5 Steps for an Effective Pipeline Review

By Steve Jensen

10 min read

In Sales, pipeline reviews have become much more than a necessary evil. They are a great opportunity for coaching, and when done correctly, they can be a powerful tool for highly predictive forecasting. Here are five rules for conducting an effective pipeline review that not only makes it easy to forecast—it will help your reps improve, strengthen your team’s commitment to coaching, and provide a larger framework for success.

Four Lenses

There are four lenses through which you should examine your salesperson’s pipeline. Each of the lenses represents a circumstance where things aren’t going exactly as planned. These are areas where you can step in and provide leadership and coaching to help your reps get back on track.

Stalled Deals— With Salesforce and Xvoyant, you can measure sales velocity by start to close, as well as by days in stage. When the current number of days-in-stage is greater than the average days-in-stage for an individual, that deal is stalled. Making this part of your pipeline review will help you quickly identify stalled opportunities before they become problems. Check to make sure that buyer verifiers have been met and that discovery was sufficient.
Must-Win Deals— Choosing an opportunity or two that are particularly important or strategic for a salesperson is a best practice. This is a great way to win key opportunities and teach salespeople how to accomplish key milestones at every part of the sale. Make sure you review the “Must Wins” in the pipeline review and set coaching goals to ensure these create buyer engagement and move predictably. This is an important place for you to participate in the opportunity rather than simply evaluate if the opportunity is progressing as scheduled.
Misaligned— Review the short-term and medium-term opportunities scheduled to close and make sure they are in alignment. When reviewing opportunities, build consistency in matching verifiers to stages as the first checkpoint. When you see opportunities advance to stages without the required verifiers, stop, and set goals around achieving those verifiers. If you can keep opportunities balanced with sales activities and buyer activities, deals progress with much more consistency and predictability.
Outlier Deals— When a salesperson is working on a deal significantly larger than their average deal size, make sure to pay particularly close attention to the purpose-driven activities and the verifiers created. A good rule of thumb is this: If an opportunity is 3X the average size for the rep, it is an outlier. The entire buying process likely is different when this happens, and your outliers may require a new set of sales activities and buyer verifiers.

Deal Coaching vs. Deal Chasing

One of the most common traps well-intending sales leaders fall into is “Deal Chasing.” It’s easy to understand why. A large percentage of sales leaders have a history as a high performing salesperson. Opportunity management is an easy way for a leader to be relevant to their reps. After all, most of the pressure associated with sales is related to “hitting the number.” So when a sales leader sees an opportunity they know they could close, it is often an irresistible temptation to jump in and close the deal.

The problem is deal chasers…people that jump in and take care of closing the business. They don’t create successful teams and they don’t help individual reps improve. These leaders become a crutch and this can become a bottleneck that prevents scale and rapid growth. “Deal Chasing” can also stunt the growth of a rep and even create confidence problems that can be difficult to overcome as the rep becomes more dependent on the leader to win.

Deal coaching is completely different. Smart leaders must resist the urge to jump in and take over. Coaching an opportunity is about creating purpose-driven activities that help generate “customer verifiers” in any stage of an opportunity. In a pipeline review, identify the customer verifier that will provide physical evidence that the goal of the sales stage was successfully completed. Then set coaching goals on the activities a rep can conduct to help engineer this verifier. This is where role-playing can be very helpful. Rather than simply practicing a skill, practice how to conduct the activity that will help in this specific selling situation. Practice every part of the activities or skills that will create an experience with a predictable outcome. What questions should you ask? What tools or content should you use? How do you create commitment vs. conversation? How do you follow up?

These are all things that Deal Coaches do. They let the rep conduct those activities. You’ll see win rates go up by double digits when deals are coached. You’ll see cycle time come down significantly as well.

Win What’s Winnable

The first order of business in any pipeline review is to “Win What’s Winnable.” Look at the opportunities scheduled to close in the current month (or whatever the most recent relative time period) and evaluate what is and is not winnable.

There’s a reason forecast accuracy is one of the biggest problems plaguing sales organizations today: most companies don’t have a good way of identifying what is winnable and what isn’t. As a result, salespeople use their best guess on what they can commit and what they can’t.

