Pam stretched and pushed her chair back. Her laptop lay on the desk, with her company’s new CRM platform on the screen. This is redundant, she thought. Re-entering her calls, appointments and notes from her own system, just so that someone else can read them and run a report.
"Don't they want me out there selling, instead of doing data entry?" she muttered, leaning back into the work.
Pam’s resistance to logging her activity through CRM is typical of most salespeople. Like others, Pam may not realize how this administrative task contributes to increasing her sales performance, as well as the performance of her company.
Tracking and coaching activity using CRM is a cornerstone to increasing sales performance. In fact, our latest sales culture research shows that the best sales organizations leverage data, effective pipeline management processes and leaders better or differently to drive sales productivity and revenue growth.
This article discusses how you, as a salesperson or a sales leader, can better engage in CRM and the pipeline process to diagnose and manage your sales pipeline, uncover where to focus and identify what activities will lead to increased results. You’ll also discover how to create a mindset shift to drive behavior change that keeps salespeople like Pam accountable.
Let’s start by defining sales pipeline.
As we know, a sales pipeline is a way to track the pace and progress of opportunities through the sales cycle.
Leverage Your Sales Pipeline
As a salesperson, your sales pipeline is an important tool that helps you understand how you are performing and where the opportunity lies for you to be successful. Reviewing your sales pipeline helps you think about where your time is best spent, how you are managing your territory, opportunities and client relationships.
For Pam, it’s easy to perceive logging activity as a non-value administrative task. However, without documenting, neither Pam nor her sales leader Jim would have a line of sight into how her activity leads to the results that take her game to the next level.
Pam also benefits when Jim reviews her pipeline. He can uncover how Pam is spending her time by looking at lagging indicators such as new business, revenue and profit. He can also help coach to leading indicators such as time invested in prospecting and number of client meetings to drive increased performance. Our research shows that the best sales leaders are 37% more effective at using pipeline reports to drive sales productivity.
Interestingly, our recent survey of over 100 sales leaders revealed that only 32.3% have a healthy pipeline. Taking a proactive approach to managing sales pipeline will help Jim coach to the most important activities, priorities and opportunities to strengthen Pam’s sales pipeline and ultimately allow for more consistent sales results.
Diagnosing Your Sales Pipeline
In our work, we help sales organizations recognize four types of pipelines that, when assessed, can reveal a lot about a salesperson’s focus, activity, opportunities and territory coverage.
1. Healthy Sales Pipeline
A healthy sales pipeline has many opportunities that correlate strongly to sales targets. This type of pipeline consistently delivers sales on a regular monthly basis because they have a balance of prospecting and closing.
If Pam’s pipeline is healthy, you would notice that she is constantly on the phone or in meetings with prospects and customers. She would be busy all year regardless of the season, and she would be able to balance prospecting, opportunities and closes effectively through the various stages of the sales cycle.
2. False Hope Sales Pipeline
A false hope sales pipeline has lots of early stage opportunities, yet does not deliver on sales targets on a monthly basis. The challenge with this type of pipeline is closing business.
If Pam has a false hope pipeline, you would notice that she spends a lot of time on early stage activities that seem to stall. She may have difficulty qualifying opportunities, persuading clients effectively or engaging in good business conversations such as linking her solutions to the client’s needs. Even though she has quite a full pipeline, her opportunities do not materialize into revenue.
3. Thin Sales Pipeline
A thin sales pipeline does not have enough opportunities across all stages of the sales cycle. The challenge with this type of pipeline is volume. Areas to focus include prospecting, expanding customer opportunities and addressing most effective top of the funnel activities.
If this was the case for Pam, you would notice that her activity is off because she likely doesn’t spend enough time prospecting to fill the top of her pipeline.
4. Congested Sales Pipeline
A congested sales pipeline has lots of prospects, but few turn into opportunities and thus very few closes.
If Pam has a congested sales pipeline, you would notice that she is great at prospecting and generating opportunities and is active on the phone. She would likely consistently exceed her call and meeting goals. Ultimately, she has difficulty pulling opportunities through the full sales cycle and closing opportunities effectively.
After identifying the type of sales pipeline you or your salesperson have, you’re ready to start preparing for your pipeline review conversation.
Sales Pipeline Review Meetings
Pam likely has a lack of enthusiasm for this, too.
Too often, pipeline review meetings can feel like mandated compliance activities as opposed to valuable feedback sessions and dialogues.
Sales leaders play an important role in setting the tone and having more a productive conversation, one that encourages an engaging dialogue rather than a monologue of reporting information.
If the dialogue shifts, Pam will see the value in the coaching and feedback from her pipeline review conversation.
This conversation is an opportunity to diagnose and gain alignment on the priorities and key activities to optimize the territory.
Pipeline review meetings are not meant to review every opportunity line by line, but rather provide coaching on priorities and focus areas that will increase performance.
As a leader, this is your opportunity to manage mindset, approach, activities and process to really help your salesperson through challenges and set them up for success.
How can you, as a leader, do this most effectively?
Ensure clear focus
Pam may have a high volume of prospecting, meetings and proposals and they may also be of high quality. However, if the opportunities are $5,000 in value on average and you need them to be $500,000, Pam has the wrong focus.
It’s important to know who your target is ¾ who should your salespeople be talking to? It’s about connecting with the right company and the right person to satisfy a relevant need.
Support strong activity
Although quantity of activity is important, quality is even more critical.
Instilling quality and consistency is possible through ride-alongs and joining in on client meetings and phone calls. Spend time in-market with your team to observe, model and assess their performance to ensure quality.
If salespeople aren’t being coached on their focus, activities and quality of their efforts, the results won’t be there.
Create a healthy pipeline
Managing to pipeline becomes easy if you have a good CRM system and you hold your team accountable to keeping it updated.
Diagnosing their pipeline type will allow you to lead a productive pipeline review meeting and identify coaching opportunities to help your team prioritize and focus their activities to create consistent sales results.
Unlock over plan results
Managing only against results is the same as driving a car by only looking through the rear-view mirror.
Too often, leaders only look at lagging indicators such as closes and revenue when reviewing pipeline. This is why focus, activity and pipeline must be accounted for when managing performance.
To unlock over plan results in your sales organization, ask about our pipeline management sales training solution.