Sales Pipeline Management: A fundamental discipline

Many successful sales organizations share at least one common trait: They work hard at establishing the sales processes that allow them to increase the predictability of their sales teams as an engine of growth for the company. It’s more evident now, when we look at the complexity of today’s sales environment. Competitive pressures, need for value creation, the new buyer journey, etc. means that even more rigor and structure, supported by technology, needs to go into the selling process. This post walks through what I consider the 4 essential sales processes and the one that glues them together.

The Fundamental Four

There are four fundamental, interconnected sales disciplines that every company dealing with complex sales must have:

  1. Account & Territory Planning

  2. Forecast Management

  3. Opportunity Management

  4. Pipeline Management

These are all core to every sales organization to improve quota attainment and achieve their strategic sales objectives, but each of these require a significant effort to land and even more so to sustain over time.

 In future posts I’ll share my experience in building the first 3, but today I want to make the case for number four: Pipeline Management and how that one alone can be the cornerstone that helps pull the other 3 together and simplifies the landing and sustain over time.

What is Pipeline Management

One analogy I like to use when describing Pipeline Management is to think of it as the checkup you would have with your general practitioner (GP). It’s a broad assessment of your health, covering end to end all aspects, i.e. a 360 degree view of your health. If anything abnormal shows up, then often that requires a follow-up with specialists, more exams, etc.

The critical point here is that by looking at all aspects of your health, the GP you can quickly assess and check/understand potential relationships with other areas and/or anticipate health challenges along the road.

Similarly, Pipeline Management is that high level, but fundamental, checkpoint of the health of your pipeline. A comprehensive pipeline management process covers everything from data quality, to short term current pipeline issues, to coaching that impacts long term the performance of a seller. From that discussion, a deeper discussion of an opportunity could be required (Opportunity Management), a refinement of an account plan (Account Planning)  or feeding insights into the forecast (Forecast Management).

The benefits of Pipeline Management

 A proper Pipeline Management (PM) process can help sales organizations drive revenue growth, improving forecast accuracy and customer relationships by:

  • Increasing forecast accuracy to CRO/CFO: By uncovering opportunity risks in current and future periods and make clear forecast judgement. In addition, an established PM process helps Sales leaders to effectively time when to run opportunity reviews to feed the Forecast Management process and understand low performers.

  • Learning from past failures and successes: Gather lessons learned and best practices from lost and won opportunities to coach sellers in how to accelerate active opportunities, help them to fill the pipeline and coach them in effective negotiation to win. One common mistake is failure to really qualify opportunities. Focus needs to be on recognizing customer pain points, budget availability and connecting with power sponsors to control the customer buying process thru the sales cycle and this can be coached and inspected in pipeline reviews.

  • Sustaining adoption of the sales methodology: Identify challenges in sellers not following adoption the agreed sales methodology and help tweak and adapt it over time.

  • Identifying new potential customer opportunities: Understand dormant customers that bought in the past as well as highlighting new accounts without selling activities that require deeper Account Planning by doing a gap analysis of current and past opportunities versus existing customer initiatives.

  • Understanding customer feedback:  A solid pipeline management process challenges sellers to go deep in understanding customer pain points and initiatives that can become real opportunities. This is input for Product Groups to prioritize their offerings and for Marketing to tweak the customer journey.

  • Improving sales productivity: By having a prescriptive PM process which allow Sellers to invest more time with customers rather than following internal randomization and frustration.

  • Supporting proper quota setting: Support Sales Operation and Sales Executive to set achievable quota for every seller, and to rethink the right sales model (number of sellers, type of role, organizational structure and quota setting). It helps to optimize the cost of sales and define the right target for the company.

  • Improving CRM data quality:  Last but not least, a pipeline management process should aim improve data quality over time ensuring Sales people and others collaborators reflect accurate customer and opportunity data. This helps mainly opportunity management, but impact other core processes as well. This is one of the biggest challenges of any business management process, Sellers often don’t have the discipline to reflect accurate customers and opportunities into the CRM because they don’t have a tangible benefit beyond management control. The dilemma becomes a chicken-and-egg one, leaving this in the bottom of the priority list for Sellers and Sales Managers. Fixing and sustaining data quality requires both an organizational commitment and the discipline through process and proper metrics .

The Pipeline Management discussion, becomes that glue to ties in the other three components. Many companies often solely focus on Opportunity Management, given the pressure on short term commitments it’s easy to default to looking at deals about to close. While it is fundamental to do Opportunity Management, on its own, it can provide a very myopic view, making it difficult to see the complete diagnostic and broader trends impacting long term.

Establishing the discipline

Landing all four processes from scratch can represent a significant change management effort that can be difficult for many companies, however, it’s important to make strides in building this structure as there is plenty of evidence that these processes make a huge impact in sales performance.

By providing guidance and being very prescriptive on how to run these pipeline reviews (i.e. what agenda, cadence and data), and driving the discipline around tracking follow ups you can start landing the pipeline review process (read some tips here).

Once there is a basic process in place, the critical issue is how to sustain it and continue to refine it over time. It becomes vital for the sales leadership and sales operations to measure how processes are being adopted, which is hard to do without the right tools often relying only on the anecdotal experience as told by Sales Managers. Tracking adoption and sustainability will help you to decide when to move to the next level of mastering these disciplines and allow you to see the correlation and impact of the discipline in the performance of the sales team.

Michele Lanzara is CoFounder of Convercio

Michele Lanzara is CoFounder of Convercio