Are your sales pipeline conversations driving results? For most staffing companies, the answer is no. The reason? Most staffing organizations and their sales managers mistake sales revenue forecasting with sales coaching, and coaching sales reps to their sales pipeline.
Every day, in practically every staffing company, managers meet with their teams to review their "closest to the money" job orders in which they discuss the likelihood and timing of deals closing. Sales managers believe these are productive sales coaching sessions that impact results but the reality is, they're nothing more than administrative data-gathering sessions. They have little impact and do nothing to improve the effectiveness of the sales rep.
Having a healthy sales pipeline including a sales process to track and measure the sales pipeline, is key to sales rep productivity and meeting sales quota. Unfortunately most sales managers miss the coaching opportunity to improve sales rep performance because their conversations get fixated on sales revenue forecasting instead of coaching sales reps to their sales pipeline. Here’s the difference:
|Sales Revenue Forecasting
||Sales Pipeline Coaching
|Managers inquire about deal size, dollar amount, expected close date, next steps.
||Managers are leading with questions to understand to understand what the seller's plans are for moving the deal forward, seller activities, buyer activities. Managers seek to understand progression and sticking points and empower their sales reps to self diagnose.
Coaching sales reps to their sales pipeline is one area in which sales managers can make a huge impact on sales rep productivity and sales quota attainment. Coaching sales reps to their sales pipeline means that the sales manager is providing opportunity specific coaching. The coaching is focused on helping sales reps convert opportunities from the current stage of the sales cycle to the next stage of the sales cycle. This type of coaching clearly impacts the bottom line. To back that up, research conducted by the Sales Management Association revealed that companies that train their sales managers on pipeline management had 9% greater revenue growth than those that neglected to do so. These high performers also know that the the first step to effectively coaching sales reps to the sales pipeline begins with building a buyer aligned sales process.
What Does a Healthy Sales Pipeline Look Like?
To determine what a healthy sales pipeline looks like you can ask yourself the following questions.
Total Revenue Value
What is the total revenue value of my sales pipeline? As a general rule sales reps should maintain a sales opportunity pipeline of at least 2.5X's their quota. Why? Because sales reps are not going to close every deal. To ensure you don't have a shortfall at the end of the year sales managers need to work with their reps to make sure the total pipeline value is large enough to account for lost and cancelled opportunities and those that were poorly qualified.
Total # of Deals
If my sales quota is $1M and I have four deals in my pipeline, each worth $500,000, that is not good. Why? I would have to close 50% of my deals. I'm not opposed to risk but that doesn't mean I like taking on unnecessary risk either. High performing sales organizations have a sales win rate between 35 and 40 percent. Sales reps should make sure that they have enough deals in their pipeline so that when a few of their deals fall through-and they will-they still have plenty of other opportunities currently in their pipeline that can make up for the loss.
Notice the key words in the last sentence, currently in their pipeline. You don't want to be sucking wind and playing catch up all year by trying to add enough new deals to the pipeline to make up your delta. This leads me to my next point. A healthy sales pipeline has revenue distribution across many deals and stages, not concentration on just a few deals and/or withing just one or two stages.
Having a large pipeline with many different opportunities is great just so long as those opportunities have real genuine integrity behind them. Sales managers need to coach reps to ensure there is integrity behind each opportunity that goes into their sales pipeline. What is the target market for the opportunities and customers you're trying to attract? How well aligned are the opportunities in your pipeline with the capabilities of your delivery team? If you are adding opportunities to your pipeline that your delivery team has had little success or experience with than the likelihood of you closing those deals diminishes. And keep in mind that the overall quality of a sales pipeline quickly diminishes when sales reps frantically try to add enough new deals at the end of the quarter or year to make quota. They just toss anything in their sales pipeline to make it look good. Managers, don't let this happen.
By velocity I am referring to movement. Are your deals moving and progressing through each stage of the sales process or are they getting stuck and bogged down? If you have deals that have been sitting in the same stage for days or weeks than this is a perfect opportunity for a coaching conversion. For example, the sales manager could ask their rep, "why do you feel the opportunity has stalled?" Or "what have you done to try to get the opportunity moving again?" "What are our options for getting this opportunity moving again." Take the time to hear your sales rep's perceptions of what they think is going on and what they think they need to do to move it forward before offering your opinion and advice.
Sales Pipeline Coaching
Now that we know what a healthy sales pipeline looks like let's talk about how to provide sales pipeline coaching.
According to research by the Sales Management Association, companies that spend at least three hours per month coaching their reps through their sales pipeline had an 11% revenue advantage over those that didn’t. If that doesn't compel you to coach your reps more frequently I don't know what will.
They key however is your sales pipeline coaching sessions need to be just that. Coaching. Not a badgering session where the manager pushes the rep for a sales forecast and not a data quality review where the manager simply asks the rep for an update on each opportunity.
Early Stage Sales Opportunities
Its natural to want to focus on late stage opportunities or opportunities about to close but I suggest you start with early stage opportunities. Why? Two reasons. First, the greatest coaching opportunities-those in which coaching can have the greatest impact- lie within early stage sales opportunities. The reason is early stage opportunities possess the greatest opportunity to be influenced where as late stage deals don't offer that opportunity because the customer is already too close to making a decision. Early stage opportunities simply have more time associated with them before they will close. That is time for you and your rep to influence the customer's decision. Second, by coaching reps on early stage deals you can help them weed out weak, unqualified opportunities and cultivate the right strategy for the qualified opportunities.
Focus on Only Few Deals, Not Every Deal
When I first got into management and started doing sales pipeline coaching with my reps I just assumed that I had to get through every opportunity in the pipeline in every meeting. Soon I discovered that this was a total waste of time. The focus of the meetings became more about quantity and only scratching the surface on all deals and less about the quality of the coaching and making an impact. Instead, only focus on a few deals in your coaching sessions but make sure you do a deep dive into those deals. By doing a deep dive you should be digging into exactly what the rep is going to say and do to compel the client to take the next step in the sales process. You should also play out scenarios with your rep to ensure they're prepared to handle customer objections, competitive threats and other customer curve ball questions. In short, don't skip over the details. This is where deals are won and lost.
Coach More, Scrutinize Less
A common pitfall sales managers run into when facilitating a sales pipeline coaching session is they focus on the past instead of coaching to the present and future. For example, sales managers will often focus on asking reps what events have transpired with the opportunity up until that point in time and then they tell the rep what to do next. This is not coaching. Remember, managing is about directing and telling people what to do where as coaching is about empowering people, exploring the possibilities and looking into the future. Be sure to coach your reps on how they are going to handle their upcoming meetings or calls with their customers in order to compel them to take action and ultimately make a final decision.
How are you coaching your sales reps to their sales pipeline? Let's start a conversation. Please share your thoughts in the comments section below.
If you want to improve sales performance, download the free eBook titled "The Definitive Guide to Building a Buyer Aligned Sales Process."