Your Sales Opportunity Pipeline Still Needs to Be Managed

A CRM system does not replace the need to proactively manage and maintain the sales opportunity pipeline, and it does not increase the productivity of your salesforce, increase revenue, or generate new customers.You have made the decision and invested in a fully functional CRM system with all the bells and whistles. It's now a breeze to handle all the orders and inquiries coming in with greater efficiency than ever before. The various departments touching your customers can provide a greater degree of personalized service.You also expected an increase in salesforce productivity - a positive impact on the bottom line as a result of your CRM investment - but it is not happening. Salesforce productivity, as measured by increased sales or revenue, has not improved. It takes the same number of salespeople to close about the same volume of products or services as before.What's wrong? Is it the economy? Has the market imploded? Are times tough? Are your marketing efforts misdirected? Is a market turnaround just around the corner? Or is it time to step back, review the basics, and focus on your marketing and sales processes, as well as your pipeline development?

CRM Is a Great Tool, But...

It's essential to understand where a CRM system fits in your customer acquisition, sales lead generation, and customer retention and growth activities. Previously, salesforce automation software (the precursor of CRM systems) was expected to automate a salesforce and therefore increase sales. Just as salesforce automation tools don't really sell anything, CRM systems can't stroke customers, manage relationships, and increase sales.CRM systems manage data, knowledge, and provide reporting capabilities to enable your company to develop and maintain good relationships with customers. Each interaction with that customer is available to everyone across your organization who touches that customer - allowing you to treat each one of the thousands of customers as a unique entity or individual.The value of CRM systems - to create more meaningful relation- ships with every contact and with every customer - is dependent on your level of planning and integration into the processes used by employees. It's a matter of process, discipline, and inspection.CRM systems are great tools for the salesforce, but they cannot be expected to solve the age-old problem of how to increase sales. They can't prospect for new customers or know which lead is most promising. They can't increase sales to existing customers or revive inactive customers. Your salespeople still do all this - they build and maintain their sales opportunity pipeline.CRM systems can offer great tools for marketing. They can respond to a bonanza of information with more targeted marketing plans and promotions based on assessments of the facts and results - less guesswork and the ability to understand ROI on marketing programs.However, in the end, your CRM system does not replace the need to proactively manage and maintain your sales opportunity pipeline - nor does it produce the same results.

Turning Marketing and CRM Systems Into Closed Sales

The marketing organization produces a multitude of activities to promote the company's products or services. Among the media employed are direct response and email, media advertising, radio/TV appearances, seminars or Webinars, trade shows, and interactive marketing. These activities have several purposes (brand awareness, launching new products, opening new markets, etc.) and are also expected to generate leads for the salesforce.The opportunity pipeline starts with getting prospects to raise their hands - to identify their level of interest in your products or services, to request further information, to describe their needs, and to ask specific questions about your solutions. In many organizations, these leads or opportunities are passed directly to the sales-force or to channel partners with little or no qualification.The problem with that approach is that it plays Russian roulette with your company's sales opportunities! Typically, salespeople focus their time only on those prospects ready to buy. The result:

  • Cherry picking. Salespeople have been known to ignore 80 to 90 percent of leads because they aren't sufficiently ripe for plucking. Instead, they pursue those leads that appear to be ones that will close sooner than later - the low-hanging fruit.
  • Not nurturing the sales pipeline.Those 80 to 90 percent disappear into the proverbial black hole. Salespeople, by nature, are closers and like to spend their time in pursuit - not nurturing. Unfortunately, the discarded leads may have been as productive or more so if properly managed and nurtured.

Marcom spends tens of thousands or even millions of dollars getting prospects to raise their hands, and the salesforce (whether direct or through channel partners) could end up disregarding 80 to 90 percent of the leads generated because they were not considered hot sales opportunities.

