Most sales managers rely on two key tools to monitor sales rep
productivity: pipeline and forecasting. However, highly effective sales
managers understand that there is a difference between the two.
focused on later stage deals – the ones that are far enough along that you can
begin to get a feel for the likelihood of success in the current quarter.
However, forecasting does little to help with future quarters. Technically,
pipeline refers to every opportunity a sales rep might be working on –
including the ones that are far enough along to be at the forecast stage
– but there are many other opportunities in the pipeline that are not that far
along yet. We can designate these deals as being part of the “forward”
pipeline, because they are focused on the future development of sales that
ultimately impacts later forecasts.
The problem this creates is that too many sales managers don’t
differentiate between the two, which often leads to sales reps not working hard
enough or smart enough to develop the deals farther back in the pipeline. If
this situation persists, sales reps will spend too much time on the forecasted
deals and the opportunities deeper in the pipeline will be neglected, leading
to a decline in deals that reach “forecasted” status in the next quarter.
What steps can managers take to guard against this confusion?
A lot of organizations still rely on the old 30-60-90 day
predictive approach, as in, “it looks like this opportunity is about 60 days
from closing.” The sales rep bases this estimate on the level of progress that
still must take place within the account. The problem with the predictive
approach is it makes it very easy for deals to get stuck and then die before
anyone realizes what has happened. The sales rep can just keep pushing the deal
back another 30 days, waiting on things to happen, rather than being proactive
and working with the customer to make the deal happen (or put it out of its
misery and mark it as lost).
A more sensible way to manage the pipeline is to monitor
opportunity progress based on the length of the sales cycle, and link the work
being done on the opportunity to the time it should take to close the deal. We
might call this the cadence approach.
The cadence approach is based on the length of your sales cycle
mapped against a defined sales process. The end in mind of the cadence is then
to define accountability milestones throughout the sales cycle to make sure the
right tasks and behaviors are being accomplished at the right time in order to
advance the deal.
Let’s say a sales rep has an opportunity that has been in the
pipeline for 10 weeks. If you have a cadence in place, it is a simple matter of
checking to see what should have done by week 10. If those tasks haven’t been
done, you know the opportunity may be in danger of being lost. As a sales
manager, your responsibility at that point is to get with the sales rep, find
out what the roadblocks are, and provide the coaching and support required for
the them to get the opportunity back on schedule.
Once you start managing the forward pipeline this way, forecasting
becomes less urgent but also more accurate. Sometimes people try to attach a
forecast to an opportunity based on the time it has been in the pipeline, which
is not helpful or at all accurate. An opportunity shouldn’t be assigned a
forecast status until certain key objectives have been met. For example, does
it make any sense to attach a forecast status to a deal when you haven’t even
submitted a proposal? Can you forecast the success of a deal with any degree of
accuracy when the customer hasn’t agreed to any next steps? As part of your
cadence process, you should create a set of benchmarks that define when an
opportunity is forecastable; anything that hasn’t hit those benchmarks remains
in the forward pipeline and the rep should work diligently to keep it on track.
Managing the forward pipeline using the cadence approach makes
it much easier for the sales manager to implement effective coaching. The
important take away from all of this is that both the sales rep and the sales
manager must work just as hard and just as smart when dealing with the forward
pipeline as when trying to bring the forecasted deals in for a landing. The
more seriously you attend to the forward pipeline, the happier everyone will be
when the next quarter comes.
At Front Row CRM we believe in the sales rep and built a CRM from the ground up as a mobile system. This allows the sales rep to complete and submit sales reports in less than 60 seconds from any mobile device, leaving more time for selling. We have added features to help the sales reps be more productive and improve compliance, including data and information retrieval, note review, location and directional maps, contact information, camera integration, sync with Outlook or Google PIM and more.