What is the True Value of Your Sales Pipeline?
When you look at your sales pipeline (either as an individual or from a team perspective), how do you evaluate it? Do you look at the quality of the leads and the probability of those moving to a next step? Do you see a lot of activity and a healthy number of leads and believe that as long as there are prospects being called on, that will eventually bring in the revenue? The value of your pipeline is very subjective. I say this because it is filled with prospects, leads, and opportunities, but the definition of what constitutes each stage varies from company to company and sometimes from management to sales person. Since the criteria is subjective, we need to make sure we have objective metrics
I want every sales Person, Manager, Director and VP to take a step back and take a clear look at their pipeline. What kind of leads and opportunities do you find? How qualified are they? Are these leads progressing through your sales process? Are opportunities moving through your sales cycle at a high conversion rate? Conversion rate is key. Conversion rates from marketing activities, such as outbound campaigns to MQL’s to SQL’s through your sales cycle to closed business, can provide an abundance of information that can help you consistently drive efforts to be more efficient, effective and productive.
Here are 3 things I believe are crucial to marketing and sales success for 2013 and beyond:
Quality of leads: The health of your pipeline starts with the quality of your leads! Are the leads you are speaking with truly “sales ready”? Do they have a pain? Does your product or solution solve that pain and are they willing to pay a fair amount of money to eliminate or minimize that pain in a timely manner? What constitutes a Marketing Qualified Lead vs. a Sales Qualified Lead? The quality of passed leads is a very important piece of the puzzle that must have a unified definition from the start. If everything but the kitchen sink gets thrown into your pipeline, the time it takes you to know if that prospect is truly qualified, automatically cuts the value in half.
Conversion Rates: Have you ever done an analysis on your conversion rates? If not- do it. This one exercise will give you varied insights as to which prospects are moving through your sales cycle and most likely to buy, but it also will provide insight as to where your strengths and weaknesses are or where you may need some guidance. I know all sales professionals are amazing in everything they do, but a little self-awareness goes a long way. Perhaps you have a high conversion rate with 2nd meetings, but a low rate when it comes to sealing the deal. If you look at each step in your sales process, how many leads are moving towards a next step? How many of those move to a 2nd meeting or to a demo? And how many of those went to proposal, and how many deals did you close? You must know your conversion rates, because without conversion, your pipeline is stagnant and insignificant.
ROI: CEO’s want it. How are you going to deliver it? Being able to track your leads from inception to closed business, aka: net new revenue, is the way to prove it. It all starts with process. You must take time to look at your marketing and sales process and make sure they are in sync. Your plan must be inclusive of objective data, not fluff. Justify your budget spend and show how each campaign generated qualified leads that converted through the sales cycle.
Hard data is where it’s at. It’s where its going and where it will continue to grow. Get on the train, because it’s moving fast!
