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As we come into Q4 and towards the end of the year, there is only one thing on the mind of every salesperson out there: what do I need to do in the next three months to hit my end of year goal?

To answer this question, every sales manager turns towards their pipeline. They want to know that they’ve got enough value in their pipe to get them to that goal.

But as we’ve discussed before, it’s never quite that simple. There is so much flux within your pipeline that just looking at static snapshots of the data doesn’t give you the detail needed to make important decisions. Instead you need to be able to see how daily changes are affecting your ability to hit that goal. You need to see the flow.

Planning Your Pipeline with No Information

Your pipeline flow is all the events that occur each and every day that affect your pipeline. Did rep A lose a deal? Rep B win one? Rep C push a $30K deal into next month at the same time Rep D pulled a $50K deal from next quarter?

Pipeline isn’t static. Not only are your opportunities moving from one stage to the next, they are also changing in other ways, such as value and close date. Understanding all this turbulence is vital to understanding the true state of your pipeline, as well as how your team and processes are functioning.

If you just took a snapshot of your pipeline once a week you’ll end up with something like this:

screenshot_2016-09-12_17_51_36

The blue bar on the left tells you your pipeline value at the start of the week—in this case $1.8M. The blue bar on the right reveals your pipeline at the end of the week—$1.2M. If you are just looking at the single values of your pipeline then you are missing crucial data.

The only thing this tells you is that your pipeline for Q3 has decreased in value by more than $600K in the last week. But you can’t answer the most important questions:

  • Why has our pipeline decreased?
  • What can we learn from this?
  • How can we change our processes?

The information to answer these questions is missing. Everything in between the start and end of the pipe is unknown. Is that $600K all from lost opportunities? Have we pushed that amount until next quarter? Or did we win those deals?

Without knowing the answer to these questions, the only thing a sales manager can do is push to fill their pipeline with more opportunities. But this is the wrong response. As Ben Theriault, Director of the mid-market sales team here at InsightSquared, put it this way when talking pipeline coverage:

A tighter pipeline with higher conversion rates is vastly superior to a huge but unfocused one, and demonstrates a true understanding of how your product sells.

Understanding pipeline flow is understanding how your product sells. Not understanding the flow leads to inefficiencies and a bloated pipeline. Instead of being able to use data to improve your process, you just fill up the pipe more and more. This makes it harder to reach that goal as you’ll inevitably fill your pipe with lower-quality opportunities.

Going With the Flow

The Pipeline Flow Report fills in that missing information, giving you a clearer idea of where your pipeline is flowing. When you are in the dark you are completely helpless to change anything. If you don’t know whether this loss is a down to pushed opportunities, lost deals, or decreases in value, you can’t move forward with behavioral changes within your team.

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Once you have all the changes in that week, you have a much greater understanding of what is happening in your sales process. That $600K gets broken down thus:

  • $13,560 was opened. These are new opportunities created in this week with a close date in this quarter. This could be an opportunity coming in from a BDR, or from marketing, referrals, or partners.
  • $1,046,840 was pulled. This is the value of opportunities that have had their close date brought forward from Q4 into Q3.
  • $9,762 was increased. This is added value to opportunities already in your pipeline. This could come from a prospect choosing a higher plan than their initial option, or adding more seats or licenses to their prospective account.
  • $341,160 was pushed. These are opportunities that were scheduled to close in Q3, but now have a close date set in Q4.
  • $258,994 was won. Negative changes in pipeline aren’t all bad. About $250K of the pipeline decrease was down to won deals coming out of the pipeline.
  • $1,107,480 was lost. This change is bad though. In terms of deals closed-lost, this week was worse that the headline numbers showed. You actually closed-lost $1.1M in value.
  • $0 was decreased. No opportunities decreased their value. Decreases could be due to discounts, or the prospects choosing to go with a smaller plan than originally decided.

What should be obvious is that there are so many changes possible in your pipeline—push/pulls, increases/decreases, wins/losses—that headline numbers aren’t telling you anywhere near the whole story.

Overall, positive changes to your pipeline lead to an increase of just under $1.1M in value, whereas negative pipeline changes totaled to $1.7M in value. All of this would be missed if you were just looking at the static pipeline numbers and not the flow.

Acting on the Data

Once you have all this extra data you can act on it. This is where tracking the flow of your pipeline is priceless in making sure you hit that end of year goal. With this breakdown of the data you are then in a position to act on it every week, optimizing your pipeline. This optimization can come from process or people.

Improving your processes can come from analyzing this data each week to find which issues reoccur frequently and with multiple reps. For instance:

  • Not enough opportunities available: Sometimes it will be that there aren’t enough opportunities filling up the top of your pipe to service your team. In this case, sales leaders can work with the BDR team to find more opportunities for the pipeline. They can also use this data to better calculate pipeline coverage to make sure they always have the right number of opportunities available.
  • Close dates keep changing: If reps are always pushing close dates for opportunities in your pipeline it is a definite sign that your sales process is faulty. Perhaps your target for your sales cycle is too aggressive, or there isn’t a good enough system for gauging when the deal will close. Conversely if people are pulling close dates, it could lead to rushed deals.
  • Deal values keep changing: It might be nice to see the value of a deal go up during the sales process, but really you want to have that number dialed in as early as possible. You definitely don’t want to see them going down, especially if you’ve already spent a lot of time on the deal. Teaching reps to better qualify values early on in the process can help you keep your pipeline steady.
  • Losing too many deals: If this is happening, then it is definitely a concern for a sales manager. Having this data available, along with historical data on your pipeline and why these deals ended up closed-lost can help you arrest a slide and still hit that target.

These reports can also help you improve your people. You can also analyze this data individually for each rep and use it in your coaching sessions. Let’s look at the individual report for one rep:

screenshot-2016-09-14-12-30-05

In this week her pipeline halved. Without this level of detail, Lauren and her manager may have gone into their one-on-one looking for ways for her to win more of her deals.

But this report shows them that losing deals wasn’t the problem. Zero dollars of the decrease was because of lost opportunities. Instead, the majority of the decrease in Lauren’s pipeline was devaluation. 85% of the pipeline value loss was because opportunities Lauren is due to close this quarter decreased in value.

Spending a coaching session on ways to win more deals wouldn’t have helped Lauren or her manager hit their goals. Instead, spending time looking at why these opportunities lost value in the week is far more beneficial for Lauren and the team.

Conclusion

As we move into this last quarter, and that target is in sight, you want all the data available to you to hit it. The greater understanding you have of your pipeline, the more likely you are to increase conversion rates and make Q4 a success for you and your team.

This comes down to understanding that your pipeline never stays the same, it ebbs and flows. By using the pipeline flow report in your pipeline review meetings, you can make sure that you are tracking that flow and are on target for the end of the year.

Andrew Tate
Andrew Tate is a UK-born, US-based writer. He spent 10 years working as a scientist in labs around the world and now specializes in using data to tell stories.
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Comments
  • Brooke Harper

    Thank you for sharing this, Andrew. Very insightful indeed. Although I regret to read this just now, but this information could help us towards our 2017 year-end goals. Would it be wise to keep track of all data since Q1? Because I think it would help us not only reach our year-end goals, but also plan for the following year. Rather than collecting Q3 for this purpose alone.

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