Coaching Sales Reps to Their Sales Pipeline
Today’s sales manager is expected to be part sales superstar who still carries a bag and his or her own personal quota, part CFO, part trainer, part CRM/ATS expert, part “chief problem solver,” and most likely parts of a half-dozen other roles. Prevailing wisdom has always told us that if you want to improve sales performance you need to train your front line sales people. While corporate America spends hundreds of millions of dollars on sales training every year, what doesn't happen very often is sales management training.
Top performing sales reps (and Recruiters) often get the tap on the shoulder that they have been promoted to management based on their exceptional performance. But just because they’ve mastered one role doesn’t mean they’re naturally adept at leading, coaching and managing others. Sales management includes coaching, creating forecasts, running reports, holding people accountable, empowering people and a slew of other responsibilities sales reps and recruiters never have to worry about. But for some reason there is an assumption that by promoting top performers into management, they will figure it out.
I personally don't think this is true. It wasn't true for me or any of my friends or colleagues in sales who've since moved into management. And it hasn't been true for the dozens of sales reps I have coached over the years who have since moved into management. We all needed management training because coaching and developing people is a far different skill set than selling or recruiting. In fact, I think newly promoted managers from the ranks of sales or recruiting should be treated as new hires, and trained as such. My observation is that IT staffing firms spend a lot of time showing managers sales reports, metrics and other administrative oriented tasks but they don't offer much in the way of teaching managers how to facilitate a coaching session and gain genuine buy-in from their subordinates for identifying and overcoming performance issues.
That being said, one area in which sales managers can make a huge impact is knowing how to coach sales reps to their sales pipeline. 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.
What Does a Healthy 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 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. Sales reps should make sure that they have enough deals in their pipeline so that if 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 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 (because they're sucking wind and trying to play catch up because they never did enough prospecting in the first place or were poor at qualifying). They just toss anything in their 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.
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 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 their decision. Second, by coaching reps on early stage deals you can help them weed out weak, unqualified opportunities.
Focus Only on a Few Deals
When I first got into management and started doing sales pipeline reviews 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.
What is your methodology for coaching reps and gaining genuine buy-in? How do you coach your sales reps to the stages of your sales funnel? Let's start a conversation. Please share your thoughts in the comments section below.
About Dan Fisher
Dan Fisher is founder and owner of Menemsha Group, a provider of sales enablement solutions dedicated to helping IT staffing firms improve win rates, shorten their sales cycle, and increase revenue per sales rep. Since launching Menemsha Group in 2008, Dan has consulted with over 200 IT staffing firms and has invested over 5000 hours coaching IT staffing sales reps. He’s authored is his own proprietary sales methodology and has previously spoken at Staffing World, TechServe Alliance and Bullhorn Live 2012. Prior to launching Menemsha Group, Dan spent 16 years in the IT industry running local, regional and national sales teams. Dan worked for Kelly Services, Oracle Corporation and Alliance Consulting. Dan currently resides in Boston, Ma.