Intuition doesn’t cut it anymore. Big data informs virtually every aspect of business, including the sales pipeline. But converting all that valuable sales pipeline data into action is where most managers get stuck.
If you use data to understand, measure, and valuate your pipeline, however, you’ll see significant returns. The best managers know the precise value of their pipeline and the opportunities within it. They also know how to avoid friction between the revenue and sales cycles and watch for trends. All of this requires data.
Here are some tips for putting evidence-based strategies into place for your sales teams. You can’t compete without them, and the transformation towards a more data-driven sales approach doesn’t have to be painful. Here are five tips to get you started:
1. Define and Document Your Sales Process
Most sophisticated sales organizations have adopted some sort of formalized selling process. Whether it’s Miller Heiman’s “Conceptual Selling“, SPI’s “Solution Selling“, or your own proprietary system, your processes must be defined, measurable, and consistent.
As a baseline, you should:
- Understand and define the customer buying process
- Define selling steps that align to the buying process
- Identify key checkpoints and milestones that link the two processes together
Your teams not only need to be using the same CRM tools, they need to be speaking the same language, sharing the same goals, and utilizing the same KPIs.
2. Grade and Track Every Opportunity
Of course your organization will be more productive if you focus on the lowest hanging fruits – deals closest to closure versus those in the early stages. The key here is to develop a scorecard for sales opportunities and corresponding tracking mechanisms, alerts, and risk management tactics.
Steps to establishing a workable scorecard system include:
- Identifying the key phases of your sales cycle and assigning scores to each phase
- Assigning weights to scores according to their influence on success
- Defining the characteristics of your “ideal” sales situation
3. Kick the Meeting Habit
In a data-driven world, the old-school approach to sales meetings have little value. In fact, they can cost you thousands of dollars every month in lost productivity, and much more if your sales organization is large.
If everyone is marching to the same beat and utilizing data to guide their actions, the need (or perceived need) for meetings is greatly diminished.
While some face time is valuable, focus on streamlining interactions that, if left unchecked, can do more harm than good. Minimize the number of calls that include the entire sales force, for example. And never combine short-term discussions with long-term issues.
4. Get a Grip on Forecasting
Like most meetings, the Sales Forecast Call has become a wasted opportunity in many sales organizations. What could be used to make real process improvements is instead used as a reporting exercise. Here are a few ways to make the Sales Forecast Call worthwhile again:
- Ask the right questions:
- How much detail is needed?
- How can you manage risk and promote accountability?
- Are your coverage ratios adequate?
- Align forecast call rhythms with those of your business
- Use your scorecard data to prioritize deal reviews
- Identify problems by tracking key measures over time
- Make teams accountable for actions they commit to
5. Understand Your Revenue Cycle
You run sales – do you know how many leads it will take to feed a fully productive sales person? Do you know the right time to add the next sales person to your team? This is another area of management where real-world data will serve you well, and gut-level instinct can be costly.
Modeling your revenue timelines should include the following steps:
- Establish baselines for the duration and size of your average deal
- Identify all the key milestones in your business’ revenue cycle
- Develop a formula for measuring conversion rates at each milestone
- Monitor, learn, and continually adjust your model
Do you have any tips or best practices on building a data-driven sales pipeline? Please leave a comment!