Questions to Ask About Your Salesforce

  • What happened to every lead generated in the past 6 months?
  • How quickly did the salesforce respond?
  • Which salesperson handled which opportunity?
  • How long did the average lead stay in the pipeline?
  • How many leads closed; how many are still opportunities?
  • How much revenue was generated?
  • How many were not sold?
  • How much revenue is being nurtured

If you can answer these questions and more, you're well on your way to build and manage the sales pipeline and grow your business. However, our experience is that few organizations actually have the discipline to do all of this - even though they've invested in a state-of-theart CRM system.What would result if your salesforce spent 20 percent more time talking to qualified prospects (those ready to buy) every working day of the year? Could they sell 20 percent more? What would that mean to your company's bottom line?That's why building and proactively managing the sales opportunity pipeline (nurturing opportunity, tracking leads, following up, managing the performance of assigned salesperson, etc.) is important for generating new sales/growing revenues and maximizing your investment in a CRM system.

Closing the ROI Gap Between Marketing and Sales

It's the nature of the beast. Marketing is primarily focused on the top of the funnel and measures success in terms of volume. "See how many inquiries we generated. Our response last week has been phenomenal." However, marketing really needs to probe deeper into the results from the inquiries generated to gain a complete understanding of its contribution.

  • How many inquiries turned into real opportunities?
  • How many sales were generated from this activity?
  • Did the revenues warrant the investment?

The salesforce or channel sales organization looks at the bottom of the funnel. They are looking at volume as well - the volume of short term business that can be closed soon.The tragedy is the gap between what marketing and sales are focused on (identified on the left side of Figure 1 as the "sales opportunity pipeline"). The lost opportunities remaining in the funnel could be quite substantial. Alas, in the absence of adequate sales support resources, they are no longer the primary interest of anyone. Without an infrastructure to proactively build, grow, and nurture these opportunities into short-term sales opportunities, companies lose huge volumes of sales and numerous potential customers.

The Bottom Line: Proactively Managing the Opportunity Pipeline Directly Impacts Revenue

Figure 2 shows the impact of a proactively managed sales opportunity pipeline on your company's bottom line:

  • More short-term buyers are found during structured lead qualification than when the salesforce cherry picks opportunities.
  • Structured lead qualification ensures that long-term buyers are also identified and nurtured, adding to the value of the sales opportunity pipeline.
  • Average sale value increases due to enhanced lead qualification.
  • More leads are converted to sales because leads are better qualified.
  • Overall sales cycle is shortened.

As this example shows, the ROI on a dedicated team whose purpose is to qualify and nurture all the prospects in the sales opportunity pipeline is significant - whereas the investment is comparatively small, whether handled in-house or outsourced.CRM systems provide data and information to better understand the relationship you have with your customers. They provide data to help your organization provide more personalized marketing, sales, and customer service. A CRM system alone will not (by itself) increase the productivity of your salesforce, increase revenue, or generate new customers.

Key Steps to Proactively Build And Manage the Sales Pipeline

Record the source of all inquiries. You will want to analyze where and when each inquiry originated - the marketing channel and method of response (phone, email, fax, BRC, Web). In addition,capture other information from prospects such as how they learned about your company.Qualify every opportunity. Either develop an in-house team or outsource to an experienced company that understands how to do this in your industry and for product lines like yours. Be diligent in understanding the true costs of building an in-house team; it is frequently more expensive than outsourcing.

  • Ensure you're talking to a decision-maker or a key influencer,at minimum.
  • Identify the pain. What is the need? What type of "fix" are they looking for - product, solution, services?
  • Quantify the potential value of an initial sale.
  • When do they plan to buy? Too many good salespeople have only a short-term perspective. They are less interested in sustaining or nurturing long-term opportunities.

Systematically distribute leads. Take the time to plan and focus on the criteria by which leads are distributed and appointments are set. This will greatly enhance the overall reception from the salesforce to the identified opportunities and the results.

  • How are leads distributed? Based on sales channel segmentation, geography, vertical industry segment, whether a customer or prospect?

Develop criteria for lead assignment. To whom and in what manner must the leads be delivered - vice president, sales manager, directly to the designated salesperson? By geography? By industry segment, size of prospect, or opportunity?

