Purchasing in the businesstobusiness environment has changed in the last year and a half.  Buyers are more critical, more informed, and more careful with their spends. Their shrinking budgets have eroded sales, which has caused sales organizations to become hyper vigilant on lagging indicators like revenue, sales-to-quota, and close ratios as a measure of success. However, lagging indicators only allow for postmortem analysis. 

Conversely, leading indicators allow for course correction before targets are missed. Here are three leading indicators that can help you reach your revenue goals. 

  1. Opportunity Pipeline Value – This is a good, early quantitative indicator.  This ratio should mirror your close ratio.  Do you close 1 out of every 3 opportunities?  Then you need 3 times the dollar amount in qualified opportunities to make your annual quota plan.  
  2. Meeting Summary – This is the best qualitative measure I know. A meeting summary is a written communication between buyer and sellerWhen this is a customer-facing document, then important analysis can happen. Managers can see whether this is a qualified opportunity or not and if the sales person is spending the appropriate amount of time to move the sale along. Also, sales people tend not to exaggerate the size of the opportunity when it is discussed and reflected back to the customer, which makes the pipeline totals more accurate.   
  3. Implementation Plan – This is another auditable, qualitative checkpoint. A clearly communicated plan between buyer and seller, crafted while the opportunity is still being developed, shows commitment on both sides. First of all, it’s auditable. A manager can look at the plan and offer steps that have been missed and strategies to ensure closing. Also, the probability to close increases to 80% when the customer is involved with an implementation plan, thus making the opportunity pipeline numbers more reliable and concrete. 

Above all leading indicators, it is the auditable documents that track the communication between buyer and seller that provide the most accurate lens for the “crystal ball” that we call sales forecasting.  Let us help your organization create auditable documents and an improved focus on leading indicators.   

 

You just wrapped up the first half of 2019. In the next week or so, you’ll have a full tally of how your sales teams did with top and bottom-line results. For many, the Summer comes in fast and furious as you recover from the mid-year push and assemble your teams to plan for the rest of the year. 

So, exhale for a moment and breathe deeply; now is the time to take a good, hard look at your opportunity pipeline for the balance of 2019. Are there enough qualified opportunities in development to enable you to exceed your revenue plans? Ignore the old adage that you need to have “three times” the revenue in your pipeline to hit your annual plan – it’s not only a bad guess for how to hit your number, but it’s also a dangerous precedent for sellers who aren’t sure what a healthy pipeline actually looks like. 

Here is what your sales leaders need to do NOW to make sure there is enough revenue working: 

  • Establish Qualified Opportunity Criteria: this should have been done by January 1, but if you haven’t done it yet, it’s not too late. Make sure each member of your team knows the criteria required to categorize an opportunity as qualified. (We have done this with our customers, and can send anonymous examples to you by request to john@drive-revenue.com
  • Coach Opportunity Development EARLY: don’t wait until the negotiation is coming to a head to parachute in and close the deal for the seller. Salespeople learn nothing from this, except perhaps how you close, which won’t help them when you aren’t there. Set a schedule with each of your reps to coach them on how to successfully navigate their open opportunities, and make sure a complete job is done in early stages. 
  • Practice Skill Conversations: from prospecting to qualification and all the way through negotiation, make sure your team members are fluent in all aspects of the conversations they will have with customers and prospects. Not all sellers need every skill improved; a good benchmark is to pick one skill per rep per month and ensure that it is really mastered. 

Once you have these basics in place, we can look at how to build the right opportunity mix for a healthy, balanced revenue pipeline. But without doing the work to establish opportunity criteria, coaching opportunity development and practicing skill conversations, you’re sure to have some gaps in your pipeline that will make it very difficult to achieve your annual plan. If you do the heavy lifting now, you will avoid the year-end fire drills that many organizations go through to hit their numbers in Q4. 

Very few people stay in the same job or career for their entire life. My Uncle Jerry Rowan worked as a salesperson for DuPont for 37 years, and my father-in-law Dr. Stephen Nohlgren taught Biology at the same college for 43 years,  but that longevity is rare to find today.

I found it in Philadelphia on June 18th, watching Mick Jagger and the rest of The Stones rock out an evening with a great show. And while it may not be the heyday of their career from an artistic productivity capacity, it is still quite amazing to watch them perform.

Who do you know who has been committed to their career in a similar capacity for an extended period? Drop me a line and let me know. Until then, click on the link above to hear more.

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