5 Steps to Cull the Sales Pipeline Beast

At FICO, besides our popular credit scores, we also offer an array of decision-making software solutions for a wide variety of customers. These solutions have a high variance in complexity and price, and the typical sales cycle can range from a few months to a few years. As a result, we literally have hundreds of sales opportunities in-progress at any given time, and seemingly no two deals are alike. Thus, understanding our sales pipeline for the purposes of forecasting, tracking, and—most importantly—improving can be a challenge.

This challenge does not make FICO unique in the B2B enterprise software world. In fact, I imagine that taming the “pipeline beast” is a mission-critical component of any successful company within the industry. Without taking the proper steps, your company will be fighting this dragon with no armor. So unless you’re a fan of chaos and an extremely short-lived existence, here are five steps to making your company monster-proof:

1. CRM for B2B. Coincidentally, the first item on the checklist for quelling your B2B software pipeline dragon is to invest in some…B2B software. Specifically, you’ll need Customer Relationship Management (CRM) software. This might seem obvious, but according to a July 2015 Forrester survey of 757 North American and European companies with 1,000+ employees, only 34% are currently using an automated CRM solution. There are dozens of CRM providers on the market, all with various strengths, weaknesses, and price points, so you’ll want to shop around. The bottom line, though, is that gaining real-time visibility into your sales leads should be your objective, along with the ability to graph and create dashboards. “User-friendliness” should also be high on your list of priorities, because the second step toward gaining pipeline beast impenetrability is to…
2. …Require your sales force to update your CRM. This might seem intuitive, but having a great CRM tool with real-time visibility is useless if your sales personnel only sporadically update their deals. Sales people are often stubbornly set in their ways, so it’s best to nominate some champions, provide some fun incentives, and—again—select a tool that’s user-friendly as carrots to help ease your sales force into making regular updates on their opportunities. Pretty soon, many will actually start to appreciate it (often just in time for when you’ve decided to invest in a newer, more complicated CRM tool!).
3. Hygiene, hygiene, hygiene. Now that you have a CRM solution and buy-in from your sales force, you get to perform hygiene! At FICO, we refer to “pipeline hygiene” when we’re performing some of the following tasks: * Identifying sales leads that don’t have realistic expected decision dates * Identifying sales leads that are duplicates * Identifying opportunities that haven’t advanced in a long time, and—let’s face it—are probably dead and need to be closed out Believe me, these are just some of the common tasks. There are many others, but I’m sure you get the idea. The goal is to make sure that your forecasts are real, rather than garbage out as a result of garbage in. With clean forecasts, you’ll know where you truly stand as an organization. Moreover, you’re now in a position to influence those forecasts, which you can do by making some new friends.
4. Dashboards are your friends. Any CRM tool that’s worth anything will give you the ability to create dashboards—beautiful, colorful, unlimited dashboards that drill-down to whatever are the most weirdly specific characteristics you want to highlight. Here’s a personal example: I’ve set up a dashboard in my CRM tool that lists only those opportunities that meet all three of the following criteria: 1) they’re worth at least $250K in value, 2) they have an expected decision date that falls in the next quarter, and 3) they have a probability to sign of 25% or less. Why did I do this? Because these deals are notorious giving us a false sense of security of our overall pipeline value. On paper they’re worth a lot, but in reality they’re at risk for slipping through the cracks as the opportunity owners focus on more immediate leads. With my handy dashboard, however, my radar is up, and I use it to keep a steady dialogue with the opportunity owners. As a result, the owners can confirm that a) the opportunities are still viable, and b) they have what they need to get the prospects to sign…or if not, I can at least ensure that they’re closed out and not artificially inflating our pipeline value. In conclusion, dashboards will shine a spotlight on those pipeline gremlins and get them to scatter, leaving only the big bad monster.
5. Tame the beast! Obtaining a good CRM tool that’s updated and cleansed is necessary but not sufficient to defeating the pipeline monster, and it’s also the easy part. It’s one thing to have good data and solid forecasts, but if all you’re able to do is accurately predict an underperforming fiscal quarter (or year!), then the beast has still won. Dashboards will help you locate the beast’s weak spots, but you’ll still need good old fashioned analysis to truly put the beast in its place. Unfortunately, this usually takes some time, but a good place to start is with those deals that didn’t close. Think of them as fallen knights that contain clues to conquering the dragon. Use your dashboards to capture lost deals, identify and itemize the main reasons, and require the owners to perform postmortems that they share with others. Of course, nobody particularly wants to dwell on lost opportunities, but the odds are that you’ll eventually start to see some common themes that you’ll want to focus on with future opportunities (dashboards beget dashboards!). As an example, we noticed at FICO that early engagement with a newly generated lead is critical. In fact, we saw that if a salesperson has not followed up within 30 minutes of a lead’s generation, the chances that the prospect would eventually sign were greatly reduced. As a result, we used our CRM tool to track our performance against this 30-minute metric and dedicated staff to improving it. Sure enough, we soon started seeing a much higher success rate. Poof, the monster is now purring at my feet…