Six Vital Signs for Successfully Managing Your Sales Pipeline
What makes an outstanding sales manager?
We’re running a series of short articles designed to answer the most important question in sales management: What makes an outstanding sales manager? Carrying on from her last thought piece, Janet Garcia, Chief Commercial Officer at Imparta, will be expanding on her view of the eight key attributes of great sales management.
The first of the topics we asked Janet about is the need for brilliant pipeline management.
Sales management is all about the numbers, making pipeline management a critical task for a sales leader. However, there is more to it than just looking at the size of the pipeline. Envisage the pipeline as a patient and the sales manager as a doctor – there are six vital signs that an outstanding sales manager should monitor to assess the health of the pipeline.
The first area of focus when managing your pipeline should be size. Ask yourself, “If my target is x, do I have enough deals at a value that, if converted, will get me past that target?”
The total pipeline needs to amount to far more than the budget, as some of the deals will fall away, be delayed or be lost to competitors. Most people will put a probability against each deal, for example when you know you are down to the final three in a bid, you give yourself a 33% probability rating. Therefore, that deal will only be given a 33% win likelihood in your pipeline. This way you can create a weighted pipeline, and this should help you to exceed your target.
Shape is the second area of focus. The ideal pipeline would reflect a perfect funnel, heavy at the bottom end with new opportunities constantly filling it up, reducing to only a few key opportunities at the top end (see the diagram above). This shape is imperative for long-term success. While you may feel great success by focusing on and closing a few key deals, if you don’t make time to feed in new opportunities, you are effectively creating an obstruction in your pipeline.
The third topic of interest is the velocity at which deals progress through the pipeline. Having a lot of deals that get stuck at an early stage indicates an issue in your sales team regarding their ability to qualify effectively. Alternatively, if the deals get stuck at a later stage of the pipeline, this could be symptomatic of not having a deep understanding of your customer needs or not managing stakeholders well enough. Understanding the speed at which deals move through the pipeline, and the time frame of your sales cycle, is essential.
This refers to the loss of deals within the pipeline, which is of course something to look out for. We are all operating in an open and competitive market, which means you can’t win every deal. I always keep a constant win/loss analysis. This allows me to look for commonalities between our successful deals, to make sure we replicate these, and equally between our lost deals to increase understanding and drive initiative to avoid losses in the future. Feedback from a loss can be extremely helpful in understanding the reasoning for leakage, and clients tend to be happy to provide this.
Salespeople famously take the path of least resistance to achieve their targets, so they will sell what they find easiest to sell. However, this may not reflect what is best for the business, as the profitability of different product and service lines may vary enormously. Another variant to consider is the strategic importance placed on a product, as you may want to grow market share in a certain area, for example. Over-reliance on one product can be a risky strategy, while having a mix of products can be of both financial and strategic benefit.
6. Must win deals
The last vital sign could potentially aid the recovery of your pipeline patient the quickest. All deals are important, but some are a little more important than others – I term these ‘must win’ deals. I always keep a list of the current top five must win deals, which are priorities due to either their size or strategic importance, and I make sure the whole organisation aligns their efforts to win those deals. It’s amazing how many times the client will actually pick up on that collective commitment, especially if there is not much to choose between you and a competitor.
These are the vital signs you should be monitoring on a regular basis. Analysing these allows you, the doctor, to be able to diagnose any issues and nurse the patient pipeline back to health if needed.