There are two easy ways to turn this weakness into a strength:

Establish a forecasting threshold. Don’t use gut feel or company averages when looking at a likelihood of winning. Instead, only use individual win rates for individual salespeople. Each individual will have different win rates at each stage of an opportunity pursuit. Part of why forecasting is so difficult is instead of looking at individual win rates, company averages are used. This creates a “Goldilocks and the Three Bears” scenario for sales leaders: When dealing with individuals, sometimes the average is “too hot,” sometimes the average is “too cold,” and only rarely is the average “just right.” But if you use individual win rates for individual deals at individual stages for individual reps…you can have a better read of what’s really happening. This allows you to set a forecasting win rate threshold. For example, anything with an 80% chance of winning might be allowed to be committed to the forecast. Anything below would not be. This makes it so an individual must be tracking for a realistic win rather than a long-shot win in order to forecast. Then you can set coaching goals to make sure the opportunity stays on track.
Use Verifiers. Whether a deal is at the forecast threshold or not, use verifiers to create purpose-driven activities for each deal you discuss with an individual rep. If an opportunity is below the threshold line and a rep wants to forecast it, set coaching goals on the activities that will help engineer the customer verifier that provides evidence that a deal really is winnable. If a deal is winnable (above the forecast threshold), have a coaching conversation on what verifiers need to happen in order for this opportunity to close on time, and as forecast (i.e. without discounting.)

Verifiers measure the “Buyer Engagement” side of the sales process. This is the side of the equation that provides insights into the areas of risk to a deal and the level of engagement a customer really has in this opportunity. Measuring the actual physical things a customer does that provide proof the goal of a sales stage was successfully accomplished is the easiest way to identify if an opportunity is really winnable and what needs to be done to remove risk and improve the forecast.

Pipeline Balance

One of the biggest traps that reps fall into is concentrating on current activities and neglecting finding and nurturing activities to keep the future pipeline full. You should divide your pipeline into three parts: current year, current quarter, and current month. Each of the three parts should be kept healthy by giving related activities dedicated time every day, and by establishing goals around the activities necessary to keep the pipeline healthy in every stage.

Pipeline is life in sales. Make sure you are setting goals around short, medium, and long-term pipeline balance in every 1:1. This is the only way to avoid the rollercoaster of filling up the pipeline and then having pipeline vitality suffer while a rep is closing deals.

Is It Enough?

Too many organizations have overcomplicated the sales process with an overwhelming amount of metrics, KPI’s, and other data indicators. The good news is you can simplify the sales process to three key metrics and still have predictability and sustainability in your sales organization. These metrics include:

Dollar Value of New Opportunities in Pipeline
Number of New Opportunities in Pipeline
Sales Velocity

The formula for winning is simple: Start enough, with enough, fast enough. The formula also accounts for two competencies: Finding Opportunities and Efficiency/Consistency in pursuing these opportunities.

If you get these three metrics in the right place, 80-85% of your sales variability is under control. You’ll still see unplanned things happen, but this will flatten out the variance associated with your individual sales engine.

You can work backward to see if you have enough in the pipeline to make quota. The equation is simple:

# starts x $ deal value x % win rate
Length of sales cycle

Start enough, with enough, fast enough. If your reps practice this mantra, not only will it improve your team in terms of hitting quota, but it will give you predictability in your forecast.

Conclusion

Pipeline reviews should be about identifying opportunities for fine-tuning, not “flogging the forecast.” A common mistake sales leaders make is having a pipeline review where they hope beating the pipeline hard enough might beat a deal or two out. The fear of “Not forecasting quota” drives sales leaders to put undue pressure on a rep with every deal in the pipeline. Pressure doesn’t drive performance. (For more on avoiding “flogging the forecast,” see the 7 Deadly Sins of 1:1 Coaching ebook.)

Following the five steps highlighted in this article will significantly improve your pipeline reviews by helping you assess and target specific opportunities, all while maintaining a watchful eye on longer-term balance. It will also help you in your coaching efforts and make your forecasting predictive and more accurate than you thought was possible.

If you have questions about any of these concepts or would like to see how Xvoyant simplifies the process with its award-winning pipeline module, visit the Xvoyant website or contact the sales team at 801-308-9200.

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Steve Jensen is VP of Marketing at Xvoyant