...About Their Sales Forecasts and Pipeline Reports
Many CEOs we work with either don't pay close attention to the sales pipeline reports they get from their sales managers (because it's rarely accurate) or ignore pipeline reports and sales forecasts completely (because they've lost faith in the accuracy of the reports, the sales manager who put them together, or both).
We work with middle market and large corporate clients in a wide variety of industries - selling different products and services, to different target markets, with different sales cycles, at different price points, with varying levels of complexity and competition, and several other important differences. And yet, nearly every CEO we work with has similar issues and challenges when it comes to the accuracy and rigor applied to the data tracked in the sales forecasts and pipeline reports they get from their sales managers.
With just a little bit of attention, these same CEOs could have a significant impact on increasing revenue, improving profit margins, accelerating sales cycles, improving accountability, and increasing forecasting accuracy.
How? By putting some focus on these common sales pipeline challenges companies face.
With that in mind, here are six (6) questions your sales managers hope you won't ask about their pipeline:
- How long has each opportunity we are tracking been in our sales pipeline?
- What would the total value of our pipeline be if we eliminated each opportunity that is older than X months?
- Under ideal circumstances, how much time should it take for an opportunity to move through each stage of our sales cycle?
- Have we defined the committments we need from the prospective customer at each stage of the sales process so we can confidently move an opportunity to the next step?
- When an opportunity gets stuck at a particular point in the sales process, what coaching feedback are you providing the sales person who is responsible for that opportunity?
- How many opportunities should each salesperson on the team either move forward in the sales process or eliminate from the sales pipeline every week.
In our experience working with middle market and larger corporate clients, too many CEOs ignore the pipeline reports they receive from their sales managers. Not enough CEOs ask these types of challenging questions to hold sales managers accountable. Worse yet, some CEOs we know ignore pipeline reports and sales forecasts all together and instead rely on backward looking reports such as orders shipped. It's easy to understand the frustration that leads to this approach - a shipping report is a lot more accurate than a sales forecast - but what does it accomplish?
Your sales pipeline report should be the single most accurate predictor of future revenue in your company - and it almost never is!
What can you do about it? Three things:
1) map your sales process;
2) implement an easy tool to track each opportunity every step of the way; and,
3) hold your sales managers accountable.
You may think you're already doing these three things. Chances are you are not. And it's easy to find out - just ask your sales managers the six (6) questions we shared above.
If you're not satisified with the answers you need to make the decision to do something about it.
What would happen to your planning process and decision frameworks if you actually believed the sales forecasts and pipeline reports your sales managers shared with you?
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