Since so many companies have sales pipelines, you’d think that there’s a well-worn set of pipeline management best practices out there commonly used by sales managers. Even if that is the case–and I don’t think it is–do you know how many sales leaders struggle to manage their pipelines? An overwhelming majority, apparently.
In recent research we conducted with the Sales Management Association, 56% of executives confessed that their organizations were ineffective at managing their sales pipelines. Their companies waste a lot of time staring at pipeline reports, but this effort yields no increase in sales performance.
Not good news… Fortunately, you don’t have to do a lot of head scratching to improve the effectiveness of your sales force’s pipeline management because our research also revealed insights that provide a solid framework for just that.
1. Sales Processes
We discovered that the most effective pipeline management occurred in sales forces that invested the time to define credible standardized sales processes. More specifically, they had sales processes with clearly defined stages that were universally understood by all their salespeople. There was no guesswork as to which stage a particular deal belonged, and everyone felt confident about the data in the CRM tool. In short, there was a strong backbone for effective pipeline management – a solid sales process with cleanly defined stages.
2. A Time Commitment
Building on a solid sales process, the next prerequisite to effective sales pipeline management was a focus by front-line sales managers’ on spending enough time on management. In fact, companies in our survey that spent at least four hours per month managing each rep’s sales pipeline, realized 14% greater revenue growth than those that spent less than one hour per month.
Unfortunately, many sales managers believe they spend a lot of time managing their sales pipelines, when in reality they are spending a lot of time creating forecasts. There are some important differences. If you are spending your time discussing close dates, probabilities, and deal sizes, then you are forecasting. Period. However, if you are spending your time discussing the overall health of your sellers’ pipelines and how they can shepherd more deals to successful closure, then you are managing your pipeline in a productive way, and you’ll likely see improved sales performance.
3. The Importance of Training
Our research discovered that 61% of executives admit their sales managers have not been adequately trained to manage their sales pipelines. This is a revealing admission: sales forces that claim to have adequately trained their sales managers in pipeline management strategies and techniques reported 23% greater revenue growth than those who had not.
Simple logic. How can we expect our sales managers to do something well when we haven’t trained them how to do it?
So the lessons from our research are very clear. The majority of sales forces are not good at managing their sales pipelines. However, those that are do some very fundamental things that lead to better managed pipelines and superior revenue growth. They define solid sales processes that are clear and credible. They set aside time to actively manage their sales pipelines and not just forecast revenue. And finally, they train their sales managers how to manage their sales pipelines. Looking at this formula for successful pipeline management, how does your sales force stack up?
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