We are all familiar with pipeline conversations. In fact, many sellers and sales managers dread them. Why? Because they see little value in them. The shame of this that there is a lot of value to be gained from these discussions.
A Tale of Two Sales Managers Pipelines
We’d like to start this blog post with a story. A story about two sales managers in the same organization.
Manager #1’s team:
- Closed $4.7M in business
- Had a 36% win ratio
- Contributed 17% of overall business revenue
Manager #2’s team:
- Closed $7M in business
- Had a 70% win ratio
- Contributed 59% of overall business revenue
Which manager and their pipeline would you want in your organization?
What if we told you that manager #1 had a $41M pipeline and manager #2 had a $29M pipeline?
We decided to follow this rock star Manager #2 around to understand what he was doing differently. Here’s what we found:
- His group was doing the same amount of prospecting as every other team
- However, he was maniacal about what stayed in the pipeline….and what got pushed out. He qualified and qualified and qualified.
- Met more frequently with his sellers.
- Was the only one of the managers who had a separate meeting for early stage opportunities. He would do it as a group.
- Would ask about very specific things like: do you know who the decision-maker really is? Do you know the timelines? If not, he would say “Do NOT put that in my pipeline!.“
- Was not unique by other measures. He was equally trained and also had the same late stage meetings as other managers.
The only thing he did differently were those early stage pipeline conversations aimed at DIS-qualifying the bad stuff early and often. Looking for reasons NOT to put it in versus reasons to include it.
And as it turns out, his experience is not unique.
Sales Pipeline Conversations Are a Big Deal
While it should come as no surprise to you, according to research we did with the Sales Management Association, managers spend a lot of time having pipeline conversations. We were surprised however, to discover just how often and how long.
- 72% of managers responding had several meetings a month with over half having one or more a week
- The meetings averaged 53 minutes in length
One or more meetings per week and each lasting 53 minutes is a lot of resources and energy focused on the pipeline. So, we must be good at it right? Unfortunately, no. Fifty six percent of our survey respondents said that their effectiveness in managing pipelines is either poor or neutral. More than half!
And that’s a shame because it pays to be effective at sales pipeline management.
Our research shows that effective pipeline management has a positive impact on revenue growth. No brainer, right? In fact, our study showed an increase of 15% in relative revenue growth.
So, your managers are spending the time, they are just not spending it in the most effective ways, focusing on the things that actually make a difference. But if they shift their approach, they have the potential for a big impact on your organization.
How Do You Use Your Sales Pipeline?
We looked at 82 companies, over 178k salespeople and over 18k managers. The below objectives are all important things for a sales manager to do but they are not all equal.