Sales Pipeline Analysis Diagnose, Coach, Monitor

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Sales Pipeline AnalysisDiagnose, Coach, Monitor


OverviewHistorically, the IT staffing industry has usedactivity level as the primary (and in manyinstances the exclusive) barometer for salesperformance. The problem with thisphilosophy is it forces sales professionals,recruiters and managers alike to focusexclusively on quantity. The notion goes,“double your activity level and you will doubleyour revenue attainment and income level.” Thisphilosophy is flawed because it is neitherscalable nor sustainable resulting in unquailedopportunities and a low sales closure rate.Instead, IT staffing firms should be focused onimproving the execution of each step in thesales cycle and improving their overall saleseffectiveness by closing a higher percentage oftheir existing deals.Recently, sales automation technology,particularly CRM/ATS has become increasinglypopular and a driving force behind sales andrecruiting management within the IT staffingindustry. This technology has enabled ITstaffing firms, sales leaders and managersespecially to analyze and act on insightful data.When leveraged properly, this data enables ITstaffing firms to run their business moreefficiently and attain higher profit margins. Itoptimizes decision making, shortens the salescycle and improves employee retention. Salesmanagers however play a pivotal role inensuring this shift-analyzing and taking actionon the data- occurs within their organization.sales managers much like spread sheets, P&Lstatements and balance sheets are foraccountants. Managers must be able toanalyze the overall health and predictability ofthe individual and team pipeline to bestunderstand their current state. In effect, salesmanagers must be like physicians where theycan quickly and accurately diagnoseconditions to provide a “clean bill of health” ordevelop the prognosis and provide thesubsequent sales coaching where joborders/opportunities are stalling. Whenevaluating your sales pipeline you should belooking for bottlenecks. Let’s take a look atsome of the common characterizations of asales pipeline that a sales manager maydiagnose.Top Heavy Pipeline Bloated PipelineYour Sales PipelineOpportunity or job order reports and pipelineanalysis dashboards are tools of the trade forCopyright 2013MenemshaGroup,AllRightsReservedJob orders arecoming in andgetting tocandidatesubmittal and eveninterview stage Many job ordersare stalled aftercandidatesubmittal or interview, resulting in abloated pipelineFew deals are closing Diagnosing the Health ofJob orders,opportunities arecoming inMany job orders arestalling or falling offlikely to due topoor qualificationA small percentageof deals are closing 2

Bottom Heavy Pipeline revenue forecastedFew/infrequentjob orders cominginLittle to noprospectingefforts takingplaceClosing dealsLittle/no futureHealthy PipelineQualified joborders are comingin Each job order isconsistentlyadvancing to thenext stage of thesales cycle Candidate offersare making their way into thecustomers purchasing processJob orders are closing inward.The root cause for this is oftenbecause they don’t commit to a consistentsales process or methodology in which theyuse consistent and objective data to definewhen each stage of the sales cycle has beencompleted. Instead, most IT staffing firmsdeploy a sales pipeline management systemthat relies on subjective criteria to define eachstage of their sales cycle. Using subjective datato define the stages of your sales cycle allowseach job order to be treated as if it were“unique” and subsequently drives poor andinconsistent sales behavior. This in turn drivesinconsistent sales coaching by sending mixedmessages to team members. This is why manyIT staffing firms tend to deliver inconsistentresults and close a relatively low percentage oftheir job orders.Coaching Job Orders andOpportunitiesMost sales managers are striving to achievethree critical success factors; 1.) Hit theirrevenue and gross profit quota, 2.) Accuratelyforecast revenue and gross profit and 3.)Coach, mentor and develop their teamPipeline ManagementChallengesThe most common challenge leaders ofIT staffing firms face with pipelineanalysisisthe“blamegame.”Salespeople including sales managerswill often point the finger at recruitingindicating that the real issue is candidatedelivery.Recruiters and recruitingmanagers respond by saying the joborders are not qualified. Team membersnaturally look outward before they lookCopyright 2013MenemshaGroup,AllRightsReserved3

