Is Your Pipeline Fact, Fiction, or Fantasy?
Fiction and fantasy are great for books and movies, but not for sales. Your sales pipeline is your company’s lifeblood. Everything depends on it. However, at many small and mid-sized companies today, VPs of Sales aren’t managing their sales pipelines as well as they could be. At the end of the quarter, instead of seeing the solid results they had expected, they suddenly find themselves stuck in the realm of fiction and fantasy, scrambling to make their numbers and unsure of what went wrong.
Fiction and fantasy-based sales pipelines often result from two possible scenarios:
1) When a company either has no existing CRM system in place, and therefore no measureable process for tracking sales information; or a CRM system is in place but is not used effectively and/or has very poor adoption by the sales team. This is a fiction-based pipeline because the manager doesn’t have accurate sales information by which to compare his pipeline from one time period to the next and can only rely on his or her opinion and “gut instinct” when interpreting the pipeline. The problem is that gut instinct is based only on anecdotes from one’s past experiences, and unless your industry and your business aren’t changing, the information and impressions on which your gut instinct is based are now outdated. So, given that nearly 50% of companies today do not have a CRM solution in place, unless you have some solid and accurate numbers supporting your impressions, it is very likely that you are working with a Fiction-based sales pipeline.
2) In the second scenario, a Fantasy-based sales pipeline results when a CRM system is being used properly, but the manager takes the numbers generated by the CRM system at face value, without checking to see what is going on behind the numbers that could potentially render them innaccurate. The result is that your pipeline could be real, but even if you are properly using an effective CRM system you cannot get the complete views of your pipeline that you need to be able to see if those numbers are standing on solid ground, or if they are just fantasy figures. For example, some common traps that managers fall into because they can’t easily get the necessary information are the following: expecting deals to close when they are actually stuck in the pipeline, looking at just the overall pipeline totals without looking at what has moved in and what has moved out and when, counting on deals to close without taking into account the performance of the responsible reps, not knowing the trends in your conversion rates, and not knowing how long it takes each of your reps to “ramp up”. These are all things that you need to know to be able effectively monitor your sales pipeline, but a CRM solution just doesn’t have the ability to produce this information.
A business intelligence solution is the only way to quickly and easily get the answers to the complicated business questions you have and generate a complete and accurate picture of your sales pipeline at all stages of the sales cycle. CRM systems are valuable, but their focus is on capturing sales and customer data and automating processes. The critical second half of a complete sales solution is analytics, which focuses on getting the relevant and timely information back out and structuring it in a way that can be easily analyzed and understood.With the right approach to analytics that are actionable, you’ll optimize and improve sales processes, not just automate them. You’ll always have a complete, accurate, and up-to-date view of your pipeline, so you can be confident that the decisions and predictions you make are going to be based on Fact, not Fiction or Fantasy.
A new breed of business applications is emerging that are being delivered as an on-demand service (SaaS). These applications work by pulling in data from sources such as your CRM system (salesforce.com), Excel spreadsheets, and your financial / accounting system and then analyzing and ouputing the result of any combination of these sources and presenting it in an easy to understand format whose specifications you can control. You can take a snapshot of your opportunities at the beginning of the quarter and compare it to your current pipeline. You can compare the percentage of deals in your pipeline by stage, revenue, region, and sales rep’s performance. You can perform product and discount analysis, and easily track deal movements and trace variances of deal amounts against their initial projections. You can also determine the number of new customers by quarter, region, vertical, and % of pipeline and perform analysis across objects for which no pre-specified combination exists. You may have questions such as, “Which partner helps us sell better against competitors A and B?” and “What is the correlation between closing rates and regions, sales rep skill levels, and % of leads that became opportunities and eventually deals?” With an on-demand business intelligence application, you can easily get answers to these kinds of questions so you can be sure you have a complete understanding of your pipeline bolstered by all the facts, not just static numbers that could be fiction or fantasy figures.
What’s more, you don’t need a large IT budget or any existing IT infrastructure to begin using an analytics solution that is delivered as an on-demand service. The application should be designed to deliver the relevant historical and current information you need to fully understand your sales pipeline and take the appropriate action. Thanks to the SaaS model, you simply login to start seeing what’s really going on in your sales pipeline. So stop missing your forecast targets and performing unnatural acts at the end of the quarter to make your number. With the right on-demand business intelligence solution, you’ll never be surprised because you’ll be sure that your pipeline is based on Fact, not Fiction or Fantasy.
Learn more at www.lucidera.com
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