Pipeline Management and Optimization
Run a Google search for “pipeline management” as a newly-minted Chief Revenue Officer, and you’d be forgiven for thinking it’s a matter of CRM hygiene. If there’s one thing marketing, sales, and customer leaders could unite around, the scourge of so-called “dirty data” would be at the top of the list. Forbes research estimates that bad CRM hygiene can cost organizations up to 12% of overall revenue.
While that number is nothing to sniff at, when we put the question of pipeline management and optimization to our community of forward-thinking CROs, data integrity was cited as an effect of the poor pipeline but not a cause.
That’s because experienced revenue leaders understand that lead flow issues aren’t a technology problem but a human one.
Whether you’re a head of revenue new to the position or tenured but new to the organization, read on to discover how your peers are thinking through pipe generation, management, and optimization.
Opportunities Have A Shelf Life
One of the most strategic moves new revenue leaders should take upon entering the position is to create top-down clarity around pipeline quality and expectations. Revenue leaders should ask their front-line managers a few straightforward questions:
What deals are genuine opportunities versus labeled an opportunity in name only?
Which deals that are hanging in limbo and clock in above-average deal size?
Which deals have been sitting longer than average in the same sales cycle stage?
If sales managers and their reps can’t answer these questions with certainty, then these deals should be removed from the pipeline altogether.
It can be a tough decision on the front end to have to explain to the CEO and CMO why you’re wiping previously forecasted opportunities from the forecast. Still, the best revenue leaders understand the difference between deals with real revenue potential and commitments logged for activity’s sake.
And for in-seat revenue leaders who’ve cleaned the pipeline but are still struggling to find the leaks? Consider the P’s of sales to diagnose opportunity quality by taking a holistic view of your organization by examining:
People
Pitch
Product
Processes
Patch
Prospects
Price
There are average benchmarks within these factors, so any outliers are a solid point of focus for greater scrutiny (e.g., a rep with several deals that consistently get pushed to the next quarter).
As one CRO stated, “Building a model without a baseline is difficult to do. Focus is key.”
Everybody Is On the Hook
Pipeline management doesn’t have to be hard, but it does have to be intentional. The rapid move to digital buying habits means that the old analog ways of selling have become a relic of the past. In a modern selling motion, everyone in the revenue engine is responsible for lead generation — including Account Executives.
If pipeline is a revenue leader’s lifeline, outsourcing most of the pipeline generation to another team (i.e., marketing) can leave a CRO in a precarious situation. Best-in-class revenue leaders not only expect their tenured sellers to prospect and deepen relationships with existing customers, they demand it.
Where do Business Development Representatives sit in the organization — sales or marketing? — and what percentage of deals marketing has been asked to commit can be integral to a CRO. But they don’t have to be proxies for ultimate success. Meanwhile, widening and deepening relationships within existing accounts can provide low-hanging fruit for recurring revenue.
Digital tools and social platforms can empower sales teams to generate repeatable revenue and enable sellers to build a network of trusted relationships. These can safeguard accounts from churning whenever the account’s internal champion leaves.
In short, revenue leaders have never had more revenue intelligence and actionable insights at their disposal than they do now.
Alignment: From A Nice-To-Have To A Need-To-Have
Once best-in-class revenue leaders create clarity around actual opportunities in the pipeline and enable their sales teams to have value-based conversations on the digital channels their buyers prefer, the final piece of the trifecta is ensuring that all teams within the revenue engine are in lockstep.
To quote one CRO, “Each of my regional leaders holds a weekly demand generation call with all stakeholders. We use CRM to measure where we are against what is needed and what is committed (those are different) for pipe creation and maturation (looking at raw pipe — unweighted — but also a rolling four quarters of weighted pipe).”
Other revenue leaders agreed that weekly calls with stakeholders across the revenue team to review deals, strategize on engagement, and hold each other accountable to the metrics ultimately drove a higher quality pipeline and better overall alignment among cross-functional teams.
Bringing It All Home
Tenured sales professionals who’ve worked their way up into top revenue leadership positions are no strangers to being pulled a hundred different ways by the demands of the organization. The best-in-class have learned to identify their key strategic and operational goals and disregard the whirlwind of day-to-day activity.
Revenue leaders can deliver immediate value by bringing clarity up and down the organization around viable opportunities in the pipeline versus the noise. They don’t wait on other teams to deliver leads but instead empower their front-line sellers to build pipeline and develop trusted relationships with current and prospective customers.
Finally, they bring cross-functional revenue teams together to align around activities, metrics, and expectations.
What is the Numentum CRO Playbook?
A community-sourced guide that enables new and existing revenue professionals to quickly get up and going, optimize existing processes, and win in the Age of Buyer Experience. These aren’t theoretical insights: all information sourced herein has been provided by experienced Chief Revenue Officers from different industry verticals and company maturity stages.
See something you’d like to comment on or contribute to? We’d love to hear from you. Shoot us an email at info[at]numentum.com with the subject line CRO Playbook. You can also contact us here.
