Over the past three years, my team and I have been researching the top challenges for enterprise sales management effectiveness. After surveying an average of 106 North American sales executives each year, we clearly identified the biggest challenge: sales pipeline optimization. In an age of social media, analytics, and Big Data, our study revealed that while most companies have invested in salesforce automation tools, training, and analytics, they still have significant “room for improvement” in several key areas including the following:
- lead generation strategy and tactics
- online conversion architecture
- salesforce consulting skills and competencies
- access to the right level within the customer organization
- forecasting accuracy
- responsiveness to custom RFPs
- performance versus process metrics
- creativity in sales and solution creation
Best Practices for Sales Pipeline Optimization
The larger the enterprise, the more complex the challenge. While automation and cloud-based tools have revolutionized the process management aspect of sales pipeline management, the startling truth is that the pipeline itself is far from optimized. Our research showed that enterprise sales leaders managed three simple criteria:
- Size of pipeline
Are there enough deals in the pipeline to cover the sales quota?
The size of the sales pipeline is dependent on the number of leads converting into sales opportunities through the direct efforts of sales reps as well as contributions made by marketing-led activities. The size and quality of data in the prospect or contact database is crucial to effective lead nurturing. The leaders were skilled at creating impactful and engaging campaigns using most efficient channels to drive appropriate numbers of “unqualified leads” into the “top of the funnel.”
Both sales and marketing teams must establish joint targets by asking:
- What is the optimum pipeline size needed to meet sales quota?
- How many qualified leads are needed to meet the pipeline size target?
- How many unqualified leads are needed to meet qualified lead target?
B2B companies with effective marketing organizations should aim to drive 50% of sales pipeline deals through marketing-led efforts.
- Quality of pipeline
Just how good is data quality?
Having a large sales pipeline is not enough to meet sales quotas. An optimized sales pipeline needs both the right amount as well as the right quality of sales opportunities:
- Garbage-in garbage-out. The quality of sales pipeline starts with creating opportunities with good quality leads. The level of lead qualification conducted before leads are converted into sales opportunities determines the quality of leads going into the sales pipeline.
- Maintaining quality is key. Maintaining a high quality pipeline at all times requires using an effective sales methodology based on industry expectations, what you are selling, why you are selling and who you are selling to. Additionally it is critical to follow a well-defined, scalable, sales process to ensure results.
- Dynamic nature of opportunities. Good sales opportunities are dynamic in nature. This means constant focus and follow-up for each opportunity to ensure they are being addressed promptly. Expectations for responsiveness are exceeded by the leading companies.
- Discipline and diligence. Finally, the quality of sales pipeline cannot be maintained unless sales reps are disciplined in diligently maintaining correct sales stages, close dates, opportunity values and bundling associated products or services.
- Ability of sales rep to close pipeline
Does the sales rep possess necessary skills and domain expertise to close the deal?
The final attribute of an optimized sales pipeline – pipeline conversion rate – is largely dependent on the owner of the pipeline – the sales representative. The success of an enterprise sales professional depends on the ability to:
- Orchestrate every sales opportunity using both selling skills and domain expertise.
- Follow the prescribed sales methodology and process, but be ready to meet new expectations and client-specific needs.
- Leverage the entire ecosystem of internal resources and the partner network, where necessary.
Building Blocks for Sales Pipeline Optimization
Well-aligned sales and marketing teams work in tandem to produce and deliver high quality leads into the sales funnel. However, in order to implement an effective, repeatable and scalable lead generation capability it is important that there is clear alignment of goals, priorities, process and metrics between sales, marketing and product/services teams. B2B companies must realize the power of alignment if they want to build strong results. This is a topic that merits a separate article, and we’ll get to it next, but this sales operations optimization diagram should suffice for now:
The checklist below provides a set of simple diagnostic questions for developing and maintaining an optimized sales pipeline:
Finally, as companies look to optimize their selling capabilities, they must keep in mind three key trends that will dictate how well their optimization efforts will payoff:
- Informed buyers: Today’s buyers are more informed than ever. This means sales representatives must clearly understand the needs of the buyers (jobs-to-be-done), present a solution that clearly articulates the value and meets those needs. They must be creative and innovative solution builders. Thought-leadership and technical leadership are both required.
- Availability of data: The volume of business data continues to mount exponentially. Leveraging the right set of customer interaction data for pipeline generation and opportunity management provides leading companies a clear competitive advantage.
- Technology: The role of technology in selling continues to grow. Companies must integrate technology and driving its adoption to maximize impact. But don’t make salespeople spend too much time on form-filling activities. They must maximize time spent engaging the customer.
Javed Matin is an independent management consultant helping B2B companies accelerate revenue growth through sales and marketing optimization. Over the past fifteen years, he has developed global sales operations programs, training and effectiveness audits across multiple industry sectors.