In the recent study, Sales Management Optimization, CSO Insights found that most Sales Managers know what to do, but they are having a hard time performing. The study gathered data on over 100 metrics to try and identify sales management best practices. Here is a chart of the top 10 best practices participants identified, and how they perform against them.
This chart not only shows what you should be doing, but it emphasizes what you need to do better and the relationship between the practices. For example, the first item “dynamically detect changes in the current pipeline/forecast” directly affect the success of other practices.This next chart shows win, loss and no decision ratters for forecasted deals in 2006 and competitively in 2010. As forecasted deals, these are opportunities that sales have moved into the pipeline and committed to close. These are the deals you need to have the most visibility into, since they are sales projections they should be used in other planning decisions. Since 2006, we have had a 5% decrease in close rates of forecasted deals.
The key is not just finding more deals, the key is to close more of the deals that are identified as opportunities. It sounds easier that it is (otherwise we wouldn’t be having this discussion). Jim Dickie of CSO Insights recommends these three steps to help with forecast accuracy and increased revenue.
1. Formalize the Process
If you can’t manage what you can’t see, then a good place to start is having visibility and getting everyone on the same page. For example, what is a “qualified lead” how is it defined by Sales and Marketing and how does it affect your sales / business process? What are the steps of your sales cycle? If there is no clearly defined process, and everyone has their own criteria for determining the probability of a deal closing, you have a problem, and will have little consistency or accuracy in your projections. Another study by CSO Insights found that formal process adoption has a direct impact on sales results (for the better).
2. Inspect the Process
Once a formal process is in place, it’s the Sales Manager’s duty to ensure the process is working. Many times, this means that there needs to be additional tools provided to help these managers coach, mentor, and manage by exception. Managers need clear visibility into the pipeline to be able to do this. The problem is that most managers currently either track the sales pipeline in excel, or through there CRM, and unfortunately neither of these tools are enough to provide the kind of visibility and flexibility a Sales Manager needs. It’s important to give these managers access to dynamic sales analytics.
3. Optimize the Process
Because the sales environment is so dynamic, it’s important to monitor, asses trends and make improvements to your process. To have an optimized process, it’s key to have strong Sales & Marketing alignment, along with an understanding of the consequences you face if you don’t evolve your process. Your goal should be to continuously improve your sales process, and linking compensation to this goal is a good way to get your team focused on it.
