Jeff, a sales consultant, coach, and executive with over 25 years of experience in sales, shared why most sales organizations are missing the mark on accurate sales pipeline management and sales forecasting: it’s extremely difficult to get an objective snapshot of your opportunities from reps who were born to sell things (whether it be a big deal, or the idea that they’re “totally on track” for this month). Hence, why most sales managers spend their time in meetings trying to deflect “happy ears” in order to get down to the facts of each opportunity.
(For even more detailed information on pipeline management, check out our FREE eBook: The Definitive Guide to Pipeline Management.)
Subjective Sales Reps Lead to Inaccurate Pipelines
Hoffman reiterated what we’ve been saying about one of the major stumbling blocks in sales management: listening to subjective sales reps self-evaluate their deals means that you’ll never be able to accurately analyze your sales pipeline or make reliable sales forecasts based on objective data. As you know, reps get extremely good at saying the things you need to hear to end the meeting, but the result is always bad analysis of the opportunities they are working. This is why most sales pipelines look like “a snake that swallowed an elephant” in Hoffman’s terms: very few deals in the early stages, tons of stuff in the middle, and very few in the late stages. In this model, there’s really no pretty way for an opportunity to exit on either end.
As you can imagine, if you can’t trust the accuracy of your sales pipeline, there’s little chance that you’ll be able to draw any safe conclusions about your revenue forecasts from that data. It’s a lose-lose for your business.[contentblock id=93 img=gcb.png]
Finding Ways to Purge the Elephant
The solution to subjective reporting and better pipeline management? Hoffman outlined it simply:
- Identify and track each stage in your pipeline
- Anchor each stage to a milestone and tie it to an exit criteria
- Establish target totals for each stage
- Establish target ratios for each stage
That way you can compare team pipelines to individual pipelines, maintain ratios from week to week, purge your pipeline more effectively (it doesn’t mean you have to kill your leads, just put them in the right stage based on milestones) and ultimately look for gaps in your pipeline.
Hoffman also made the case for measuring rep performance based on activity tracking, and we couldn’t agree more. It puts your reps in control of the process, provides an objective measure of performance, promotes an activity-driven sales culture, and even helps reps build confidence and self-sufficiency (“If I make 100 calls this week, I’ll be able to get 5 demos”). Implementing these objective measures gives reps a yardstick to measure their own performance, and will also keep your data honest for more accurate sales forecasting.
Want to get more tips and tricks on pipeline management and sales forecasting reports from Jeff Hoffman and InsightSquared?[contentblock id=18 img=html.png]