3 Reasons Why You Should Manage Sales Activity Instead of Pipeline
As a sales leader, how do you manage the performance of your sales reps? Do you focus on pipeline or activity? Of course a rep’s pipeline is the shiny object to which sales leaders’ eyes are immediately drawn as it shows the revenue expected to close and whether the rep is on target to hit their numbers.
Pipeline is important, because it provides managers with details such as how long an opportunity has been open, estimated close date and general information on the prospective company (i.e. number of employees and year founded, to name a few.) But these are all "on the surface" details. They tell you nothing about how the deal is being worked and the activity that is driving the pipeline -- information that is integral in ensuring accurate forecasting.
That’s why you can't overlook activity. A sales rep’s activity creates and drives pipeline, and it provides managers with a true understanding of what’s happening within their business.
Here are three reasons how managing activity instead of pipeline leads to better sales.
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1. Manage based on data, not hunches
Let’s be honest, most sales professionals are optimistic about the prospects of a sale. Human nature infuses bias into the analytics when a salesperson is left to manually input data -- calls made, appointments set, notes from calls -- into a CRM or sales system. This data can be subjective, speculative, outdated or not inputted in a timely manner, making it difficult for leaders to accurately measure the performance of their teams.
This is precisely why relying on and managing solely based on pipeline can lead to false expectations. If a certain deal is put into a rep’s pipeline yet her activity shows very minimal work has been done on the deal, we have a problem.
This is where data -- accurate data -- is key. The ability to manage a sales team is significantly enhanced with access to data such as call attempts, connections, length of call and outcome. With this type of activity data, managers have the ability to gauge performance against benchmarks and across groups. Additionally, technologies such as speech analytics monitor sales conversations and flag keywords or emotion that prompt further review. With this sales intelligence in hand, leaders can establish best practices, optimize team performance and gain new confidence in forecasting and revenue goal attainment.
These analytics also help sales managers flag underperformers more quickly and identify where and why they’re falling short -- and the same can be applied to top performers as well. By understanding what top performers are doing well and what techniques are successful, managers can employ these tactics across the team to improve outcomes.
2. Chop dead wood fast
For most sales organizations, reps adhere to a standard number of calls to make each day, week and/or month. This is a completely standard process, but if we’re being honest, often reps either call the same number several times, call their friends’ and friends of friends’ numbers or whatever trick they have up their sleeves, just to hit the required sales number and to get their manager off their back.
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As a sales leader, wouldn’t you like to know whether the aforementioned is happening across your sales team? Sure, having your reps hit the required number of calls is good for the pipeline but is it truly helping to close deals and giving you insight into who is performing well or poorly… and just as importantly, why? And who simply isn’t capable at selling your product and needs to be terminated?
Activity tracking exposes best practices as well as underperformance, allowing organizations to minimize costs by making personnel decisions before time and money is wasted. The ability to introduce new employees into a proven, standards-based training program reduces ramp up time and increases the probability of rep success.
3. Gains trust with the C-suite
If sales reps feel the pressure from managers, then you can bet your bottom dollar that the manager is feeling that same (if not more) pressure from the C-suite.
That’s because sales and accurate forecasting affect all facets of a company and its operations -- revenues, resource planning and investor relations, to name a few. Without a clear understanding of what’s driving ROI, C-level executives don’t know what areas of the business are working and which require attention.
Often C-level executives refer to sales teams’ pipeline to determine what revenues to anticipate and forecast. But what happens when forecasted deals don’t pan out? And if sales is consistently not hitting the forecasted pipeline, how can executives find the reasons why? This creates a huge black hole between what sales is doing and what the C-suite is seeing. Furthermore, these types of indefinite estimates and forecasts can diminish executives’ confidence in sales leaders.
Sales leaders can bridge this visibility gap and subsequently gain trust with the C-suite by managing sales based on activity and accurate data. Whether you work at a large call center or a company with dispersed offices, sales intelligence and analytics helps leaders gain visibility into reps’ activity to better manage sales performance and accurately forecast. If sales reps make calls remotely or from a centralized location, new sales technology is empowering organizations to capture and analyze sales activity data, regardless of agent/rep phone or device, and eliminate manual documentation processes to create reliable, actionable sales data -- data both sales leaders and the C-suite can refer to and rely on for accurate forecasting.
Pay attention to the activity! Accurate activity data will allow both you and management to have a true understanding of what’s going on in the business and whether pipelines are achievable.
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