You Can’t Manage what you Can’t Measure
Many sales managers still manage solely through “gut instinct” and “knowing the customer.” While these qualities are essential, the best sales managers also use performance data and systems to track the performance of their team, better understand the operational performance of the sales function and provide early warning systems to areas that need to be fixed. These managers understand that good analysis solutions make them better managers.
These managers also know that successful selling is 90% preparation and 10% closing. This adage is true for pipeline management—Spend more time cultivating good quality opportunities early on, and you will have more and better opportunities when it comes time to close. But most pipeline management systems don’t help sales managers focus on the Key Performance Indicators (KPI’s) of Pipeline Management. Most only show a snapshot of what is in the pipeline today, not an accurate measure of conversion rates or sales velocity. Improve these pipeline KPI’s and you will close more sales, faster.
Align Pipeline to Process
A common mistake is that the pipeline process (stages) doesn’t match the actual selling process. The selling process should track the critical stages or gates that every sale goes through to progress to a sale. Each stage measures real progress towards an eventual sale. Understanding the true buying process—and those individual gates—for your customer segment and your business is not always easy. But aligning that process to the pipeline is critical to successful pipeline management.
Measure the Metrics that Matter
Measuring the pipeline KPI’s provide accurate insight into the performance of your business. But not all metrics are true KPI’s—in fact, it seems many pipeline management systems measure metrics that really don’t matter or do not directly correlate to sales success.
The truly “key” KPI’s are the volume of opportunities coming into the funnel (Measured in either number of opportunities or total value), the conversion rates out of stages (a measure of quality) and the sales velocity (how fast an opportunity travels through the stages). Improve any of these three parameters, and you will improve sales performance.
Manage to Execution Excellence
Just measuring and knowing your KPI’s is not enough. You have to manage the team to improve them. This involves setting goals that the team should be held accountable for achieving, and managing to those goals on a regular (weekly) basis.
Driving frequent review of the KPI’s also provides sales managers an early warning system to areas in the selling process that may need attention. If performance in a given stage falls sharply below its historical average, it may be an indication of inadequate resourcing (not enough sales engineers), a shift in the market dynamics (competition), a short term failure (marketing program flop) or other systemic issues. Early warning of these conditions through weekly review enables the business to take corrective action before it negatively impacts sales.
Drive Better Business Planning
Understanding the performance of the sales process—conversion rates, opportunity volume, sales velocity and average selling price—enables the business to forecast more accurately and better plan resource needs to hit future sales targets. Through a deeper understanding of how the business actually performs, based on historical analysis and segmentation analysis, business executives can forecast with greater accuracy how many deals will close each quarter.
Additionally, sales performance analysis provides business executives with a data driven process for resource planning. By applying historical performance rates to future company sales goals and working back to pipeline goals, marketing managers can plan ahead multiple quarters with clear goals on how many opportunities need to be created. Sales managers can assess resource needs within the territories and at every opportunity stage in order to plan for future pipeline growth. And CFO’s can track spending against future business growth knowing how investments in one quarter will pay off in increased sales in future quarters.
Enodo Pipeline Manager enables Proper Pipeline Management
Enodo Pipeline Manager gives you the tools you need to properly analyze sales performance and manage the pipeline. Enodo Software is designed by Marketing and Sales executives for Marketing and Sales executives, providing the answers you need in an application that won’t take up more of your time to install and use. Enodo Pipeline manager provides real-time pipeline management to help you manage to current quarter goals, while enabling flexible historical performance analysis and future resource planning for a closed loop business process.