As a salesperson, it’s natural that your primary focus is hitting quota each month. But you also have to look ahead and set yourself up for success in the next month, and the month after that.
Maintaining a 30, 60, and 90-day pipeline is important for all salespeople, but especially so for reps who sell to small and medium businesses, a market in which sales cycles are short and acquisition velocity is fast.
To have a predictable pipeline, you need to seed two buckets -- quantity and quality.
Understanding how many opportunities you need in your pipeline is dependent on knowing your company’s conversion rates through the sales process. Work backwards from your quota to determine how many deals you need to close, then use benchmark conversion rates to inform how many demos, opportunities, connect calls, etc., you need to book to end up at your number.
A mistake many reps make is looking exclusively at historical company performance. You shouldn’t just be looking at company-wide metrics; quite often those numbers will be too high or too low to be appropriate for up when your individual performance is taken into account.
For example, you might have a high number of opportunities booked for the next 60 days when compared with company benchmark data, but if your personal demo-to-close conversion rates are low, the number of opportunities might not be sufficient after all.
When evaluating your pipeline, you should also consider average deal size and sales cycle. These factors influence how many deals you need in your pipeline today to stay on the right track for the next three months. Work with your manager to come up with personalized benchmarks combining company-wide data with your own past performance.
To spot red flags, take a holistic view of your pipeline by arranging deals by funnel stage. A good funnel should start wide and become narrow in a consistent fashion, so look out for significant aberrations in different parts of the funnel. For example, a pipeline that’s thin at the top but healthy at the bottom of the funnel would be a sign of trouble. This is an indication that you've set up a good number of late-stage opportunities for this month ... at the expense of prospecting for future months.
Just having a beautiful funnel isn’t enough. You can have lots of opportunities at every stage, but it’s possible that not every one of those prospects should have been moved to the next deal stage.
Poor qualification is a common reason deals are incorrectly advanced. Work with your manager to identify weak points in your funnel and understand where you may be falling short.
If your funnel is wide at the top but thins significantly toward the end of the sales process, for example, it means you’re having trouble converting opportunities into demos, and demos into customers. It’s possible you’re successfully connecting with companies but not effectively identifying good fit companies, or it could be that you’re not selling value and insights through a strong consultative sales process.
Another good exercise to identify potential obstacles is to formulate a closing plan for each of your late-stage opportunities. If you can’t identify why and how your prospects would buy and have no understanding of their procurement or legal processes, that’s a good sign you haven’t actually reached a closing stage. Circle back and do more qualification.
The best reps are disciplined about building time into their day-to-day to prospect and create net new opportunities so they’re never caught off-guard by a shrinking pipeline. They prepare closing plans with their prospects so they’re not chasing opportunities in the last week of the month. They have a firm understanding of what a qualified prospect looks like and know what information they need to have before they advance an opportunity to the next step of the sales process.
You, too, can be that rep. Ensure that you’re consistently focused on prospecting and that the deals you spend your time on are valuable. Take a data-driven approach to assessing your pipeline and you’ll be prepared to consistently make your quota.
Originally published Aug 27, 2015 8:00:00 AM, updated February 01 2017