World Class benchmarking indicates that Best In Class Sales Managers spend 2 total hours, per month, submitting an accurate pipeline forecast. All while spending over 124 hours per month WORKING with their reps selling what is in their pipeline.
Pipeline accuracy can eat away precious selling hours, yet it is the test of future sales and the ultimate leading indicator. The pipeline is the one tool your boss, the finance department, operations, HR, marketing and even the janitor will ask you about today, tomorrow, this week, this month etc. (Did I mention your spouse?)
“What are you going to sell?” “How is it looking for this month?” “What should I put in the forecast this month?” “Are we going to bonus this quarter?” Geez…..
How much time does forecast accuracy consume in your life each month?
In one of our clients, coming up with an accurate forecast took a sales manager 2.5 days per month, after a survey we conducted. That’s 20 hours per month just working on a forecast. Since this customer’s sales reps have an average sales price of $93, 250 dollars per sale, closes 43% of their sales and averages 3 sales calls per day; the opportunity cost by working on an accurate forecast each month can lead to lost revenue of over $280,682. (7 Lost sales calls at a 43% close rate x $93, 250 average deal)
You can’t afford that much lost revenue just to be accurate with the revenue you are going to sell. (This is really ridiculous yet happens all the time.)
There are 4 Ways to eliminate this wasted time and accurately forecast your Pipeline:
- Have your Sales Reps forecast ONLY to a Sales Process. The key is following a buyer centric sales process with stringent exit criteria. Criteria you spend the majority of your time coaching and managing for adherence. If it’s accurate in a stage of the sales process, you can then determine the probability of close based on historical evidence of that stage. Managing just to the customer and where it is in each stage eliminates the need for you, as a sales manager, to chase your sales rep every week, month and quarter for a ‘real’ forecast. World Class sales forces, sales leadership, and sales management spend less than 2 hours a month submitting a forecast to their boss or other departments. They roll it out of their CRM….and continue coaching and developing reps on strategy through the buying process. This leads me to point 2.
- Focus your one-on-one meetings on Deal Strategy. Time spent with any sales reps should be focused on coaching and developing that rep. World class sales managers spend 78% of their time helping close deals and developing them to be better sales reps. Why would you spend time asking about when the deal will close instead of how the deal will close? Focus your time on moving the opportunity through the sales process. Question the rep about obtaining the exit criteria of a certain stage. Don’t be finance people; be a sales manager and leader. Use questions to test the strength by stage.
- Know the Deal. The only way you truly know how to move the deal from one stage to the next in the sales process is to spend time with the rep. You can’t blow this off. The scheduled one-on-one is truly the only way you will understand where all the reps’ deals are in the process and how to get them down the funnel or out. No matter what happens, spend the time upfront so when the end of the week or month comes for the forecast, you know where each deal is.
- Clear away the brush. Successful sales managers remove obstacles for their sales reps. In a recent sales rep time study we conducted for one client, sales reps spent 34% of their time tackling service problems. The main service problem was that customer service had abandonment rates north of 37%.
It’s like this scenario: The customer calls the service department. They are on hold for over 5 minutes. After a few choice words, they hang up and call their rep.
That’s what I would do.
We increased their customer service agents by 5% (which cost them $536,000 dollars in labor and equipment costs). In 3 months, the sales force sold an extra $3.2 million in revenue by picking up 23% of time from service issues and focusing them to now pure selling activities. Don’t pick up pennies and step over dollars.
Pipeline accuracy is one of the biggest hidden timewasters in a sales manager’s life. The unnecessary time spent checking and re-verifying the accuracy of a pipeline can cost you the revenue that would make your pipeline more robust and exceed your quota!
Focus your time on what’s truly important and makes your life easier. You have turnover to worry about, and the competition, and your service dept, and…..