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It should be no surprise to learn that nearly every company in the world maintains a sales pipeline. However, you might be surprised to learn that very few companies think they’re any good at managing it.
In research we conducted with the Sales Management Association, 63 percent of executives said that their organizations were ineffective at managing their sales pipelines. That’s another way of saying that their companies waste a lot of time staring at pipeline reports, but their effort doesn’t yield any increase in sales performance.
So how can you improve the effectiveness of your sales force’s pipeline management efforts? Fortunately, our research revealed also some insights that provide a clear roadmap for that.
1. Clearly define your sales process
We discovered the sales teams that were the most effective at managing their pipelines had invested the time to define credible standardized sales processes. More specifically, they had sales processes with clearly defined stages that were universally understood by their salespeople. There was no guesswork when it came to which stage a particular deal belonged in, and everyone believed and trusted the data in the CRM tool. In short, there was a strong backbone for effective pipeline management—a solid sales process with clearly defined stages.
2. Invest sufficient time in managing the sales pipeline
With a solid sales process in place, our research revealed that the next step was focusing the front-line sales managers’ attention on managing the sales pipeline. Companies in our survey that spent at least four hours per month managing each rep’s sales pipeline realized 14 percent greater revenue growth than those that spent less than one hour per month.
Unfortunately, many sales teams believe they spend a lot of time managing their sales pipelines, when in reality they are spending a lot of time creating forecasts. Here’s a simple distinction between the two activities: If you are spending your time discussing close dates, probabilities, and deal sizes, then you are forecasting. However, if you are spending your time discussing the overall health of your sellers’ pipelines and how they can shepherd more deals to successful closure, then you are managing your pipeline in a productive way, and you’ll likely see improved sales performance.
3. Train your sales manager in pipeline management strategies and techniques
Our research also revealed that 61 percent of executives admit their sales managers have not been adequately trained to manage their sales pipelines. Furthermore, sales teams that claim to have adequately trained their sales managers in pipeline management strategies and techniques reported 23% greater revenue growth than those that didn’t. How can we expect our sales managers to excel at something when we haven’t trained them to do it correctly?
The lessons from our research are very clear: Most sales forces are not good at managing their sales pipelines. However, the handful that do manage their pipelines effectively share certain key approaches: They define solid sales processes that are clean and credible. They set aside time to actively manage their sales pipelines (not just forecast revenue). Plus, they train their sales managers how to manage their sales pipelines. Looking at this formula for successful pipeline management, how does your sales force stack up?
A version of this article originally appeared on Salesforce.com.
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