subset of the overall pipeline.”
While pending does give you visibility of where you are in the sales process, pipeline management is a full exhaustive look at the sales process for your organization and for your individual sales reps. It gives you better visibility as to not only what’s going to be pending at the moment, but also what will or should become pending in the future. It also provides you the ability to see where you’re going versus where you are.
A sales pipeline is also referred to as a sales funnel. Both tell where a prospect or a client is in the sales process. It also helps sales managers tell where the bottlenecks are and how to fix them early in the process.
Expected Results from a Good Sales Pipeline
“By using a sales pipeline, instead of just looking at pending, we should get a lot better at our forecasting,” Morris states.
Forecasting will be more accurate, and sales performance will improve for both the sales organization and individual salespeople by using a good sales pipeline structure. This is because pipeline management allows you to have better visibility.
We’ve heard it time and time again, “You can’t manage what you can’t measure.”
Sadly, most managers measure the wrong things, or they’re not getting the full picture of data on what they do measure, so managing is hard.
By following pipeline management strategies, sales leaders will be more accurate and know exactly what to track so that they can help with renewals or upselling, as well as new business prospects. By managing the pipeline in the early stages, you can also know exactly where to help salespeople in the process — is it with appointments, solutions, or close?
A healthy pipeline or sales funnel should not be a mishmash of random customers and prospects. The best sellers and managers are very strategic about their pipelines and focus mainly on activities with the biggest customers—key accounts—and best prospects—target accounts.
If you have better idea and better visibility, you’re going to be more focused on the right areas with right clients or prospects.
What are Deal Stages?
Part of pipeline management is having deal stages.
Morris defines deal stages as the steps in the sales process. “What are the steps in the sales process? Label them, watch them, and see where the bottlenecks are and help them.”
When you think of the sales funnel, the tip is where salespeople identify prospects and key accounts for renewal. This is where they connect with prospects and clients to get appointments. As Morris point out, these are the first two steps in sales process, but they are NOT deal stages because you haven’t gotten a meeting.
Deal stages are about opportunities.
- The first deal stage is the Discover step. This is where the needs analysis takes place and salespeople are uncovering desired business results and looking for problems.
- The next deal stage is the Advise step. This is where they come back and work on solutions - where salespeople are going to help prospects or clients.
- The third deal stage is Close. This is where salespeople make as solution-based proposal based on problems they uncovered. This deal stage is split into two sections — Closed Won and Closed Lost.
Depending on your business category — you can tweak deal stages to fit your sales pipeline. And over time, with enough data, you can start to track the amount of time an opportunity should live in each deal stage to know if it’s going to move forward or die of old age.
As Morris states, “That’s the beauty of pipelines and pipeline management — gathering data and seeing when sales go into the pipeline, how long they last, and the attrition rate of where an account goes from Identified to Connect.”
The key to improving sales performance with pipeline management is getting everyone on the same page. “The rookie and the veteran have to be on the same page and given the same deal stages,” Morris explains. “Everyone plays by same rules and provides the same amount of information, and that’s where having a really good CRM is important.”
Sales leaders have good intentions when implementing pipeline management strategies, but they often forget to position it right away. And this leads to feeling like micromanagement to salespeople.
As a sales leader, you can share the collective data to your entire group, and as a salesperson you should want to know what percentage should be moving through the pipeline and be closing. This is a repeatable, consistent system that will make you better if you utilize it correctly.
Don’t miss another episode of the Improving Sales Performance series where Managing Partner Matt Sunshine speaks with thought leaders, experts, and industry gurus, who share their insight, tips, and knowledge on various topics that help companies improve sales performance.
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