Have you and your team struggled to build and manage your pipeline effectively? Do you feel clueless about how to analyze and manage expectations when it comes to anticipating the future revenue that will keep your company profitable? If managing the pipeline is a mystery for you, read on, this article may help…
One of the attributes of a great company is its ability to execute against a good strategy. Few things are as critical to a company’s success (especially if it aspires to become large and publicly traded one day…) as being organized and having discipline so as to be consistently meeting and exceeding sales forecasts. Being able to be highly accurate in predicting revenues, margins, and operating profits is a key differentiator for well run companies on both private and public equity markets. To forecast accurately there are several elements that must be in place:
- Cadence: The pipeline must be updated regularly, figure out the timeframes that work best for your organization given your current circumstances, and update the forecast monthly, bi-weekly, weekly, or daily. Realize that sometimes your cadence needs to increase depending upon your position in the current financial quarter or month.
- Discipline: Your compensation plans and company culture must support strong behavior from the sales team to drive accuracy in the pipeline forecast. No tolerance for sandbaggers or for the eternal optimists who go soft at the end of the quarter (and surprise management negatively by losing deals that were committed previously)…
- Good pipeline forecasting reports must have: Deal details, registration status information, Products and Services to be sold, next step to win deal, % of likelihood to close, and expected date sale will close.
- Your sales team must believe in the ultimate goal or accuracy, and demonstrate ownership mentality, such that if a deal slips from the current commitment or is lost outright, they must go find another one to work to regain the lost ground, so the commitment is still fulfilled.
- Wins and Losses must be documented and analyzed to learn why your team lost, so you can win the next time based upon the learning from a loss. Wins must be analyzed so best practices can be discovered, and replicated and institutionalized into recruiting and onboarding and ongoing training of the sales team.
- Win percentages should be tracked and an algorithm developed to allow you to Tier your forecast where at least three, and perhaps four tiers (Suspects, Prospects, Qualified Candidates, Finalist) can be used to track a deal moving from a lead (suspect) along the continuum to prospect (10% likely) to a Qualified Candidate (50/50 likely) to a Finalist (90% Commit) to a won deal.
If you get scientific and build a great pipeline forecast tracking system (keep it simple, complicated is destined for failure, simple is destined for success) into your CRM environment, you can become a leader and avoid disappointments as your company grows and takes market share from the competition. I wish you the best of luck closing out your year!
Michael Beach is an award winning coach who works with Account Executives from all over the United States to refine their goals in their territory and find creative strategies to deliver stronger revenues and margins to their teams. Michael’s coaching with those sales people often leads to extraordinary results, with margin contributions increasing year over year by 50-200% for Account Executives who apply themselves and invest in becoming stronger. If you’d like to speak with Michael about working with your Technology Sector sales team to deliver more ambitious results in 2017, send an email to firstname.lastname@example.org. Michael Beach Coaching & Consulting, “Delivering Ambitious Results”
Join us in Burnsville MN for our next Networking Book Club this Friday, November 18, 2016 by sending us an email at email@example.com. The first 5 people to sign up will receive a FREE Michael Beach Coffee Mug.