SALES PROCESS MANAGEMENT VS. FORECAST MANAGEMENT
Many sales forces believe they are spending too much time managing their pipelines when in reality they are spending too much time creating forecasts. If the pipeline management discussions revolve around upcoming dates, probabilities, and deal sizes, then you are predicting. Period. If, however, you spend your time discussing the overall health of your sellers’ pipelines and how they can get you more deals for a successful close, then you are productively managing your pipeline. The main focus of a pipeline meeting should be helping reps develop a game plan to move the business forward, not just scrubbing CRM data and predicting revenue.
Here are the three best practices, as well as ways to implement them in your company.
Clearly define the sales process. Pipeline management includes how the sales pipeline is designed, how it is measured, and how it is used to drive sales rep performance. However, at its most basic level, the sales pipeline is just a representation of a company’s sales process. Sales forces were more effective in managing their sales pipelines than they invested time in defining a reliable and formalized sales process. In fact, there was an 18% difference in revenue growth between companies that defined a formal sales process and companies that did not.
So what does it mean to have a formal sales process? For starters, it means having clearly defined steps and milestones that are universally understood by your salespeople. Your sales team shouldn’t have to guess where a particular deal is or how they should be managing deals at every step. Also, your sales process must align with how your customers move through your buying process. Many sales teams use generic sales processes and consequently have generic sales performance. Invest the time in developing a unique process for your team and make sure they understand how to use it.
Spend at least three hours a month on pipeline management. In addition to having a solid process in place, it’s important to dedicate enough time and resources to do it well. Companies that spent at least three hours a month managing each rep’s sales pipeline saw 11% higher revenue growth than those that spent less than three hours a month. But success doesn’t just depend on the time spent managing gas pipelines – as the time spent is just as important. Forecast generation is just one of the management outputs of the Sales Process.
Training sales managers in pipeline management. 61% of executives admit that their sales managers have not been adequately trained in pipeline management strategies and techniques. This begs the question, “How can we expect our sales managers to do something well when we don’t prepare them to do it?” Companies that trained their sales managers to manage their pipelines saw their revenue grow 9% faster than those that did not. But not just any training will do. Sales managers need targeted training to address specific pipeline management challenges.
Most of the pipeline training that sales managers receive is limited to how they log into their CRM tool and generate reports. What they really need is training in how to make better pipeline management decisions. For example, sales managers need to know how to determine the optimal pipeline size for each rep. They need to know where in the sales process their actions have the greatest impact. And they need to know how to structure pipeline meetings so that they enable coaching rather than inspection. Even these few skills can have a significant impact on sales force performance.
Ultimately, pipeline management is a critical activity for all sales forces, and better pipeline management can make a huge difference to sales performance. There are no secrets to realizing this performance boost—you must define your sales process, commit to good pipeline management, and let your managers do it. If you integrate these best practices into your sales force, you can expect to nail your forecasts, hit your quotas, and see your sales reps succeed beyond what you thought possible.