In previous posts, I have discussed the importance of establishing a strong Inspection and Coaching rhythm between frontline Sales Managers and their teams. There is plenty of evidence that shows having a structured process can contribute to improve performance.
These discussions can have different objectives: For example, Sales manager mainly focus theirs on forecast management effort because they want to be accurate with their commitment to the CFO and Execs, but they may also mix this with more detailed coaching on a specific opportunity to help Sales Reps overcome obstacles and close important deals.
It can be overwhelming for Sales managers to establish a discipline that allows them to be in control of their business and minimize the randomization between reporting to the executives, dealing with customer issues and coaching their people.
This guide will help you to structure the key elements of a well-defined discipline of business management in your Sales Organization.
There are three major processes that typically get confused among Sales Managers, Sales Operations, Executives and Sales reps:
- Forecast Management: the main purpose is to set performance expectations with the executives and finance by assessing the commitment level from the Sales managers to close specific deals versus the budget in the current and next fiscal period. This commitment level will be defined by the risk of opportunities to close in a certain date with the suggested amount according to the number of day remaining in the period and the sales stage of that opportunity.
- Opportunity reviews: This is a meeting that Sales manager schedules with the account team and other supporting people in the company to review the close plan of any key opportunity and brainstorm ideals and coach sellers in how to unlock obstacles that will help them to move the opportunity to the close stage. Typically, they invest 45min to 1 hour to go over the agenda and strategy the opportunity plan. This should be led by the Sales Reps with the endorsement and guidance of the Sales manager. Sometimes, the Opportunity Review becomes so complex that can overlap with the account planning process.
- Pipeline Management: The purpose of this effort is to drive improvement of the portfolio of active opportunities with actions that the Sales Rep can take to close the gap versus the quota. This process uses key leading indicators (velocity, volume, data quality, predictability) to inform future performance of the team and to validate the Sales Manager forecast.
Based on industry best practices, this table can help you to set up the right business management framework in your Sales organization:
Sales Managers focus naturally on Opportunity Reviews, it's well in their subject matter expertise (~70% of Sales Managers are promoted within the organization) and they can produce very tangible results. Forecast management on the other hand, is usually a top down discipline they have to manage to.
The challenge often is Pipeline Management which is arguably a process intrinsic to the sales manager, and while the outcome provides immense value to the organization manifested in forecast accuracy, the process itself usually is not cascaded top-down.
In addition, this is one discipline new front line managers didn't have as a sales rep and many tend to assume, incorrectly, that shifting more energy to opportunity management can produce the same outcome.
They all work together
During the pipeline discussion, Sales Managers inspect the activities to validate the sales stage and coach sellers in how to remove obstacles toward a closing stage finally documented in the close plan.
Then, during Forecast management, Sales Managers use the close plan to assess the risk of the opportunity against previous forecast and/or budget to set the commitment level in every deal, for example, committed, upside and uncommitted.
Opportunity review is the lowest level of inspection at the opportunity level vs portfolio level in the pipeline management, and this is needed to help Sellers in key deal out of control.
As a cornerstone process, a well established pipeline review process should make the forecasting process a lot easier and accurate and should also bubble up the need for further opportunity reviews.
As you can see, these three process are critical in your sales management efforts and by establishing a discipline, executing these three following a weekly, monthly and quarterly cadence will empower sales managers to be ready for Quarterly Business Reviews and Planning meetings.