Successfully managing a sales pipeline is integral to any business, small or large, but it's not easy to execute. Thankfully, the boom in sales technology has made pipeline management much easier. We'll break down 5 ways to keep leads flowing and deals closing, and end with a chart that shows your pipeline's health, your sales team's performance and your personnel management at a single glance. Read on for the keys to any successful pipeline process.
1. Have a well-defined sales processClear definitions goals aren't just good for keeping your team accountable. They free you from having to start from scratch every time you want to run an analysis. This means having mutually exclusive, comprehensively exhaustive, and understandable stages for your leads. Take the guesswork out of assigning leads to stages, and give clear direction on how each stage maps to actions or roles. Further, your stages should be tailored to your specific customers - what works for a business that targets up-and-coming tech companies will have a very different pipeline than one that sells to enterprises.
2. Track the right metricsIf you're doing traditional sales, the "pipeline velocity" metric might be the way to go:
open opportunities * close rate * average deal size
sales cycleEssentially, this metric tells you how much money your sales reps are making per day. However, it's a very rough gauge, and leaves out certain nuances:
- Going out guns blazing to increase the number of open opportunities might lower quality, causing a lower close rate.
- Focusing on incremental changes (like shaving a few days off your sales cycle) may distract you from step-function improvements (targeting customers who move through the pipeline much faster).
- A customer's lifetime value can increase even after the initial deal is closed - a key tenet of account-based marketing.
3. Train your sales managers (or if you are a sales manager, ask for training)According to the Harvard Business Review, companies that train their sales managers grow revenue 9% faster than those that don't. Empower your sales managers to do more than just use a CRM tool - they should be able to look at the metrics you've chosen and translate them into recommendations for their team, recruiting priorities and strategic decisions. As HBR says, sales managers need to be trained on making pipeline process decisions: the highest-leverage changes they can make, the ideal pipeline size for their team members, and how to structure pipeline reviews. And speaking of...
4. Invest in pipeline reviewThat same HBR article found that companies spending at least three hours a month on pipeline review saw 11% greater revenue growth than companies spending fewer than three hours. As the article notes, pipeline reviews shouldn't be about cleaning your data (that should never be a problem) - they should be about working through current opportunities, making sure nothing falls through the cracks, and improving the overall process. Not only do pipeline reviews increase close rates, but they also provide valuable insights and learning opportunities for the rest of the team.
5. Focus on actionable feedback, not tweaking numbersFinally, learn how to map your process, metrics, and pipeline review into specific recommendations to give your reps. Rather than talking about expected revenues or the chance of making quota, dive deep into the numbers to see where your team can improve. Are the account executives stretched too thin to qualify leads in time? You may want to start recruiting more AE's. Is your pipeline as efficient as possible, but you're still falling short? Maybe you can coordinate with your marketing team to drive more or better leads. Feedback shouldn't be about calculations or blame - they should be constructive.
Your comprehensive sales reporting dashboard - in just one chartFinally, this awesome chart comes via Tomasz Tunguz:
He gives more detail in his blog, but in a nutshell, this one chart gives you:
- Your team's composition, growth and retention
- Team and individual performance
- Improvement over time