Less than 50% of sales leaders indicate they have high confidence in sales forecasting accuracy. A forensic understanding of the pipeline is what enables leaders to manage based on fact, and the key to that is being able to forecast accurately. Closed-loop management processes are also essential to reveal shifting customer priorities and capture latent opportunities.
Salespeople do what their managers measure
Responsibility for the sales function means achieving sufficient control over seller activities to ensure predictable, reliable and consistent business results. As we’ve explained before, efficiency measures paint a picture of a busy sales team but negate data on the true quality of opportunities, leaving teams wasting valuable time on deals they will lose.
A robust opportunity-management process can identify early warning signs of slips and insufficient winnable business, so remedial action plans can be built. Inspection points should therefore be based on the events that make up the sales process: inspect the process and measure the quality of outcome from each event. It is the results of these events that are important.
We suggest attending to four key areas of inspection.
- Activity — awareness; being on the mental shopping list.
- Coverage — relationship management and keeping in touch.
- Productivity — sales velocities, selling hours and hit rates.
- Relationships — retain, add and grow accounts.
1. Activity
Prospecting activity, or pipeline-generation metrics that drive awareness, should reflect the number of C-level engagements, hunting licences, timetables agreed and budgets qualified. These are the leading indicators that you are building the right pipeline, not just a busy one.
2. Coverage
Coverage should be managed by a process that optimises the costs of doing business. By deploying a powerful qualification methodology, sellers focus only on deals that are winnable. Inspection points that ask what issues were identified from the last qualification review must feed into this.
3. Productivity
Inspection points that focus on productivity monitor the use of selling hours, on the premise that to increase sales we must use selling time effectively. There are four key levers to measure: available selling hours, conversion rates, velocity and transaction value. Sales leaders should measure each and support sellers in the ways each can be improved — the cumulative effect can have a significant impact on the top-level numbers.
4. Relationships
Customer relationships are measured by monitoring revenue and product or service growth, and by investigating changes in loss rates. Inspect how many account reviews have been done, how many organisation charts have been collected, and — more importantly — whether real business needs have been identified.
Inspection that helps, not hinders
The gathering of inspection data should not be counterproductive. Too many organisations put onerous reporting requirements on their sales force that are simply resented. Data should only be asked for if it is going to be used to make decisions; otherwise the task becomes an impediment, negating the value of the knowledge it was meant to create.
Explore with your sales staff the various stages of the sale and the number of variables that exist throughout the lifecycle. Examine what inspection criteria would work best for your business, and set quality parameters in your CRM that focus on how staff are engaging with customers. Done as a collaborative process, the team will be crystal clear on what is expected.
By adopting closed-loop processes, inspection criteria can be continually evaluated and refined on individual deal data — so the business can respond quickly to change.
From inspection to continuous insight
Such agility is made possible only when a strong closed-loop process exists, pulling through qualitative data from customer engagements. The end result is greater forecasting accuracy, a common language amongst sellers, and greater control of the sales function. Holding all four inspection areas live, on every deal at once, is exactly what SCOTSMAN® AI is built to do — turning periodic inspection into continuous, evidence-based insight.
