Managing your sales pipeline in IT architecture documentation

How to create outlook signature

hi my name is couch Wanda and welcome to selling power TV today were in beautiful San Francisco with no one beyond he is the managing director and CEO of the sales readiness group Gerhardt thank you great to be back with you know him is the author of that book on high impact sales manager and there's an interesting chapter on managing the sales pipeline why is this so important to you I think that managing the sales pipeline is a key skill for managers today if you think about the you know pretty much consistent use in most organizations by CRM systems and by learning how to imagine an effective sales pipeline we're really looking for is the ability to produce accurate sales forecasts and so I think it's a key skill that managers need to develop and obviously when they present to upper management they want to be as accurate as possible isn't this ironic that this is still a challenge with cin now we had CM now for 15 or 20 years and that hasn't solved the problem I think in many ways CRM is a wonderful thing because it creates such intense visibility and it also is just so robust in terms of the ability to track opportunities for pipeline management though it can also be a liability think about it from the sales perspective you have opportunities that you're working on you know that you're supposed to enter every one of those opportunities into the CRM system but the real issue is that salespeople have a much greater propensity to enter things into the CRM system than to take them out of the CRM system so we have this thing that we call a bloated sales pipeline and over time when you start to look at all the different stages and all the different opportunities particularly cross a so you have a team of seven to ten people it can become a very overwhelming number and as a result which of these are really opportunities that have a high probability of closing and which of these are opportunities that may be stagnant and and not moving or even you know not going to move forward it at any time yeah what I like about the book is that you outline the steps of managing the pipe pipeline can you walk us through that quickly yeah I think there are three key steps one is make sure that there's objective criteria for each stage of your sales process so typically companies have a five or six stage sales process are their objective criterion those criteria need to be customer driven so we'll come back to that in a minute second area is really to make sure that you've assigned reasonable probabilities that make sense and the third area is to track velocities so at what rate is an opportunity moving through the pipeline and maybe even more importantly at what rate is it moving through that particular stage right so let's talk about the probability how do you define the probabilities so I think the probability the best way to look at the probability is to go back and do a win-loss analysis and then take a look and saying from opportunities that were let's say in the needs identification stage what what has been your historical win rate and I think that what we would find is that most default probabilities have been set to high so you really want to look at each stage to say based on opportunities that were in that stage and eventually move to closed one which is the term most CRM systems use what was the actual probability I think there's another issue though that comes even before the probability and that's really what are the criteria for each stage because if you have too many things in that stage and you assign a probability again you're going to come up with way too high on sales forecast so there's a probability for every stage there has to be a probability for each stage and I think what's missing is also one of the exit criteria from each stage i'm using the term exit criteria because they need to be customer driven so when you think about your sales process you might be think about things you're going to do but in terms of needs identification as an example just going back to the example we use before the customer actions might be that the customer has agreed that there is a problem that needs to be solved the customer has budget associated to solve that problem and the customer wants to go to the next step with you so what we often find is that the criteria are not objective and so different sales people will interpret different stages also it's great for a coaching conversation so hey if you know we're going over an opportunity doesn't really meet these criteria right and then there's the final of the three steps which is velocity how do you define a measure velocity so there's the velocity of the overall opportunity which is when you entered it in to when it's eventually closed one or close loss how many days if you have a six month sale cycle that could be a hundred eighty days but in addition to that what we find really important is how long has it stayed in a particular stage so if it's saying in any single stage let's say using a six month sale cycle for more than 60 days it may be dormant so we advise our clients to do is to look at the pipeline assign a reasonable probability each stage a sign clear objective criteria each stage and then assign a time frame for each stage and if something exceeds the time frame it should move not out of the pipeline per se but to an inactive pipeline and so you have to manage both your active pipeline and your inactive pipeline and as soon as it moves back to the next stage again becomes active again but so in kind of in summary would say make sure there's objective criteria for each stage make sure that you have reasonable probabilities associated with the stages and then track your velocity within each stage that's what I like about the book you give them a playbook for managing the forecasting process and end up with better forecast right I think that's going to reflect really well on the manager and it's obviously going to really reflect well on their organization thank you know man we are going to continue our conversation with Norman where we talk about motivating the sales force you you