members to hit their quota. When seeking toaccurately forecast revenue and gross profit,sales managers must be able to correctlydiagnose the condition of the pipeline, identifythe issues or bottlenecks and provide thecorresponding coaching. As mentionedabove, without a sales process that relies onobjective data to define when each stage ofthe sales cycle has been completed, a managercannot provide consistent or effectivecoaching.Let’s assume for a moment that the salesmanager has just evaluated his/her teampipeline and identifies that the middle of thepipeline is bloated. More specifically, 75% of allcandidates were getting interviews but only25% were being placed. There could bemultiple reasons for this, some of which maybe: Poor candidate preparation(unprepared candidates on clientinterviews)Lack of closing skills/inability touncover and/or overcome clientobjectionsLack of understanding the client’sbudget approval and purchasingprocessInability to access the ultimatedecision makerprevent delays in the sales process, improveforecasting accuracy and ultimately closedeals.Monitoring Your ProgressEffectively diagnosing and coaching to yoursales pipeline are critical skills for any salesmanager. But the sales pipeline managementprocess can often be challenging andoverwhelming. In order to set the sales teamup for success the sales manager must firstmake a realistic assessment of the existingpipeline process. The sales manager shouldidentify and define or redefine the process. Forexample, if the process is too “loose” (based onsubjective data where each opportunity istreated as being “unique”) or it is too rigid orcomplex (has too many steps).You should also make sure that to someextent, your sales funnel is in alignment withyour customer’s purchasing process. When ITstaffing firms focus exclusively on the tasksthey must complete in the sales process theymake assumptions about their customerspurchasing process. Assumptions inevitablylead to delayed and eventually lost deals. Theleading indicator of an effective and healthyThe sales manager can now lead acoaching session by treating thesymptoms in a dialogue with his/hersalesperson. This dialogue may revealthat the salesperson has this (or many)bloated job orders in their sales funnelbecause the salesperson made anassumption that the interview stagemeans he/she will close the deal in thecoming days. However, in haste toforecast this revenue the salesmanager may discover that thesalesperson failed to ask many of thecritical questions that uncover keyinformation that is necessary toCopyright 2013MenemshaGroup,AllRightsReserved4

pipeline is that every stage should be drivenand executed by a customer action item. Inshort, each stage should be measured bywhether or not the customer completed a stepand/or took an action to advance theopportunity. For example, did the customercommit to interview time slots when thesalesperson took the original job order?Once the sales manager has a solidunderstanding and definition of the salespipeline stages they can establish the KPI’s thatmeasures the outcomes of each stagecompleted. This ensures sales managerspredictability. Predictability implies the use ofmilestones for salespeople and sales managersalike so they know where they stand with theiropportunities. Ideally, KPI’s should includeconversion ratios, value per stage, age ofopportunities by stage, and number ofopportunities by stage. To drive accountabilityand reinforce your desired sales behavior (asdefined by the stages of your sales funnel),sales managers should host weekly pipelineand performance reviews and conduct salestraining and role playing activities focused onexecuting each stage of your sales funnel. Thisconsistency ensures that salespeople becomecomfortable with the sales pipelinemanagement process and internalize salesbest practicesGetting Started-Jump Start You Sales Pipeline Analysis andCoaching ProcessTo jump-start your sales pipeline analysis and coaching process, Menemsha Group offers training andconsulting services to assist sales managers and sales professionals with their pipeline managementfunction. For example, we can provide: Pipeline management consulting: Provide a thorough analysis of your organizations pipeline,create/edit your existing pipeline management system based on IT staffing best practices Creation of KPI’s Training for sales managers: Coaching sales opportunities and job orders Training for salespeople: Pipeline managementCopyright 2013MenemshaGroup,AllRightsReserved5

Launched in August 2008-in the midst of the financial crisis -Menemsha Group has quickly emerged asthe premiere sales training and consulting organization for IT staffing and consulting firms. Based inBoston, MA Menemsha Group has served over 200 different IT staffing firms in the United States,Canada, India and United Kingdom.Dan Fisher, Founder & OwnerDan is a seventeen year sales veteran and thought leader of the IT staffingand consulting industry. Dan is the author of the only proprietary salesmethodology designed exclusively for selling IT staffing services-IT StaffingSales Playbook- and is a popular speaker at industry events TechServeAlliance and Staffing World as well as sales conferences and leadershipretreats. Dan has worked with over 200 IT staffing and professional servicesfirms and has coached thousands of sales professionals in the IT servicesindustry. Dan’s focus is on helping sales professionals move up the customer value chain throughstrategic sales strategies, accelerating the sales cycle and key account development.Contact InformationPhone: (888) 553-3083Email: [email protected]: www.menemshagroup.comLinkedin: @dantfisherCopyright 2013MenemshaGroup,AllRightsReserved2

sales pipeline are critical skills for any sales manager. But the sales pipeline management process can often be challenging and overwhelming. In order to set the sales team up for success the sales manager must first make a realistic assessment of the existing pipeline process. The sales manager should identify and define or redefine the .