Effective pipeline management means understanding exactly how your business is shaping up month after month, quarter after quarter. Why does that matter? This pipeline visibility means more accurate forecasts—and more accurate forecasts means the ability to invest confidently and grow with confidence.
The flipside is an unhealthy pipeline full of bad deals that don’t close, inaccurate forecasts, missed opportunities, and unforeseen challenges.
It’s no surprise that a Harvard Business Review study found companies that practice effective pipeline management see, on average, 15% higher growth than those that don’t.
But good pipeline management doesn’t occur spontaneously. It takes practice and training. The same HBR study found that companies that trained sales managers on proper pipeline management, as well as clearly defined their sales processes, and spent at least 3 hours every month managing each rep’s sales pipeline, saw nearly 30% higher revenue growth than those that didn’t. Training sales managers alone to manage their pipelines resulted in 9% faster revenue growth.
Providing your sales reps and managers with pipeline management training is a critical part of overall sales management. But where do you start?
Who needs pipeline management training?
All members of the sales team need pipeline management training. At the individual level, sales reps need thorough coaching on how to build and manage their opportunities. Sales managers, meanwhile, need guidance on strategies and techniques to not only improve the sales pipeline, and tips for how to communicate these strategies effectively with their reps, but also methodologies for inspecting their reps’ pipeline and pressure testing their forecast.
Specifically, managers need “targeted training to address specific pipeline management challenges,” according to HBR.
That means instruction in how to make better overall sales pipeline decisions, such as determining the ideal pipeline coverage for each rep, identifying and leveraging helpful behaviors for positive impact, and effectively leading regular pipeline analysis and pipeline review meetings (as well as quarterly business reviews) to create an atmosphere of support and teamwork versus scrutiny. “Even these few skills can have a significant impact on sales force performance,” HBR notes.
The challenge is both managers and reps are strapped for time. Going through every opportunity, line by line, and inspecting whether it is healthy or at risk is wildly inefficient. This is why it’s critical to be trained on how to effectively and efficiently manage pipeline. We share an easy four-step process for inspecting pipeline that anyone can be trained on below. But first, let’s define the basics of pipeline management.
Decoding pipeline management
The sales pipeline consists of stages that follow an opportunity from conception to closed deal. The sales pipeline stages may vary by business, but here is an overly simplistic generalization of what it typically looks like:
- Initial contact: The rep has connected with the prospect.
- Meeting set: The potential client has agreed to a meeting with the rep to hear more about the service or solution.
- First meeting/demo: The rep has met with the prospect and illustrated how the service or solution can address the prospect’s pain points or help them leverage opportunities.
- Contract: The rep has sent the prospect a proposal for their review.
- Deal closed: The contract has been signed and the deal has closed.
Reviewing opportunities at every stage of the sales funnel can help sales teams identify at-risk deals and allow them to intervene earlier, as well as focus their attention on the best deals to meet sales goals.
Further, tracking other sales pipeline metrics—including the average length of time deals stay in each stage, individual sales reps’ behaviors at each stage, deal activity, average sales cycle length, and more—can help sales managers assess the overall health of the pipeline.
A Revenue Operations Platform like Clari can do this for you and analyze how current deals are behaving compared to previously won or loss opportunities. In addition, Clari tracks all of these data points automatically so reps don’t have to waste precious selling time manually inputting data.
Sales pipeline vs. sales funnel
It's important to clarify the distinction between the sales pipeline stages and the sales funnel. The sales funnel is the journey an individual takes to become a customer, from initial contact to paying client. The sales funnel typically consists of six levels: contact, engaged, prospect, marketing qualified lead (MQL), sales qualified lead (SQL), and opportunity, which lead to customer—a contract signed.
More importantly, the sales funnel report is typically a representation of the average conversion rates, as the prospect moves through each stage.
Your sales pipeline can be represented by the dollar value that individual opportunities could offer. Sales pipeline can also refer to the opportunities themselves. Successfully managing your pipeline means judiciously moving those opportunities through your sales process, eventually to a closed-won deal.
