SalesTraining
Ever wondered how to make sales forecasting more accurate? It’s a common question among sales leaders. The answer seems simple, but, in reality, it’s quite challenging.
So, what’s the problem? The dots aren’t connected. Sales managers struggle with accurate forecasts because the sales pipeline process isn’t integrated with the sales process. Companies often implement a sales pipeline without considering the essential activities that happen during the sales process.
What does aligning the sales process with the pipeline process mean? Most pipeline processes use terms like Stage 1, Stage 2 and Stage 3, but these terms aren’t universally defined. For one sales rep, Stage 1 might mean identifying potential customers, while for another, it means understanding the customer’s needs. This lack of common understanding leads to poor forecasting and underutilized sales management support.
Some top companies in LTEN are getting it right. These companies define each stage in the pipeline process and establish key milestones for each stage. For example, a leading medical device company has a five-stage sales process:
Opportunity qualification
Need development
Solution identification
Implementation resolution
Contract confirmation
Most sales organizations have similar stages. But, once these stages are defined, the next step is to link the sales process to the pipeline process. It’s crucial to define each stage clearly.
For example, in Stage 1, steps might include identifying key players, understanding the customer’s buying process, or understanding the customers’ key goals and challenges to attaining those goals.
Establishing key milestones for each stage helps salespeople and managers communicate clearly about where they are in the pipeline. The challenge is identifying the right milestones for each stage. For example, it’s essential to understand who the key players are and their roles early in the sales process to develop an effective strategy.
Integrating the sales process into the pipeline process has several advantages:
Clarity: It creates absolute clarity about where the opportunity is in the pipeline. If a sales rep says the customer is in Stage 3 but hasn’t met all the milestones in Stage 2, it’s clear the opportunity is still in Stage 2.
Coaching tool: It provides a strategic coaching tool for sales managers. Managers can quickly identify where sales reps need help and discuss specific steps to move the opportunity forward.
Call objectives: It allows for clear call objectives. Top sales reps always have a clear objective before a sales call. With a clear set of milestones for each stage, reps can develop a call plan to achieve their objectives.
Shortening the sales cycle: Top sales reps drive the customer’s buying process rather than reacting to it. Establishing key strategic milestones at each stage can help customers make decisions more quickly.
Forecast metrics: It creates reliable forecast metrics. When each stage of the pipeline is managed rigorously, companies can measure success rates and improve sales forecasting.
The medical device company mentioned earlier established a rigorous process to forecast opportunities based on pipeline milestones. They found that when an opportunity entered Stage 3, there was a 78% chance of winning the business. When it moved to Stage 4, the chance increased to 86%. This improved their sales forecasting and helped manage product manufacturing more accurately, reducing inventory and shipping costs.
In the fast-paced sales world, providing your team with an effective pipeline process is crucial for success.
Steve Gielda is co-founder of Ignite Selling. Email Steve at sgielda@igniteselling.com or connect through https://www.linkedin.com/in/sgielda/.
