Instead of scrubbing forecast data, managers should talk about how to improve sales performance and productivity. This is pipeline management.
Mid-way through each school term, anxious parents interrogate their children about their current grades. So far are they getting As, Bs or Cs? How likely is it that they can pull their marks up before the term ends? What do they expect their final grades to be?
This is forecasting. Parents extract enough data from their children to either give comfort that the grades are going to be good or adjust their expectations downward. But by doing this, parents aren’t actually improving performance or affecting results, only changing their forecast.
Similarly, weekly conversations with salespeople about the likelihood and timing of a deal closing do nothing to improve the chances that the deal will actually close. But every week, sales managers sit down with their teams to scrub numbers. They believe they’re having productive pipeline management conversations. In fact, they are having administrative forecasting sessions.
Instead of analysing forecast data, managers should be talking about how to improve performance. Teachers help kids study for upcoming tests or brainstorm strategies to improve their results. Managers should take the teacher’s role – that of a professional focused on improving skills and performance. They should brainstorm ways to improve their teams’ productivity. That is pipeline management.
To differentiate between the two tasks, think about this. If you’re asking about dollar amounts or the likelihood and timing of a sale, you are forecasting. If you’re examining the health of the pipeline and discussing how to improve the chances of winning deals, you are managing the pipeline.
These two conversations are almost always intertwined, but it’s critical to separate them as they are two distinct activities with vastly different impacts:
Forecasting estimates performance by updating data. It has no positive impact on sales results.
Proper prioritisation of these two conversations can have an extraordinary impact on results. Take Sam, a rock-star sales manager for a major global company. Like all sales managers throughout his company, Sam is required to meet with his sales team to scrub pipeline data and give updated forecasts to his boss every Friday afternoon.
The other sales managers dismiss their teams after scrubbing data; Sam holds a second meeting focused on pipeline management.
He helps his team members evaluate the opportunities in their pipelines. He works with them to get good deals in and bad deals out. He brainstorms with them about how they can make the most of their opportunities.
The sales pipeline for Sam’s team is 30% smaller than other teams’ pipelines, yet his team produces twice the revenue of any other team.
Achieving stats like Sam’s comes down to understanding that forecasting conversations, which focus on close dates and probabilities, don’t move the needle towards a win.
And achieving stats like Sam’s comes down to taking action.
We’ve written before about how important it is to get sales team meetings right – it’s essential if you want your team to then have effective client meetings. But if all you accomplish in that hour-long conversation is to adjust your assessment of the likelihood of a deal closing from 60% to 70%, you haven’t actually improved the chance that you’ll win that deal. You need a separate conversation for that.
If you’re not having that separate conversation regularly, your sales team won’t make the grade. And neither will you.
You know you should help your team achieve more, rather than helping your team predict what they will achieve. To arm them with the knowledge and tools to do this, download our eBook 'Win every deal, from lead to cash'.