Sales leaders and sales managers spend a lot of their time worrying about new opportunities. To ensure they have enough, many set an objective for each salesperson to have 300 percent of their goal in the pipeline. At the same time, they claim to want their sales pipeline to have integrity. One of the challenges with this approach to sales is that it doesn’t address the real issue: low sales effectiveness. When sales managers want a high number of potential deals, sales teams comply, logging lots of opportunities in the CRM. If your sales strategy requires you to have many more deals to hit your targets, there are a couple of truths you must acknowledge:
This handy guide to “Sales Team Management” can help you address these problems and more.
Your salesperson returns from a first sales meeting. They turn on their laptop, open your CRM, and document the “opportunity.” They add a few notes about the sales conversation, the decision maker's pain points, and the products and services the prospect is already using. Without knowing what the B2B customer might spend, they guess, logging a decent amount of revenue and a close date at the end of the month or quarter.
The salesperson is sincere. They are doing their best to create opportunities and trying to be a good corporate citizen and follow the stages of the sale. Even though the salesperson hasn't lied, many opportunities like this one turn out to be false leads—even if you desperately want to believe they are real.
To see the problem in your sales pipeline, open your CRM, and look for an opportunity logged, say, a month ago, with no activity since. Without knowing the salesperson or the client, I would bet that the record is not an opportunity.
There is a conversion rate that most sales leaders don’t calculate, which is the percentage of first meetings that convert into second meetings. Problems with pipeline integrity stem from allowing salespeople to enter records into the CRM before they are real opportunities. This conversation rate will provide you with a better understanding of sales pipeline management and improve your pipeline’s quality and reliability.
Watch this video about converting first meetings to second meetings to learn more about improving this conversion rate.
Sales leaders often believe they can achieve their sales goals because their pipeline reports that they have many times the revenue they need. While it's comforting to believe you have more than enough opportunities, it does nothing to ensure you meet your sales forecast.
The reason salespeople can't convert a first meeting to a second meeting is because they lack the value-creation strategies that would cause their contacts to agree to another meeting. Sales organizations that still practice a legacy approach to B2B selling have low conversion rates with second meetings. Because B2B buyers seek a better sales experience, they avoid second meetings and move on to other salespeople.
A first meeting is not real evidence of an opportunity. A second meeting is a better gauge to use to determine if there is a true opportunity in B2B sales.
To improve the integrity of your pipeline, change the rule that requires the salesperson to log an “opportunity” in the CRM after a first meeting. Instead, wait until the salesperson concludes their second meeting with the prospective client to determine if it is an opportunity. Logging first meetings is still important for tracking activity, so create a stage called “First Meeting” for your team to use. This makes it easy to determine each salesperson’s conversion rate when it comes to second meetings.
While you are working to improve the integrity of your pipeline, create a sales enablement project to help you convert first meetings into second meetings. The approach we use results in second-meeting conversions between 85 and 95 percent and a large increase in the pipeline.
First, identify any opportunities logged after a first meeting with no further action taken by the salesperson or their client. You need not delete them, but you must downgrade the status from “opportunity” to “target.” While you are cleaning up, you can safely do the same with opportunities that have aged out by downgrading any deal older than your average sales cycle, unless you have evidence of recent activity.
Impose a rule that logging an “opportunity” in the CRM requires a second meeting to be completed. This will prevent non-opportunities from destroying the integrity of your pipeline.
It is important for your sales pipeline to have integrity. The single, best way to achieve this is by marking deals as opportunities only after second meetings are logged. Key strategies for maintaining a high-quality pipeline include tracking the conversion rate from first to second meetings and implementing strategies and sales techniques that can help salespeople create more value for their clients.
By training your sales team to focus on value-creation strategies, they will convert more first meetings into second meetings. Focus on helping them to improve their win rate rather than creating more opportunities to lose.