The most fundamental trait of an effective sales team is a strong pipeline. With a healthy pipeline, the organization can accurately predict sales and revenue, and all of the other budgeting and planning responsibilities that come along with it. However, building the pipeline presents some challenges, and, even when there are deals in the pipeline, it can be difficult to understand their stage or probability of closing. There are ways in which sales leaders can better measure and understand their pipeline. Here are some strategies that will help.
Document Your Pipeline Stages
It’s unlikely that you will have perfect data to map your pipeline stages; however, you can use the information you have, whether it be qualitative information from your reps, historical data from your CRM, or industry information based on your competitors, to build and document your pipeline stages. With this information, you can define the stages of your pipeline, and train your sales team to perform specific activities to move through all of the stages. You can also make predictions around the quality of your deals and your sales reps’ speed based on these stages. Once you have pipeline stages defined, you can begin to collect better information, and you can continue to refine the steps and deliverables in each stage.
Put Your Faith in the Near(ish) Term
It doesn’t make sense to look at the weather two weeks from now if you want to know if it will rain tomorrow. Similarly, it doesn’t make sense to look at your early stage deals to understand what your sales results for the quarter or year will be because there are too many unknown or changing factors to make an accurate assessment. For that reason, sales leaders need to focus on the deals in the middle and later stages of the funnel to get a more realistic view of their pipeline health and, ultimately, their results.
Fill All of the Stages of the Funnel
If you had $100, and you knew you needed to pay a $70 bill next week, it would be foolish to buy something for $50 today. Foresight is important in financial planning, and also in building a pipeline. When all of your deals are in late stages, you put yourself at risk. If one falls through, you are left with nothing in the funnel to fill its place. If all of your deals close, you still need to fill the funnel to meet next month’s goals. Therefore, it is critical that you continue to fuel your pipeline with new opportunities, even if your deals have a high probability of closing.
Deal sizes, time to close, and deal frequency will all vary by organization; but the need for a healthy pipeline always remains. Ultimately, the healthy organizations will be the ones that measure, assess, and improve their pipeline health.
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