One question that I am often asked by sales executives, sales managers and even sales reps is: “How can I improve my sales pipeline?” This question comes up most frequently at the end of the quarter or year, when sales professionals have often realized that they are not where they want to be relative to their goals. Many will have even started to answer the question themselves by coming up with “magic ratios” such as having 3x the amount they need to close in their pipeline. One VP of Sales even told me, “I just tell my guys to put more in; if there is more going in, there has to be more coming out.” If it was only that simple! There are three ways to improve your sales pipeline:
1. Improve Your Quantity:
This can mean both number of opportunities and size of opportunities. Having more in the pipeline can often lead to a better result. However, Quantity can be a little misleading. Having a large number of opportunities enter your pipeline, but having very low Quality opportunities will reduce your win rate, and prevent you from hitting your target. Also, having a large dollar volume concentrated in a few opportunities can create a risky pipeline, again reducing your win rate. From a management standpoint, Quantity is the easiest area to measure. A quick look in your CRM system can tell you everything you need to know about Quantity. This assumes that your information is accurate, which is a whole other topic….
2. Improve Your Quality:
This refers to how qualified the deals you are bringing into the pipeline are. All things being equal, if you have the same number of opportunities coming into your pipeline, but improve the Quality of opportunities, then you should see an uptick in win rate, which will positively impact your results. From a management standpoint, defining opportunity Quality scoring criteria can be massively helpful in measuring/tracking Quality.
3. Improve Your Velocity:
This refers to your average sales cycle, or the typical amount of time it takes an opportunity to move from entering the funnel to closing. If you have the same Quantity and Quality of opportunities, improving Velocity will help you to move opportunities through the funnel faster, which can be especially important at years/quarters end. From a management standpoint, the key thing to be tracking is the average time that it takes opportunities to close and what actions can be taken to speed that cycle. If you want to get an even further look up into your pipe, you can even track how quickly opportunities are moving from stage to stage earlier in the sales cycle, as this can often be a ‘leading’ indicator for Velocity.
One item to note is that in order for all of this to work, your company must have a clearly agreed upon and adhered to sales process and regular manager coaching on pipeline building and advancement. Without this foundation, it will be impossible to drive improvements in Quality, Quantity or Velocity. By focusing on these 3 elements of effective pipeline management, you can ensure that you build and maintain a strong, healthy pipeline that will enable you to deliver great results every quarter and every year!
Written by: John Thackston | 3 Ways to Improve Your Sales Pipeline