A blog post by Dr. David Kirk, CRO, CloudAppsWho doesn’t want a clean and healthy sales pipeline? I don’t think I have ever met a sales rep or a sales leader that would say ‘no thanks’ to that!
Unsurprisingly, there are a dizzying array of offerings available that promise to deliver exactly this. From sales methodologies to sales courses to sales consultancies. The sad reality is the money and time sunk into these is often completely wasted.
The even sadder reality is the solution to the problem is in fact pretty straightforward. We just haven’t had the technology to deliver it. Until now.
Let’s break the problem down…
It probably has five to seven stages – at most ten (if yours has any more than that, I seriously recommend reading the link above!)
It might look something like this:
Stage #1 - Prospecting
Stage #2 - Qualification
Stage #3 - Needs Analysis
Stage #4 - Value Proposition
Stage #5 - Negotiation
Stage #6 - Closed (Won/Lost)
Ok, this is a good start. But there are really two fundamental flaws in the way we manage and motivate our teams to drive their deals through the various stages of our sales process. Or more importantly the emphasis we place with the rhetoric and rewards that we use.
Let’s take a closer look…
Problem 1 – The way we measure and motivate our sales team:
The first problem lies in the way we measure and motivate our sales teams. Selling has always been a numbers game. Every sales organisation keeps track of a certain set of numbers. And it’s oh-so-easy to obsess over the obvious numbers, like monthly or quarterly revenue.
However, all these numbers give you is the “final score,” without telling you anything about how your team played the game.
If you really want to improve the way your team plays the game and boost the score in the future, you need to be paying close attention to an entirely different set of numbers. Namely, the Key Performance Indicators (KPIs) that measure how well each member of your team is actually playing.
The KPIs that represent the final score are known as ‘lagging indicators’. This is because they are rearward-facing. The problem with them is - once you have the score, the game is over and there is nothing at all you can do to affect the result.
Lagging indicators include measures such as:
Sales revenue attainment
The KPIs that measure the way your team plays the game are known as ‘leading indicators’. These KPIs are forward-facing. Tracking performance against these metrics, however, will have a significant impact on the outcome of the final score.
Leading indicators include measures such as:
Book 5 exec-level meetings per week
Create 30-leads per week that match the buyer persona
Convert inbound leads within 24-hours
Make 20 meaningful calls per day
4-Hours talk time per day
Create 5 pre-pipe opportunities per month
Send 30 BASHO emails per week
Issue 20 proposals per month
Yet, we persist with a maniacal focus on revenue attainment alone. A measure solely focused on the very final step of our sales process. What about everything that comes before that step?
Leading KPIs span each stage of your sales process. They are the high-value sales behaviours that lead to the final stage. It stands to reason that measuring and motivating more of them will lead to a higher revenue attainment.
Problem 2 – The sales attitude towards ‘bad’ things:
The second issue lies in the typical sales culture that has built up over years. There is a natural tendency to celebrate every win. However, when we lose it is often swept under the carpet or lost in the scramble to find other deals to cover the shortfall.
Yes, we should have a clear focus on the high-value ‘winning’ sales behaviours that span the sales process. Equally we should identify and track the careless sales habits that cause deals to de-rail.
Here are a few examples of leading sales KPIs that can be considered careless sales behaviours:
- Deals where the sales stage has moved backwards multiple times
- Deals where the next steps have expired on multiple occasions
- Deals whose close date has been in the past multiple times
- Deals created in late stage forecast categories
- Late stage deals where the deal amount is moving repeatedly
- Leads that remain unqualified for more than 24 hours
- Forecast deals where a new competitor is added
The key to unlocking a clean and healthy sales pipeline lies in the ability to track leading KPIs (or sales behaviours). These behaviours span the stages of your sales process. They are the measures of how your team is performing during the game.
Ultimately, they are the positive (high-value) sales behaviours you want to promote more of and the careless behaviours you should seek to eliminate.
And this is precisely what SuMo is delivering for our customers. The results? Vodafone increased its sales productivity by 187%. Qlik grew pipeline opportunities by 140% and increased lead response rate by 230%. Not bad, eh?