Five Attributes of Strong Pipeline Management

Strong funnel or pipeline management results in the best chance of forecasting your results accurately and your best chance at exceeding your quotas. As we say in our profession, it is one thing to miss your objective. It is yet another step and a serious miscue to miss your forecast too, in the same month or quarter. The seriousness of this offense will grow the more senior in sales management you become. Do it too many times and you may find yourself in the Accounting office!

Before I suggest the five best attributes or indicators of strong pipeline management, it is important to understand the terms used in pipeline management. I see pipeline and funnel to be synonymous. Both are a depiction of each and every opportunity and its stage within your sales process (http://sellingwisdom.blogspot.com/2010/01/process.html). The stage-gate which the opportunity holds in your sales process should indicate its placement in the 30/60/90 day window since your sales process and average sales cycle should combine to become a predictor of time.

Your pipeline is not your forecast or “commit”, a term often used synonymously with forecast, although generally whatever is in the 30-day window should be your forecast or commit for the next 30 days. If at that stage in the sales process you cannot accurately predict its closure in the next 30 days, you should give consideration to placing the opportunity back into the 60 or 90-day window. Anything that could be signed in the upcoming measurement period, i.e. month or quarter, but is still somewhat tenuous in its placement along your sales process might be considered “upside” to which you are not willing to commit. Enough definitions!

Ok, so here goes. Here, from my experience, are the five best attributes or indicators of strong pipeline management:

•“The Good, The Bad, and The Ugly”. You can give good news late and bad news early. It gets real ugly if you can’t do either and you miss your quota. Even Clint Eastwood could not shed that reputation!

•“The Multiplier”. You have at least 2x, 3x and 4x your monthly revenue quota in the 30/60/90-day window respectively. Same can be said for the number of opportunities in each window, based on the average value of your sale. You need this buffer to protect against the unexpected. You have life insurance don’t you? Put those multiplication tables from the third grade to use!

•“Green, Yellow, Red”. From month-to-month, each opportunity moves at least from one window to the next (Green), never stalling more than 2-3 months (Yellow) in the same window. If the opportunity is stalling past 2-3 months, move it way back in your pipeline (Red). Where it is moved will depend on your sales process but I would suggest that since it is “Red” it is close to “Dead”. Find something new to work on. Better yet, ask for help.

•“Equal Opportunity”. Diversity, presented in terms of different companies or opportunities, products/services offered and revenue amounts associated, exists within the pipeline. Live by the elephant, die by the elephant if it decides to play elsewhere in the jungle!

•“Upside”. Forecast is at or near quota with enough upside to likely produce an exceeded-quota measurement period. Relying on the stretch of forecast only to get to quota is like asking for a quarter tank of gas to get you the manual-prescribed mileage for that quarter tank. Go get more gas, no matter the octane. Be safe with yourself and your passengers, i.e. your management!

So there you have it. Remember these five descriptors and paste them to your cubicle or PC/laptop for best pipeline management!

A word for sales management: if you have a closely defined sales process and stage-gates with specific criteria, and you combine this process and these stage-gates with careful probing of the sales person during forecast reviews and your first-hand knowledge of the prospect, you will meet your forecast almost every time. Just as important, you will quickly determine the sales effectiveness of your sales person, i.e. are they effectively executing the work necessary to fill the pipeline and advance opportunities, or are they “selling you on a bag-of-goods”. Many are sales people are good at the latter, far fewer are better at the former – these are our true Sales Pro’s!