I recently had an epiphany in the middle of a conversation with a Sales VP from a large tech company.
He was walking me through his process of generating the sales reports he uses to run his team and – like all our customers did before finding our product – he was spending about 4 hours a week generating his sales reports himself in Excel. We talked about the cost of his time and the value of buying a product to save him that time, instead of hiring a Sales Ops person. But then I realized, we were missing the point.
We’ve all been missing the point.
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Sales-focused business intelligence isn’t about replacing your current Excel dump, Salesforce dashboard or in-house analyst. It’s about identifying the areas in which your team is struggling, and then delivering actionable tactics to remove those roadblocks. The point I realized we were all missing is that he – and you – have not cracked the Sales Pipeline Management Dilemma yet. Which begs the question:
What is the universal Sales Pipeline Management Dilemma?
As Director of Sales for InsightSquared (and one of our very first sales reps), I’ve overseen in some capacity every opportunity we’ve ever worked. The best part is this means I’ve dug in on the actual Salesforce data for hundreds of companies – I’ve seen your win rates, sales cycles, loss reasons, call logs, etc. I see the same trends every time, and almost every tech-focused sales team makes the same glaring mistakes in pipeline management:
Your sales reps spend too much time with losers.
They take three times as long to lose a deal as they take to win it. They chase losers for 90 days, when it only takes 30 to close winners. More than half your efforts are logged against opportunities that have a near-zero probability of ever buying from you. Some of these “bad behavior” efforts include:
- Having close dates this month for opportunities that are still in an early stage. It doesn’t mean you’ll never win it; you’re just not going to win it this month.
- Having only a single contact attached to each opportunity, even though your sales process typically involves 3-5 humans.
- Not logging more than half of your sales activity in Salesforce. Are your reps doing the work or not? You’ll never truly know.
What’s the outcome of all these bad behaviors?
Your sales reps are losing deals they could win and are not generating enough new pipeline because they’re too busy working on old, stale opps that are never going to buy.[contentblock id=93 img=gcb.png]
The Consequences of Poor Pipeline Management
Working the wrong deals for too long means they aren’t spending as much time as they could – and should – on generating new pipeline. Cutting times sooner with the opps you’ve been chasing for too long can free up time to reallocate into pipeline generation efforts. Instead of calling that 6-month-old stalled deal, try making calls into your lead queue.
Sales reps also tend to lose sight of the opportunities they should be chasing when they waste so much time chasing bad deals. I’d hate to imagine one of your “real” opps losing momentum and deciding not to buy – a scenario I see happen all-too-frequently – and deciding not to buy because your rep was too distracted by the bad opps in her name.
Sales coaching efforts will also be rendered ineffective. When your vision is clouded by bad opps, you’ll spend 90% of your time sifting through bad deals to try and find the ones to coach on. Pipeline inflation or missing data will cause you to spend the entire session sifting through your CRM with a fine tooth comb, instead of coaching skills or strategizing. You won’t know why your reps are actually losing deals. Do they struggle with the pitch? The demo? Negotiation? Getting to power? Every opp looks the same, so who knows!
Finally, one of the most critical consequences of poor pipeline management is the inability to forecast your sales accurately. For Sales VPs, frontline sales managers and even CEOs or CFOs, this is a huge problem.
They can’t commit to a forecast because their rep’s pipelines are borderline illegible. Without visibility of the opps that have a legitimate shot at closing this period, sales leaders are left guessing. This problem is only exacerbated as you roll the problem further up your executive team or even your board. Without an accurate forecast, they can’t make data-driven decisions. Will we hit our number? Should we hire more? Keep guessing.
With poor pipeline management, you’re making big-time calls based on half-truths or gut feelings. You’re wasting exorbitant amounts of time and money chasing bad leads, building bad pipeline, and spending countless unnecessary calories.