Sales Pipeline Reporting – The One Key To Increasing Accuracy
The sales pipeline reports are what you, as a sales leader, live and die by. Understanding what the current pipeline health looks like, what to expect from the funnel this quarter, and where to focus in order to improve, are the key questions the rest of the executive team expects you to have clarity on.
Many Views, One Challenge
There are many different views that are useful in looking at a sales pipeline, and each view is useful in its own unique ways. You will want to know the size and value of the overall pipeline, weighted by its chance of closing. You will likely also want to know the average size of deals in the pipeline and their distribution to see if you’re moving more up-market or down-market. You may want to look at the number of deals in pipeline to understand the closing effort that will be required. Looking backward, you’ll want to understand sales velocity, close ratios, and close percentage.
Each of these sales pipeline reports relies on one thing; an assessment of the stage that each deal is at any moment in time. To report on current pipeline, you’ll need an accurate sense of where every deal is right now. To measure historical sales funnel movement and determine deal velocity and close percentages, you’ll need an accurate assessment of which funnel stage every deal has been in at each moment historically.
Sales Rep Self-Assessment: A Shaky Foundation
The fundamental challenge with this is that opportunity stage, in most sales organizations, is self-assessed. Sales reps, perhaps with some rough heuristics, determine for themselves what stage they think each deal should be in. This suffers from a number of major challenges:
- Optimism: Sales people are by nature, optimistic. They may hear what they want to hear in conversations with buyers. Based on this, they may assume a deal is further along than it really is.
- Message Management: Sales professionals are also wise enough to know that the revenue funnel is very closely watched. They may carefully manage which deals they move forward, and which deals they hold back, in order to make sure their overall funnel looks “just right” to sales management.
- Timeliness: Administrative work, like updating deal stages in order to make pipeline reporting more accurate, is low on most sales reps’ priority lists. They may update their deals late if at all, and deals may jump two or three stages at a time when they are finally updated.
With all these foundational challenges, deal stage in a CRM system like Salesforce cannot be seen as an objective, accurate, and timely data point. This means that most approaches to sales pipeline reporting have major cracks in their foundation and are challenged in terms of accuracy.
Clean Data on Deal Stage
Today’s data platforms make this challenge one that can be easily improved. Assessing whether a deal should be in “Prospecting”, “Value Proposition”, “Discovery”, or “Negotiation” is more than just gut hunch. Modern sales teams look at objective measurements of key interactions and developing business relationships to make those determinations:
Single-Threaded: Are we talking to just one person, or to more than one person at this account?
Exec Engagement: Have we developed relationships with any executives at a director level or higher?
Functional Roles: What functions (sales, marketing, IT, legal, finance, etc) have been involved in the conversations about this deal?
Deep Relationships: Do we have strong relationships with anyone at the buyer (who may be acting as a coach/champion)?
Team Engagement: How many of our own team members are engaged at this account?
Blocking Roles: Which key blocking roles (such as legal or finance) are engaged in conversation? When were they first engaged?
Growing Engagement: Is our engagement at the account growing broader? How many new relationships have we developed since the last review?
Most Recent Communications: When was our last outreach? When was their last communication?
These objective measurements can give a very clear sense of when a deal should properly move out of “Prospecting”, or when “In Negotiation” or “Contract Review” are appropriate stages.
Strong Foundation, Strong Analytics
A sales pipeline report that is based on a clear, up-to-date, and automated understanding of what deals are at what stage has the potential to be far more accurate than a pipeline report based on self-assessments and gut hunch.
Relationship intelligence data platforms like Nudge can automate the process of capturing every contact, every interaction, and every relationship, so your data foundation is 100% complete. With this data in Salesforce, or your CRM of choice, you can build a pipeline reporting operation that delivers the accuracy, timeliness, and clarity you have long worked for.