Best practices for pipeline management training
There are several key ways in which organizations can ensure their sales reps and managers are thoroughly versed in the most effective techniques for pipeline management:
- Build a healthy pipeline from the start
- Identify the required pipeline coverage
- Coach reps
- Use data/tools and pipeline management software for deep and effective pipeline inspection
Training tip #1: Build a healthy pipeline from the start
To ensure you start with a healthy pipeline, first define your ideal client profile (ICP). Think about your ICP like a compass pointing you to the deals that will most likely close. Which companies are most likely to buy from you? Where does your product use case fit best? What industry are they in? How big is their organization?
Answering all of these questions will allow you to target prospects who are the most likely to end up as clients. This is the foundation to building a healthy pipeline.
Training tip #2: Identify the required pipeline coverage
You’ve probably heard of the 3X rule: Stock your pipeline with at least three times what your revenue target is for that period. If you’re aiming for $1 million in revenue for the quarter, you’d need $3 million in pipeline for that time period. But don’t assume it’s that cut and dry.
Your ideal pipeline coverage ratio will depend on many factors, including your business sector, length of sales cycles, and individual rep personalities. There’s no one-size-fits-all approach. Tailor your pipeline coverage ratio to your specific company data using these best practices.
Training tip #3: Coach reps
One of the important elements of any training program for managers is learning how to coach reps to maximize their sales performance.
Coaching can make a drastic difference in the success of a rep, and ultimately have a huge impact on the success of the entire organization. But not nearly enough companies provide their managers with guidance on effective coaching. A CSO Insights study found that almost a third of managers spend less than 30 minutes a week coaching reps on skills and behaviors.
The best opportunities for coaching are one-on-ones between the sales manager and the rep, but oftentimes this time is spent rehashing old news and interrogating the rep— with little to no strategizing, follow-up, or accountability. Instead of wasting valuable one-on-one time this way, sales managers can transform these meetings into collaborative strategy sessions by:
- Reviewing up-to-date data
- Diving deep into the deals that can bring about the greatest return
- Formulating plans
- Developing rep skills and coaching
These four tips for successful sales coaching are a start.
Training tip #4: Use data/tools for deep and effective pipeline inspection
Thanks to automation and AI-powered sales tools, sales teams now have more time and a wealth of knowledge and insights to help them build, manage, and maximize their pipelines. These pipeline management software solutions can help you track how much pipeline you need, monitor flow, and quickly alert you to where (and why) deals are slipping.
These tools can also help you inspect your current and out-quarter pipeline to de-risk deals and ensure you achieve predictable revenue. At Clari, we do this by engaging in what we call the four-point deal inspection. It involves asking four key questions about each deal:
- What’s changed? Which elements of the deal have stalled, if any? Clari automatically analyzes key attributes like deal size, forecast, activity, and close date, and then shares that information in an easily readable dashboard to give a real-time, data-driven snapshot of where a deal is headed.
- How likely is it to close? You need a data-backed view into the true health of your deal. By analyzing historical close rates, win rates, and conversion rates, Clari’s platform produces an opportunity score that reps and managers can use to help them determine the real likelihood of a deal closing, thereby improving the accuracy of their forecasts.
- How much activity is there? Rather than relying on reps’ reporting or manually checking calendars, marketing campaigns, call logs, emails sent and more, managers and reps can turn to Clari’s Activity Insights panel, which automatically pulls in all this deal activity data so you can easily track your potential customers’ engagement.
- Is it following our company’s sales process? All deals should be following the organization’s preferred sales process. Clari’s Details panel can be customized to include the unique fields your team uses, such as sales methodologies, which allows reps and managers to monitor whether deals are moving through the different stages appropriately and shows sales leaders how due diligence is being conducted and whether data is being captured properly.
Beyond assisting with this four-point deal inspection, AI can also unearth deeper insights than you might get from a simple manual evaluation of your pipeline. Clari, for example, analyzes years’ worth of historical data like deal activity and length of time in each stage to produce actionable insights that can accelerate deals and improve coaching and hiring.
As an added bonus, “the AI forecasting becomes more and more accurate as you use the platform, which is awesome,” says Robert Eden, Account Executive at SumoLogic.
Ultimately, proper pipeline management comes down to practice, training, and using the right tools. With these in place, your organization will be on the path to smooth pipeline management, predictable revenue, and continued improvement and growth.
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