Sales is the engine of any company.
Marketing supports it and CEOs pray for it.
It’s what allows you to hire more employees, grow into new markets, and invest back into your company. So the question is– are you getting the most out of your pipeline?
In a world of endless online transactions, the opportunity to collect data and draw relevant conclusions is more possible than ever.
What if you could take hundreds, thousands, or millions of sales transactions, and use them to make informed and strategic decisions? We’re talking less guessing, more measuring.
We interviewed Gabe Larsen, Director of Sales Acceleration Services at InsideSales, an industry leader in sales acceleration technology.
InsideSales recently conducted a study based on one simple question:
What can 5.4 million sales interactions tell us about sales pipeline management?
How can 5.4 million sales interactions, and the data behind them, inform your sales management pipeline?
Luckily for us, Gabe and his team have the answers.
InsideSales Data Study
Most of the previous studies InsideSales has conducted have been focused on top of funnel concerns like lead generation. This study, however, was about sales opportunities.
In Business Growth Index, they utilized two main methods to collect data.
InsideSales has what they consider the world’s largest sales database. This is no roadside attraction either; their database contains more than 100 billion sales interactions – that’s top-of-funnel, bottom-of-funnel, sales calls, emails, it includes everything.
They first segmented the data by specifically looking at the bottom-of-funnel and then grabbed 5.4 million anonymized sales pipeline transactions.
Second, they performed a qualitative market survey to 600 industry sales leaders to find the root causes of the transactions and their impact on sales pipeline.
They combined those responses and the data within their system and came up with some impressive findings.
One conclusion of the study is certain—growth is inevitable.
76.6% of sales leaders predict either a steady or accelerated growth in 2016. If this is true, and ¾ of leaders predict their sales to increase this year, then how those companies manage their sales pipeline is of utmost importance.
One fun fact that came from the study is that almost 60% of sales reps who don’t hit their quotas dread the conversation with the Chief Financial Officer over any other executive or manager including the CEO. Maybe that’s why some of your reps avoid C-suite at the end of the month.
Another one of the major takeaways was that companies are going whale hunting. They’re moving upstream– going after bigger clients, longer sales cycles, and larger deal sizes.
In fact, according to this data, between 2014 and 2015, sales cycles became 6.4% longer and moved from an average of 75 days to 80 days, close rates decreased by 2.1%, and deal sizes grew by 5%.
When they assessed the overall data, they saw that companies are moving into the mid-market and enterprise space.
If you want to get into the intricacies of the study, you can download the InsideSales Business Growth Index. But let’s get down to the tangible takeaways, like what that data actually means to you.
Here’s some advice you can implement to start seeing results.
1) Get a Tech Stack In Place
Sales acceleration technology is a must for managing your pipeline.
Nearly 20% of sales leaders reported that deal size growth in 2015 was quite larger using predictive technology. Predictive is a big part of the sales pipeline tech stack.
To optimize your pipeline sales stack, there were several must-haves for sales leaders: CRM, sales intelligence, sales presentations, and data list services were at the top of the list.
2) Get With The Pipeline Management Program
First things first, get out of Excel.
It’s archaic, it’s unreliable, and you can do better. We believe in you. You can’t be using Excel and trying to manage your deal stages somewhere else. You can’t be using Excel for pipeline management.
Gabe says you have to use these five things if you’re going to use data and science to manage your business through pipeline views:
- Forecast Confidence. At each stage of the sales funnel, how confident are you that a deal will close? 10%? 20%? 30%? Forecast confidence is a predetermined number tied to each sales stage that represents the level of closing confidence.
- Forecast Categories. These categories allow a subjective view into your pipeline. For example, someone might be in stage two of your pipeline, but you’ve already gotten a hard commitment by a decision-maker. Classifying them as a blanket “stage two” might not be indicative of their true status.
- Basic Sales Stages. As you move through the different stages of a sale, you should tie forecast confidence in with the stages and documenting these in your CRM to help give you a more predictive set of analytics. These can be things like identified proposal, finalist…whatever stages you’ve designated.
- Opportunity Score. This is your move into the realm of predictive analytics. A data-driven approach like an opportunity score will give you the likelihood of determining if your sales transaction opportunity is valid or not.
- Commit Score. Like the opportunity score, this is an objective data-driven approach that asks, “Can I get a commitment this quarter? Or can I get it this month?” The more of this you can institute, the better off you will be.
Objectivity and subjectivity both have their places. You can use subjective data, pair it with predictive analytics, and get a more objective picture of how likely you are to close any given deal.
