Sales management and salespeople are challenging no matter the industry. Whether selling large ticket products and services, salespeople have a way of making the future look rosy for management. Too often, reality doesn’t measure up.
Salespeople are great at telling stories about all the great opportunities they’re working on. Most often without malicious intent, salespeople tell management what they want to hear and management believes it. Salespeople can be out of the office much of the time. Thus, they may only have a few moments to update executives on the latest news from the field. As a result, so management gets only bits and pieces.
This abbreviated communication causes the business to miss opportunities, react slowly to changes in the market, and miss revenue goals. Sales management can enable the business to see the future more clearly and build a stronger sales approach.
In businesses where management lacks sales and sales management experience, managing the sales pipeline can seem like redundant work; salespeople should be spending their time with customers. However, the benefits of creating a consistent, measurable sales management process are tremendous. They can be easily achieved once the will to start has been found. Following are five ways that sales pipeline management leads to increased profitability.
Sales management and salespeople are challenging no matter the industry.
Sales Management Tip #1:
Motivate Sales People by Helping Them Compete with Each Other
Salespeople are paid on commission using close sales totals. However, for expensive, long sales cycle processes, there can be many ups and downs in results. Moreover, the sales winners can look like losers and vice versa at any given moment in time.
Each salesperson competes based on their ability to prospect and find new opportunities and customers. Performance is measured by the volume of opportunities generated. A seasoned salesperson may have a few well-developed accounts that keep him in the black each quarter. However, sales management analytics can uncover aggressive salespersons that are nurturing new high-value customers. Thus, building the future of the business by finding new high-value customers.
Sales contests and bonuses can also provide incentives to build new markets and develop new product lines. However, this can only be meaningful if the sales process is measured from start to finish. This results in more realistic opportunities and more opportunities in the pipeline.
Sales management analytics can uncover promising salespersons that are nurturing new high-value customers.
Sales Management Tip #2:
Manage the Revenue Roller Coaster
Salespeople typically love to spend time closing deals. Staying motivated to network, cold call, get referrals and find new prospects for sales in future months is more difficult. It’s easy to “put off” prospecting activities that build a future business, especially when management only sees the end results.
Monitoring the overall pipeline of future business opportunities can identify early on when salespeople neglect prospecting activities. Management has the ability to address prospecting problems early on before they have a material impact on revenue. Likewise, seasonal businesses can increase the focus on prospecting during “off months” to ensure the good months meet expectations.
By tracking all potential opportunities and the status or stage of each opportunity, the business can predict future business in aggregate and by territory and product line to identify shortfalls or opportunities while there is still time to impact final sales results.
It’s easy to “put off” prospecting activities that build a future business, especially when management only sees the end results.
Sales Management Tip #3:
Predict Future Demand
In many businesses, over-estimating future demand can result in excessive inventory and kill profits, and underestimating demand can result in missed sales. Visibility of the sales pipeline allows accurate prediction of future demand.
Production lines can work overtime to meet expected demand but, this increases costs. In any business, sales performance can be adjusted in conjunction with expected sales to ensure reliable delivery while reducing costs. By measuring the sales pipeline analytics, unique and otherwise unseen shortages or overages can be identified in time.
Over-estimating future demand can result in excessive inventory and kill profits, and underestimating demand can result in missed sales.
Sales Management Tip #4:
Close More Sales Faster
In most businesses, the sales stall at the same point in the process. Additionally, it can be difficult to clearly see the bottlenecks without objective measurement of all sales opportunities, as opposed to only those that purchase. Businesses may feel good about closing 30% of the “leads” in a month. However, by considering the weak 50% leads, strategies can be crafted to better qualify opportunities.
This allows you to avoid wasting time on customers where budgets don’t exist and better educate them of your solution’s value prior to the proposal to avoid sticker shock. This allows sales reps to focus more time on opportunities with the highest probability of closing and win a higher percentage of them.
More detailed measurement of the sales process inevitably results in the better and earlier qualification of opportunities and shorter sales process time. Many CRM software solutions offer easy-to-use pipeline tracking tools.
It can be difficult to clearly see the bottlenecks without objective measurement of all sales opportunities, as opposed to only those that purchase.
Sales Management Tip #5:
Increase Close Rates
Breaking down the sales process into typical steps facilitates thinking about the customer’s “buying process”. Customers can’t digest everything there is to know about a product and service all in one presentation. Customers appreciate information only if they are exposed to similar concepts earlier in the process.
Sales management organizes sales presentations and marketing collateral so that customers learn just enough to encourage them to convert. However, no so much that they become overwhelmed and put the brakes on the entire process. More so, a well-sequenced sales process, built around objective pipeline analysis can overcome common objections before they ever arise, moving sales forward faster and avoiding typical stalls.
Sales management organizes sales presentations and marketing collateral so that customers learn just enough to encourage them to convert.
Sales management is never perfect and always evolving. Many businesses avoid it due to the ephemeral nature of the information. What a business knows about sales opportunities today will change tomorrow. However, no business can fine-tune its sales process to maximize sales performance, market penetration, profits, and customer satisfaction without measuring the flow of customers and opportunities through the sales pipeline.
Rather than procrastinate, it’s best to simply begin by measuring the input as well as the output of the sales process (how many leads go in, in addition to sales closed) and build subtlety from there to increase visibility and insights.