Sales managers and executives know that sales pipeline management is critical for long-term success. A study conducted by Vantage Point Performance and the Sales Management Association revealed that 44% of B2B executives feel that their current pipeline management is ineffective. Companies with effective pipeline management are growing revenue 15% faster than companies with ineffective management.
Yet while most businesses know the importance of managing the pipeline effectively, enacting effective management techniques can be difficult. Here are the best practices for managing the sales pipeline:
Train managers to manage the pipeline
The Vantage Point Performance study demonstrated that 61% of executives admit that their sales managers have not received adequate training in sales pipeline management. Clearly, sales managers can’t perform this task effectively without proper training. Unsurprisingly, companies that did provide sufficient training saw faster growth.
Training for sales managers should include not just CRM mechanics, but also development of managers’ ability to make sound strategic decisions. They need to know how to optimally assign leads to representatives and how to train reps to manage their leads.
Most of all, managers need to devote time to sales pipeline management. At least three hours per month should be devoted to reviewing and managing the pipeline. For some businesses, more time may be necessary.
Keep the CRM in working order
Your CRM is the most valuable ally you have in sales pipeline management. In order for sales representatives to utilize the CRM effectively and close more deals, the CRM needs periodic clean up.
Tips for organizing the CRM:
- Identify and merge (or remove) duplicate entries. Duplicates make it more difficult to track activity for a lead, so you want to periodically check for duplicates. Most CRM applications have tools for identifying duplicate entries, but they may not catch everything. Have the sales team go over the database for duplicates. You can even offer small prizes.
- Check to make sure that every entry in the CRM is complete. Entries with missing e-mails and phone numbers are less valuable to sales representatives.
- Keep contact information up-to-date. A lot can change in the B2B world. People may leave their positions, and e-mail addresses change. If you haven’t spoken to a contact in six months or more, contact them to ensure that the information you have on record is correct. (This is also a good opportunity to check in for pipeline purposes.)
- Use tags smartly. The tagging feature makes it easier for representatives to search for warm prospects. Create tags for demographics, industry, and other important factors. You can even use tags to leave messages for other members of the sales team (i.e. “Responds best to phone calls.”)
Monitor all opportunities
When it comes to closing a sale, speed matters. In order to take advantage of all opportunities that come your way, you need to have a system in place for monitoring them. This means not just assigning leads to sales representatives, but also ensuring that action is taken.
Once initial contact is made, managers should periodically ask for updates on leads. Most sales aren’t made on the first call, so newer sales representatives should be encouraged to follow up early and often (but not too often). At the same time, however, sometimes representatives need to be told that a cold lead isn’t going to result in a sale.
Use tools offered by the CRM to monitor the volume of open opportunities. This will also help your forecasting.
Use data to guide your sales pipeline management processes
Data analytics has taken the guesswork out of sales. Now, you can utilize data to help you optimize your pipeline. Measurements to track include:
- Number of new deals
- Average size of deals
- Close ratio on warm leads
- Repeat purchases
- LTV (Lifetime Value)
- Average lead response time
- Rate of follow-up success
Some of these metrics may be more or less relevant to your particular business. But you should choose KPIs to track and monitor them. You may also want to segment your leads into subgroups to find out if you’re more successful with certain subgroups in the market.
Data will help you to identify weak points in your sales process. However, trying to re-haul all of your processes at once can lead to confusion and resistance. Choose one area at a time to focus your efforts. For example, if you find that your lead response time is lagging, your team can focus on that before moving on to the next weak point. Even if you don’t have many weaknesses, there is always room for improvement.
If you’re not sure what your metrics should be, take a look at data compiled from sales experts.
Develop a formal sales process
Oftentimes, a sluggish pipeline is the result of a failure to clearly outline procedures to sales managers and representatives. In order for everyone to perform their jobs effectively, they need guidelines. While every business has unique needs, sales processes should be developed in consultation with the latest sales research. Write it down in a handbook. Train all new sales representatives in your process, and give periodic refreshers.
A good sales process should include (at minimum) procedures for finding leads, making that first contact, follow-up, dealing with indecisive leads, and closing the deals. Although following formal procedures may initially be overwhelming for sales representatives, eventually it will become second nature to them and they will see that the process improves their own sales.
Don’t be afraid of forecasting
Many sales managers fail to prioritize forecasting, to their own detriment. Think of forecasting as a way to see potential roadblocks and opportunities ahead of time, so that you can take action to guide your teams towards great results. Forecasting is like checking the weather before you leave the house. It’s not fail-proof, but it will help you to prepare for what’s to come.
Make an effort to learn sales forecasting techniques so that you can make the right decisions.
Managing the sales pipeline involves many different moving parts. But by instituting these best practices, you can optimize your pipeline.