By John Holland, Chief Content Officer, CustomerCentric Selling®
The point of my last article was that the integrity of data determines how accurate CRM forecasts will be. A while ago I learned a different way to look at the acceptance of change within organizations. The people most willing to embrace change are those that derive benefit.
You can graphically show this by plotting benefit on the y-axis and disruption of the x-axis. The “happy” quadrant is the upper left for the titles CEO, CFO, VP Ops, etc. Slightly more to the right would be Sales VP’s as they are more involved in the implementation. For senior executives there is significant upside with minimal disruption when implementing new CRM systems.
The “unhappy” quadrant is the lower right. The primary titles are IT (they have to implement and support the new software) and salespeople who ironically serve as the data entry staff. Sellers ultimately experience high disruption and few expect to receive much benefit. For these reasons few sellers embrace CRM. They have many concerns, some of which are valid:
- The system asks for extraneous information
- They hate to enter volumes of data for unqualified prospects
- The data entry required often doesn’t conform with deal flow
- Milestones are defined for large opportunities and are overkill for smaller ones
- The feeling is that “Big Brother” is watching
- Forecasts don’t reflect “gut feelings” on transactions
Few organizations try to sell their sales staff on benefits they may derive from CRM software. By failing to do so, they run the risk of having disgruntled staff entering data – NOT a recipe for getting accurate reports from the system.
Sellers less than YTD against quota want their managers to believe they’ll catch up in the coming months. In my experience as a sales manager, once unqualified opportunities enter the pipeline they’re difficult to extract as sellers merely push back close dates (enter self-serving and inaccurate data). What percentage of opportunities (including stale proposals) in a seller’s pipeline will ultimately close?
Rumors may circulate about the new CRM software. Some sellers work around the system. If they feel win rates are being monitored they’ll delay entering a new opportunity until they are pretty far down the road. In extreme cases they wait until the business is won before entering it, defeating the purpose of allowing sales managers visibility so they can coach sellers.
Within CCS® we suggest an ongoing qualification process. I like the term used by Ronald Reagan when referring to the Russians in the mid-80’s:
“Trust but verify.”
The key to me is trusting that sellers enter realistic opportunities in their pipeline, but defining steps moving forward based upon buyer actions (rather than seller opinions) to achieve milestones.
Without wanting to micromanage, the first step in entering an opportunity is that a prospect or buyer has shared a business goal (or business problem) they are hoping to achieve through the use of a seller’s offering. This is consistent with our first core concept: No goal means no prospect.
Sellers can be less than forthright in loading their pipelines with “opportunities” where goals have not been shared, so it’s the manager’s job to decide whether to purge unqualified line items from the forecast. This can be done by linking buyer actions to milestone achievement. A few examples:
- Having sellers write emails requesting access to other Key Players in committee sales. This means asking for access to those titles. After reviewing such an email a manager can grade the opportunity to the “Champion” milestone.
- Over the next weeks, the manager must verify that the seller has been granted access to the titles requested. If a month goes by and access has not been granted it may be time to downgrade the milestone status or disqualify the opportunity.
- On large opportunities after all Key Players have been interviewed, sellers could be asked to determine if there is consensus from the committee to continue their evaluations of the offering. If so a written Sequence of Events (SOE) with activities and dates can be negotiated, culminating in delivering a proposal in a timeframe requested by the committee. Once the SOE is in place, sales managers can grade the opportunity to be at the Evaluation milestones.
- Consistent with the “trust but verify” approach the manager should be able monitor that activities are being completed. Slippage of the dates within the SOE can be early signs that not all is well. Key activities in the SOE (i.e. a written cost vs. benefit) can provide the buying committee or vendor to withdraw from the evaluation.
Ultimately, the sales manager “owns” the pipeline at a relatively early stage. His or her primary job is to help sellers understand the difference between activity and progress. The reality is that sellers try to show that things are qualified. My suggestion is that managers evaluate opportunities more from a perspective of disqualifying those without a high probability of resulting in orders. The worst possible outcome for sellers/vendors is to go the distance and lose.
The combination of collecting historical close rates with measurable buyer actions linked to milestone achievement should go a long way toward improving forecast accuracy.