BI for Sales: Pipeline Health Analysis
Although it is sometimes said that sales is an art, the reality is that sales is a process. And there are specific skills and activities that can be measured and managed across the process to improve a sales person’s performance. Unfortunately, front line sales management has a tendency to operate at the individual opportunity level instead of the process level.
Consequently, reps don’t have the required skills to be successful and sales managers have to act as “Super Sellers” at the end of each quarter to bring deals home, which makes it hard to scale. Furthermore, lack of focus on the entire sales/pipeline process means large deals can’t take their natural course and are frequently discounted to bring in “the number” for the quarter.
Some common challenges that have to be addressed to create a more efficient and effective process include
- Correctly diagnosing rep selling challenges – A sales person needs a number of skills to advance an opportunity from one stage of the pipeline to the next such as, Prospecting, Solution Development, Buyer Qualification, Sales Process Management, Value Justification, Negotiation, and Account Management. Sale managers need to be able to identify which stages of the pipeline have trouble, the skills deficiencies causing gaps, and underlying causes of skill deficiency.
- Balancing forecast and pipeline conversations – Forecast conversations that focus on specific opportunities and concentrate on the particulars of when the opportunity will close, the deal size, and any activities completed or pending to help minimize risk and maximize deal size and likelihood of closure are an essential activity of the sales process. However, sales managers should not neglect pipeline conversations that concentrate on the distribution of all opportunities across the different stages of the sales process, the core selling skills of the rep, and the long term health of the business (beyond the current quarter).
- Balancing deal and skill coaching – Deal coaching targets performance obstacles within a specific deal across the sales process. Skill coaching targets a few, key development areas based on analysis of trends in rep behavior across deals. Although deal and skill coaching are equally important, managers tend to over emphasize deal coaching because deals feel more urgent than skills. And it’s easier to focus on the tangible details of an individual deal than on conceptual sales skills. However, balanced coaching helps decrease on boarding time, increase process adoption, improve rep performance, grow deal sizes and create more predictable and sustainable revenue streams.
The following screenshot is from the Pipeline Health Analyzer, which was designed to address the challenges outlined above. Although it is part of the SAP BusinessObjects OnDemand solutions for Salesforce.com, it can easily be adapted to work with any CRM system.
1. Pipeline Distribution Analysis: Displays reps’ revenue performance at each stage of the pipeline
2. Revenue Detail: Shows gap to goal for selected month based on goal distribution across year
3. Weighted Future Revenue: Displays revenue reps will produce for current and next quarter (based on current pipeline)
4. Scenario Planning Capability: Allows reps and managers to scenario plan by altering sales cycle and deal size
5. Coaching Guidance: Suggests coaching based on pipeline stage selected
6. Prospecting Metrics: Displays recommended baseline prospecting efforts based on quota and historical sales profile
Managing reps to a standard pipeline size (e.g., always have 3x goal in the pipeline) encourages reps to enter unqualified opportunities — leaving some reps unprepared to hit goal. And comparing individual rep pipeline against an organizational average does not create a believable gap for sales reps.
Therefore, this solution uses three years of rolling history to create a rep specific actual to ideal pipeline that reps cannot dismiss as irrelevant to them. As the graphic above illustrates unique selling patterns result in different pipeline needs in order to hit goal. Showing reps the gaps between their current and ideal pipeline based on their historical selling creates urgency for correcting gaps.
Determining where opportunities are stacking up in the pipeline and which stages have significant gaps helps sales reps and managers identify skill development needs. The solution provides pipeline-stage specific issue identification and development guidance. Focusing on skill development enables a sales person to address multiple opportunities all at once rather than having to solve them one deal at a time.
Based on the credible gap selected, the solution highlights the skill deficiency most likely causing the gap. The solution’s prescriptive functionality suggests possible underlying causes of the skill deficiency and provides a series of questions to aid rep and manager in issue verification. Once the underlying issue is identified, the solution provides action steps and practical examples of implementation to aid in gap resolution.