Since a good portion of sales forecasting is subjective, it’s important to know the tricks of the trade to squeeze the most out of these projections. Check out this Inc.com article on 7 Tips For Improving Sales Forecasting.
3) What You Can’t See, You Can’t Measure
If you’re serious about moving upstream, you need to get serious about managing your pipeline.
Now that we’ve reviewed a bit of the process, let’s take a good look at how companies are reporting on pipeline.
If you’re moving into the whale hunting realm, there are four main elements to measure:
- Quantity – Is the total quantity of your pipeline reasonable versus your quota?
- Quality – What percentage of your pipeline has a scheduled next event?
- Velocity – Are opportunities moving through the pipeline stages at a reasonable rate?
- Balance – Is there an even distribution of prospects on top and bottom of sales stages?
This may seem like a substantial time commitment or something that you need a huge staff, giant budget, and all the resources in the world to pull off; however, more often than not, people just simply don’t know where to start.
When it comes to the process, people will usually Google “sales stages” or “better CRM” and try to implement something that someone else is doing. Sales pipeline management isn’t cookie cutter—but it doesn’t have to be difficult.
Create a Process, Then Execute
Once you’ve got your process down and are getting some measurable insights, now it’s time to put some structure around it so you can improve and manage it effectively.
One of the ways Gabe recommends doing that is thinking about a forecasting cadence.
What does that mean? This is a sample idea, but one that sets a steady, consistent schedule:
Thursday AM: Sales reps sit down, discuss the pipeline, and apply forecasting standards (win score, forecasting confidence, etc), then report to their managers.
Thursday PM: After reporting to managers, the managers review, revise, and develop the pipeline.
Friday AM: VP of sales conducts sales manager forecast meeting.
Friday PM: CEO conducts company forecast meeting.
With a quick 48-hour turnover like this, you want your meetings to be as efficient as possible. InsideSales released an ebook, Sales Forecasting and Pipeline Management Demystified: 3 Questions To Ask In Every Pipeline Meeting, to help managers avoid dysfunctional pipeline meetings.
You want to be thinking about the tools and the reports, but then build a cadence around it so that you’re actually taking action around those reports. You can gather all the data in the world, but unless you set time aside to review it and put action to it, then it’s useless.
Don’t Fake It Until You Make It
You’re never good enough to not need a coach. No sales rep, no VP, no CEO, no one is exempt. You’re never good enough to not need a coach.
Think about it. Tiger Woods, Kobe, Lebron, the USA Olympic Team . . . the world’s greatest athletes all have coaches.
It’s important to give your sales reps the training and coaching they need in ways that they will receive it and apply it effectively. Don’t ask them to “fake it till they make it.” This is only setting them up for failure down the road.
Set up a predictable cadence for team and one-on-one meetings. These can be weekly or monthly, but stay consistent.
Gabe also points out that it’s important to help reps focus on the execution of tasks over future outcomes.
When Tiger is practicing his swing, he’s not concerned with 350-yard drives. He’s concerned with his hip movement, shifting his weight correctly, and how he’s positioning his shoulders. He’s focused on the details because those lead to long drives.
The same applies to your reps. Small improvements along the way will lead to big wins.
Salesforce released an infographic showing the ROI of Sales Coaching. It revealed that coaching has a direct impact on sales performance.
It revealed a 17% performance difference between reps who are coached and reps who are not. It showed that sales teams who use sales performance coaching have 161% more wins.
Their study showed that coaching is the difference between reps making or not making their goal. Teams that received around 2 hours of coaching per month hit 90% of their sales goal, and reps that received 3+ hours of coaching per month exceeded their goal at 107%.
That direct impact is nothing to ignore.
Highlight Strengths over Mistakes
When coaching your team, it can be easy to focus on the things employees are doing wrong.
How many of us have sat down for a performance review, only to spend ninety percent of the time talking about “growth opportunities?”
Shift your focus from coaching mistakes to celebrating strengths.
Gabe talked about a strength-based 3:1 coaching approach: an approach that doesn’t exclusively focus on an employee’s weaknesses or things they need to improve on. It starts with three things an employee has done remarkably well that are worth celebrating, then moves onto one opportunity for improvement.
In a different B2B Growth Show episode, Michael Bungay Stanier, shared 7 Questions That Will Change The Way You Lead Forever. Check out that blog post for a few strong questions to keep in your coaching toolbox.
Sales pipeline management is a necessary element for growing your business.
A thorough analysis of the hard data can take you from where you are to where you want to be.
Just behind the curtain of your sales transactions sits loads of data ready to be analyzed and applied. When you approach the data with the correct sets of tools and resources, you can begin to reach the full potential of your business.