I have a love-hate relationship with spring cleaning. While it makes me feel so good after I’ve cleaned out my closet and organized my bookshelves, actually blocking off time and doing it is daunting. But I know that if I put it off, my dresser drawers will fill up with dozens of athletic T-shirts and the many, many books I’ve hoarded over the years will gather dust.
Sales managers and reps can feel similarly about their sales pipeline: it takes time to review all those opportunities, but if you don’t purge your pipeline regularly, it will only fill up more and more with opportunities unlikely to close that skew your forecast and waste your reps’ time. Don’t let clutter mess up your projections and keep your reps from focusing on the right deals!
Why you need to “spring clean” your pipeline
It’s the beginning of Q2 and you’re preparing for your Quarterly Business Review (QBR), where you’ll outline your projections and goals for the quarter driven by your sales data. It’s more important than ever to forecast accurately because your audience will include your CEO and other executives. If your pipeline is filled with opportunities scheduled to close this quarter that are actually stale or dead, your forecasts will be so skewed that you’ll have no real way of predicting whether you’ll hit your quarterly quota!
Purging your pipeline means reviewing every single open opportunity in there and looking for red flags. But what constitutes a red flag?
Let’s play a game.
To purge or not to purge?
I’m going to describe an opportunity status, and while you’re reading through it, think about whether or not you would purge it from your pipeline. Then, I’ll reveal whether it should stay or go.
Scenario #1: You notice an opportunity that has been in the pipeline since November 20th of last year – that’s 4 ½ months ago. Your average sales cycle is 30-60 days, so you decide to dig deeper. When you click in to the opportunity, you see that it’s spent 30 days in the “Present Solution” stage. Historically, winning deals have only spent an average of 8 days in the “Present Solution” stage. Purge it or don’t purge it?
If your average sales cycle is 30-60 days and this opportunity has spent 30 days in its current stage, winning it is a long shot. The only hesitation I would have is that the opportunity is in the “Present Solution” stage, which is the last stage before customers buy. Maybe they were waiting for their Q2 budget before purchasing, which means they could make a move in the next month. First, send a note to the rep to owns the opportunity to see if she has any insights. But if she isn’t aware of any specific, outstanding obstacles, purge it.
Note: If you’re an InsightSquared customer, you can send a note to your rep right from InsightSquared by clicking on the opportunity and choosing “Send Note”:
Scenario #2: While reviewing the open opportunities in your pipeline, you take a look at your Strike Zone chart. This chart helps you identify the “sweet spot” of winnable opportunities and measure current open opportunities against that sweet spot so you can more easily decide which opportunities your reps should focus their efforts on. An opportunity in the “red zone” catches your eye – it’s valued at $90k (your average deal size is $4-8k) and it’s also 58 days old (your average sales cycle is 30-60 days). It’s scheduled to close on May 30th. What do you do, purge it or don’t purge it?
Although this opportunity being on the edge of a yellow/red zone hints that may not close, you should still always dig into each opportunity and try to get a grasp on the details. How does opportunity value affect win rate, anyway?
Hmmm. It looks like win rate really drops off after about $11k. You click in to the details of the opportunity and see that the last sales activities on the opportunity were a demo on January 22nd and 3 sales calls in February. That was over a month ago. It’s time to check in with the rep who owns the opportunity, and if s/he agrees it doesn’t have momentum and probably won’t close, purge it.
Scenario #3: There’s an opportunity in your pipeline that’s taking a tremendous amount of effort by one of your reps. Her colleague opened the opportunity 4 ½ months ago on November 19th, and your average sales cycle is 30-60 days. The opportunity value is right in your wheelhouse, though: $4,800 when your average winning deal is valued at $4-8k. But look at how many times she’s touched this opportunity! Notice that most of the late-stage activity has happened in the last 2 weeks or so. If the opportunity’s decision-maker has taken this long, how can you expect them to close in a normal time period? But it’s decision time: purge it or don’t purge it?
Although the sales cycle has stretched on for over 4 months, it seems like this opportunity has picked up momentum in the last few weeks. Your rep completed a demo on March 24th, but it doesn’t look like she’s touched base with this opportunity since then. Your first move should be to talk to your rep about the status of the opportunity. How did she leave the conversation on March 24th? When is the next follow-up date? How does she feel about the opportunity’s likelihood to close? If she has positive feedback and you trust her forecasting judgment, don’t purge it.
Scenario #4: You find an opportunity with a sales cycle that is longer than average – 58 days – but still not outside of the normal 30-60 day range. In fact, many of the activities in every stage of the sales process – meetings scheduled, demos performed – all happened within a 30-day period, and that’s great! The only strange thing you notice is that the contact on the opportunity has changed the close date 5 times. What do you think: purge it or don’t purge it?
When opportunities have shifted close dates frequently, that can be a big red flag. It could indicate the opportunity is not ready to buy your product, or it could mean they’ve never had any serious intent to buy from your rep. Take a look at how close date changes influence your team’s win rate. In this case, you can see that win rate drops off to 0% once a close date changes 4 or more times. Check in your rep beforehand, but since this opportunity has changed close dates 5 times, purge it.
Although we think of “spring cleaning” as an annual April affair, you should be reviewing and purging the opportunities in your pipeline at least twice per month. Best practice is at least once per week. Review your open pipeline quickly every weekend if you can, but at least twice per month you should block off an hour or two to really dig in to at-risk opportunities and figure out if they should be taken out of the pipeline. Otherwise, your pipeline could be extremely misleading, which could cause serious issue for you and your team down the line.