This article takes you through 5 crucial tips to efficiently manage your sales pipeline. Before we jump right in, let’s define what a sales pipeline is.
A sales pipeline is a systematic and visual representation of your sales process. Based on how your buyer journey looks, example, Awareness, Interest, Decision, and Action, your sales pipeline stages may also vary.
With effective sales pipeline management, you’ll be able to predict how much revenue your team brings in each week, month, quarter or any given period of time.
Here are 5 tips to create a profitable sales pipeline:
- Reverse engineer the number of opportunities your reps need to hit quota.
- Set up your CRM reports and dashboards with the right metrics and triggers.
- Review your team’s pipelines at least once a week.
- Commit to forecast opportunities for the week/month/quarter.
- Ensure your reps take ownership for their individual sales pipelines.
Tip 1) Reverse engineer the number of opportunities your reps need to hit quota
The first step to manage your sales pipeline is ensuring that there is enough velocity at the top of the funnel. For this, these sales pipeline metrics must be at your finger tips:
- Total number of deals in your pipeline—how many open deals do you have?
- Average size of a deal—what’s the mean value of each deal?
- Win rate—what percentage of these deals do you close?
- Sales velocity—how long are these deals in your pipeline?
Have you worked out how many new opportunities each rep should be producing every day/week/month/quarter to hit their target?
Assuming a rep target is $30,000/month in revenue and the average deal value is $2,000, that means they need to close 15 deals/month.
With a win rate of 20%, how many opportunities should they be generating each month?
The answer is 75.
Now you have determined this number, you need to make sure the reps understand that this will measured as a KPI. Ensure it’s trackable on their CRM dashboards and gamification screens etc.
Generating new business opportunities is arguably the most important activity that a rep should be doing on a daily basis.
Reps assume that just because they have 30 opportunities in their pipeline that means they have 20-30 solid deals. Unless you’re an absolute wizard this is unlikely to be the case.
For instance, if your reps’ average win rate from opportunity to close is 20% that means for every 1 opportunity your rep closes, you need to assume four others in their pipeline are dead.
Most sales managers don’t recognize this and assume that just because their reps have 30 opportunities in their pipeline they can work intently on these and forget about generating new business opportunities.
- Stay on top of your sales pipeline metrics.
- Assign individual KPIs for your reps based on these metrics.
- Prioritize generating new opportunities over anything else.
Tip 2) Set up your CRM reports and dashboards with the right metrics and triggers
Set up your sales pipeline widget—this way you can see:
- % of opportunities in negotiation
- Demo turnup rate
- Proposal send date
- % of opportunities that have a quote
- Followup task for each opportunity
- Age of the opportunity (sales velocity)
- Average number of activities per opportunity
This widget is absolutely valuable when it comes to pipeline management!
1) % of opportunities in negotiation:
For instance if you only have 50% of opportunities in negotiation, and the rest in discovery and demo booked, it’s obvious your reps need more training on the discovery call process since the opportunities aren’t progressing to a demo or quote.
2) Demo turnup rate:
Keeping tabs on the demo turnup rate is also important to identify where your leaky bucket is. The other reason could be inexperienced reps quickly converting leads to opportunities without proper qualification, just to bolster numbers.
You can quickly look into this by listening in on a few calls associated with these opportunities and double checking the quality of the discovery call.
3) Proposal send date:
To track when the next activity was completed or booking, viewing the date when the proposal was sent is key.
If we go through a rep’s pipeline and see that a proposal was sent to an opportunity and the follow up was booked only 5 days later without any explanation such as a board meeting to decide on approval, we can quickly jump on the opportunity and call them back to try and get a decision quicker or uncover any potential objections.
4) % of opportunities that have a quote:
Another metric I have on a different widget shows the % of opportunities that have a quote, broken down by rep.
In my experience, you always want to be having at last 65% of opportunities getting a proposal, otherwise how does the customer know your pricing?
Obviously this doesn’t mean sending out a proposal randomly to every opportunity! The goal is to have a discovery call, where you uncover a business case for your product and follow up with a proposal right after.
5) Followup task for each opportunity:
It is absolutely essential that every opportunity has a future task or next step associated with it in the CRM.
If your reps aren’t adding a next step to an opportunity, the deal is as good as lost! To make it easier to view “at risk” opportunities, we designed a dashboard for both the managers and all the reps individually so that they there’s quick visibility into any opportunities without a next step.
6) Age of the opportunity (sales velocity):
The age of the opportunity is another crucial indicator of whether or not you’re going to close.
If the average age in the negotiation stage is 10 days but the opportunity has been sitting there 15 days and there are no notes detailing the decision-making process, and the customer isn’t picking up the phone, it might be worth sending a personalized email! Using a video message is a good example of how to do this.
7) Average number of activities per opportunity:
With this metric, you can easily see which opportunities haven’t had enough attention and probe into why.
It could be that the customer doesn’t need a call until Q2 and there are notes on the account pertaining to this fact. Alternatively, it could be that it’s merely been forgotten! In which case, as a manager, you can jump on this “at risk” opportunity and ensure it’s followed up on.
Tip 3) Review your team’s pipelines at least once a week
Once you have the right metrics and triggers in place, it’s essential that you sit down with each rep at least once a week to question every opportunity in their pipeline.
Pay special attention to those opportunities which seem to fall behind your typical sales velocity in each stage. These will stand out because of the fewer number of activities and future tasks associated with it.
Using a weekly activity tracker software like LevelEleven in combination with the above pipeline reports lets you assess if a rep is ahead of or behind on opportunity generation.
You can also assess the health of your larger sales pipeline based on these metrics and triggers. Doing this first thing on a Monday morning is best and will give each rep a clear focus for the week.
Each review with a rep may take an hour and the whole process might spill over to Tuesday. As long as it’s done consistently on a weekly basis, it can free up your remaining time to listen in on calls and influence the sale.
- Set up weekly meetings with reps to assess individual sales pipelines.
- Monitor the larger sales pipeline based on the metrics and triggers you track.
Tip 4) Commit to forecast opportunities for the week/month/quarter
Once you have a good understanding of your team’s pipeline and have confidence in the status of each opportunity, you can start committing the opportunities which have the likelihood of closing within your next targeted period.
Assign a close date to each of these opportunities within your CRM. Depending on your sales cycle, have it set up to go into a weekly, monthly, or quarterly forecast.
At Epos Now, our average deal cycle is around 8 days. We thus track everything by the week and month. This means that every Wednesday, I can send the CEO an accurate breakdown of what’s coming in—usually 90-95% accurate.
Having this accurate forecast is a failsafe way of staying relatively stress-free as a sales manager since you have confidence of what’s coming in and what isn’t.
This then gives you time to find the missing money to hit quota, launch an incentive or deliver short burst training sessions to plug any areas for improvement!
Tip 5) Ensure your reps take ownership for their individual sales pipelines
Add these metrics to your rep’s dashboard:
- Opportunities with no next step.
- Overdue opportunities.
- Overdue tasks.
The number of opportunities in this report should ideally be below 20 at all times. If it goes above 20, they’re most likely switched-off inbound leads.
This accountability ensures that at least 20-30 mins each day, your reps are working on calling back ghosted and stuck opportunities or ones that don’t have a next step to try and get them back into play rather then just barrel through new leads and letting these potential opportunities go.
From a manager’s point of view, having all your reps’ metrics in one place makes pipeline management a breeze, saves you at least an hour a week, and sets you up for a more predictable, profitable sales pipeline!