How well is your company managing its sales pipeline, and does it really matter? According to new research from Vantage Point Performance and the Sales Management Association, 44 percent of executives surveyed reported that their organizations were ineffective at managing their companies’ sales pipeline. (The execs were from 62 business-to-business (B-to-B) companies, 39 percent with revenue greater than $1 billion and 37 percent with revenue greater than $250 million.)
This gap in effectiveness may matter more than you think because the research also found that companies reporting effective pipeline management saw revenue grow 15 percent faster than their ineffective peers. What’s even more interesting is that companies that mastered three specific pipeline management practices experienced 28 percent higher revenue growth.
Below we’ve outlined what our research pinpointed as those three pipeline management best practices for all-star performers:
1. Clearly define the sales process.
At its most basic level, the sales pipeline represents your company’s sales process and how your company tracks progress through each stage of the process.
Pipeline management includes everything from the way the sales pipeline is designed to how it is measured and how it is used to drive sales-rep performance. Without a clearly defined sales process, the pipeline has no foundation. We found that sales forces were most effective at managing their pipelines if they invested time in defining a credible, formalized sales process. In fact, there was an 18 percent difference in revenue growth between companies that defined a formal sales process and those that didn’t.
This begs the question — what specifically does a “formal sales process” mean? For starters, it means having clearly defined stages and milestones universally understood by your salespeople. If your sales team has to guess where a particular deal belongs or how to manage deals in each stage, you likely don’t have a formal sales process. In addition, your sales process should align with how your customers move through their buying process. Don’t fall into the trap of using generic sales processes that may not reflect your customers’ actual buying process. Instead, invest time in developing a unique process that reflects the reality of your sellers, and make sure your sales force understands how to use it.
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