  • You will need to develop or purchase a partner relationship management (PRM) system for lead management and control of a third-party salesforce or a sales channel. If you outsource, be sure to select a company that can provide this.
  • Track leads while in the sales opportunity pipeline. Track longterm, larger, less ripe, undistributed leads while they are still in the sales opportunity pipeline and tag them for logical future focused follow-up. This major source of future business and needs to be nurtured and harvested when the opportunities are ready.

Develop compliance rules for the salesforce.

  • How quickly must an opportunity be followed up on once it has entered in the pipeline?
  • Quantify the value for forecasting purposes - of initial purchase, and the annual potential.
  • Timing: When will this opportunity close? How long will you allow the opportunity to remain in the pipeline? Develop incentives for sales staff (direct or channel) to keep the pipeline information updated.

Provide tools to manage the sales pipeline and ensure that the value of the leads is maximized:

  • Monitor pipeline activity and productivity.
  • Track salesforce and channel partner compliance.
  • Measure ROI from cradle to grave. (Measuring ROI on initial purchase only is a traditional marketing measurement but does not reflect the true ROI to the company's bottom line.)

Case Study: Financial Services Company

A major provider of business-to-business financial management solutions was feeling the competition. Through a series of projects, it began to focus on its lead management techniques and the impact that proactively managing its sales opportunity pipeline might have on market share.


  • Salesforce was organized into geographic territories and expected to generate their own leads for new business;
  • Salesforce reported being "de-motivated" by cold calling;
  • All leads and inquiries generated from a variety of channels (Web, trade shows, advertising) were passed to the sales- force via internal email and were unqualified. Internal email was not effective in tracking progress and follow-up;
  • No clear productivity benchmarks and related compliance rules from which to measure results and marketing investment ROI were in place;
  • A prior attempt at centralized, call center-based lead generation and qualification was both ineffective and not supported by the salesforce;
  • There was virtually no information to help manage and support the sales process: inquiry sourcing mapped to marketing and promotional activity, lead tracking, sales and lead management process, etc.;
  • Their view of the market was framed by assumptions and anecdotal data because there was no live data available through the salesforce; and
  • Self-reporting from the salesforce led to a limited understanding of sales close rates, cycle time, cost of sales acquisition, and sales productivity.

Sales Opportunity Pipeline Management Project Objectives

  • Increase alesforce productivity;
  • Increase revenue and volume of sales;
  • Enhance salesforce employee satisfaction;
  • Streamline lead qualification process;
  • Gather a truer picture of sales metrics; and
  • Capture market data and marketing program effectiveness.

Project Components

  • Strategy, planning, and implementation of a closed-loop opportunity pipeline development process;
  • Integration with company marketing programs to track and qualify all inbound marketing inquiries;
  • Outbound cold calling to generate qualified leads and appointments for field salesforce;
  • Appointment setting based on shared calendars to minimize need to reschedule;
  • Automated outbound and inbound lead distribution and notification to sales organization;
  • Online Web-based reporting for list, lead, sale, and market source analysis; and
  • Updating their database with accurate client information.

Project Results

  • Total annual revenue potential identified: $140 million-plus;
  • ROI: $40 in revenue for every dollar invested in the project (2.5 percent);
  • Hours per opportunity and cost per result decreases 15 to 18 percent year over year;
  • Metrics and benchmarks established for sales productivity and the sales process;
  • Every lead accounted for and tracked to final disposition;
  • Established comprehensive compliance management and measurement facilities to ensure every opportunity is handled appropriately through the sales cycle; and
  • Salesforce lead ratings showed improved employee satisfaction and increased lead quality.

Summary and Results

Client’s reaction: “We learned more about our market penetration and position in six months than we did in decades of doing business.”

All project objectives were met or exceeded with the added benefits of increased speed and accuracy for new-product introductions and other sales/marketing initiatives. The smooth integration of sales and marketing with disciplined lead management has not only resulted in increased sales and sales productivity, but has also provided total control over the customer-acquisition process.

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