As Sales VPs look to finish out the year strong and charge into 2014 with plenty of sales momentum, one of their most essential responsibilities is in sales pipeline management. Sales VPs must ensure that they can grow or maintain the pipeline enough to hit their Q4 goals, Additionally, having a robust pipeline will get them off to a great start on the next sales period in 2014.
Read on to learn some important tips on sales pipeline management to grow the sales pipeline in Q4.
1) Examine pipeline history trends and coverage ratio
The first step is to review your historical pipeline by month for the year-to-date. While doing so, ask yourself some hard-hitting questions:
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How is your opportunity count trending in 2013 thus far? Did you have more opportunities in Q3 than you did in Q2? How about compared to Q1?
What is your historical closed-won conversion rates from your sales pipeline for the trailing 12 months? This will inform you of whether you have the proper pipeline coverage (i.e. pipeline-to-quota ratio) to hit your goals. Using your actual historical rates can help you avoid falling into the industry standard trap of 3x pipeline-to-quota ratio, which may or may not be right for your company.
Also take this chance to study the Inflow/Outflow of opportunities in and out of your sales pipeline. How many opportunities are you creating in month, in relation to how many deals were won or lost (representing outflow from the pipeline). If your outflow is significantly outpacing your inflow, that should inform you of where you stand in terms of your lead generation efforts and goals for Q4.
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2) Analyze your marketing efforts
One of the primary contributors to your sales pipeline should be the marketing team. Unfortunately, many Marketing VPs focus solely on generating leads, rather than generating high-quality leads that convert well to opportunities and eventually, deals. Sales VPs should hold their marketing counterparts responsible for contributing to the pipeline by tracking how much of the pipeline is coming directly from leads.
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But just how much pipeline contribution should sales expect from marketing? While there is no right answer, some strong industry benchmarks include:
SiriusDecisions notes that best-in-class marketing functions contribute between 10 and 40 percent of the sales pipeline
Marketo notes that average companies generate 38%, while high-performance companies generate 52%
3) Improve your Outbound Sales Prospecting team and Process
Your outbound sales prospecting team should be a major contributor to the sales pipeline – cold-calling segmented lists of prospects to educate them can quickly turn these cold leads into hot opportunities. However, perhaps your outbound prospecting process, or the team members getting on the phones, could use some tweaking and improving.
Do you have the right process in place? Lead generation is a high-volume enterprise, which means that you are getting the most out of your team. Manage and coach your team correctly by thinking about your process in these terms:
How many dials is each team member expected to make each day? Are there any outbound reps repeatedly falling short of weekly goals?
How efficient are your reps at dialing? Dive into dial metrics to figure out optimal efficiency for things like
Number of attempts – how persistent should your reps be with prospects before they give up?
Day of week – some days of the week have higher average connect rates – do you know which ones?
Time of day – some times of the day have better connect rates, such as between 10 am and 4 pm – do your reps know this?
How prepared with research are your reps before getting on the phone? Steve Richard of sales training firm Vorsight established a 3×3 research plan – lead generation reps should find 3 key points of research about the prospect to use within the first 3 minutes of the phone call.
How effective is the messaging being delivered by reps? Maybe you need to coach them with a new talk track altogether.
Additionally, you must track your outbound lead gen team and benchmark them on the right sales performance metrics. Make sure that your entire outbound team is well aware of what goals they are being measured against.
Now that you know what to do to grow your pipeline in Q4, we must move onto another critical element of effective sales pipeline management – the purge. Purging your sales pipeline of stalled or unsuitable opportunities is an absolute must for maintaining a streamlined and accurate sales pipeline. Check back in tomorrow for the next post in our series on effective sales pipeline management for Q4.