Pipeline Projections on CRM: A Godsend for Sales Management

Sales management is a tough job, but it’s even tougher when your forecasting is done ‘blindfolded,’ using only a spreadsheet, when not using your CRM system properly, or when you have a CRM system without the best forecasting capability.

As an interim sales manager, one of the first things I do, aside from boosting the qualified sales lead count, is get control of the forecast to understand exactly where I am. To get control:

1. I review the pipeline and look at dates, to see how long deals have been in the pipeline. If salespeople aren’t making quota and they have a large, aging pipeline, the reps and entries have to be cleaned up.  The pipeline at this stage is artificially inflated and that hurts everyone.
2. Next I pull a report looking for The Big Three:
   1. This Month? What is forecasted to close this month?
   2. Next month?
   3. In a three-month window?
3. In each window, I look for:
   1. The size of the pipeline vs. the sales required.
   2. The current month’s pipe to be 2-3x the sales required.
   3. Next month’s pipeline to be 3-4x sales required.
   4. The three-month window to be 4-6x sales required.
4. I look at the future pipeline:
   1. I want to see if there is a predictable slow curve downward, indicating future deals, or is there an abrupt decline? An abrupt decline at nine months tells me the pipeline is weak and future revenue flow is in trouble.

At this point I’m building a roadmap of increasing demand, cleaning up the forecast, and getting it real again. Everyone in the company wants the forecast to be accurate, but nobody wants to do what it takes to get it done. The salespeople resist reality because if the pipeline is too low they risk being fired or placed on probation. If this has been going on for six months, the sales manager is becoming a victim of the “Stockholm Syndrome,” and he or she is starting to echo the unfounded hopes of the salespeople. As someone once reminded me, “Hope is not a strategy.”

Why it’s important?

Clint Eastwood said it best in the movie Sudden Impact:

It’s just a matter of results. Everyone wants results but nobody wants to do what it takes to get it done.  

Getting a sales pipeline back to reality has the same issue.

I know it takes at least 30-60 days to start increasing the total lead level; qualifying leads take just as long, and there are fewer of them. It’s now a race because sales from the increase in leads won’t materialize for most companies for 3-6 months. This leaves me with my only short-term options:

1. Sell more to current customers
2. Increase the closing rate of what is in the pipeline

If the pipeline is in bad shape from the third month onward, I know the company needs a serious reality check. It took time to degrade to this situation and it will take as much time to climb out of it.  As Winston Churchill said, “If you’re going through hell, keep going.” The only thing I’d add is to do it fast.

1. Create as many qualified leads as fast as you can.
2. Bring the pipeline into reality land as soon as possible.
3. Recruit as many executives, sales managers, marketing managers and sales engineers as possible to assist the salespeople in scheduling as many face-to-face sales closing meetings as possible.
4. Don’t be surprised if the pipeline gets worse before it gets better.
5. Reduce spending, except for marketing, as it will take 6+ months to emerge.

Which brings me to the pipeline tool issue.

Without a proper tool for the salespeople to maintain and use for reports, the sales manager cannot have a firm grasp on forecast or the probability results. Make sure your CRM system can track:

• A timeline view of the future by month, by rep, by product, etc. Most systems can do it; not all do it easily or visually enough. Yes, the C-level likes pretty charts. Charts communicate quickly to all C-level managers.
• Track sales activities by rep: what is each doing with their time?
• View the sales stages, and be sure there are filters to adjust the view based on your specific sales process stages.

Successful sales management within any type of complex organization with more than a few salespeople can’t manage sales without a forecasting tool in their CRM system. Unfortunately, I have seen CRM systems in place where sales managers still rely on Excel.