On 12 March 2019, the London Sales Operations Network met at Kluster HQ to talk about pipeline visibility, accurate forecasting and reporting. Here are the highlights from that discussion.
R-A-G forecasting framework
Jody Clark (JC): At Cision, I had my own processes in place. I had been selling for about 5 years beforehand, so I understood the characteristics of good sales reps. They’re very organised, diligent, and they work to a process. And in a lot of businesses those processes aren’t even built into their CRM. So, I built in a forecasting process.
Then, when we merged with Vocus, the VP Sales there had a R-A-G (red, amber, green) forecasting framework, so it was a case of using the best elements of each process.
The process we had was based on three key questions: How are we going to win the deal? When are we going to win the deal? And why are we going to win the deal?
It was almost a framework for deal control and pipeline visibility for the reps. It also gave us all a common framework. Our forecasting methodology was built into the day to day forecasting process that was baked into our CRM. It worked really well – it always brought me to a 5-10% forecast accuracy – and I’ve been able to transfer that to other businesses that I’ve worked at.
It’s common to get into a cycle of not trusting the sales reps. Typically, the sales rep gives you a number and you take 20% off that, you then meet the CRO who takes 20% off that and then the CEO takes another 20% off that. So, what we tried to do with this process is make it a two-way street. That’s why the traffic light system works well with sales reps. We’ve got three pots – red, amber, green and we monitor how they move across the sales stages.
Alex Williams (AW): Do you then manipulate your stages in relation to red, amber, green?
JC: For me, the sales stages are part of the sales process and this is more of a methodology that sits on top of that.
AW: What is the criteria for the red, amber and green pots and what questions do you ask your sales team to identify which pots to put opportunities into?
JC: The core of it is: Why are we going to win this deal? When are we going to win it and how are we going to win it? In my experience, if you can answer these three questions you have control of the deal.
All of the questioning around the pots takes place in one-on-ones. The amber pot is when they can’t answer the ‘when’ question. It’s when there’s nothing driving the timeline. The red deals might be the classic, ‘I’m working on this deal but they need a content set that we don’t do.’ Or ‘It’s looking good but they need an API.’ The framework aims to make the sales reps question if the deal is worth their time. If it’s in the red pot, it might not be worth the time.
AW: Then it might move a stage backwards.
JC: Exactly. It’s quite a fluid framework. You’ll find that deals move through it. When you look at a sales rep’s pipeline, a lot of the time you’ll see deals in there that shouldn’t be. And so I’ve found that if it’s in a red pot you can communicate that easily and get it out of the pipeline.
AW: Pipeline visibility is about managing your team as much as it is about delivering a forecast to the management team. That’s the duality in the role.
AW: Jay, what qualitative information do you gather from your team from a Sales Ops perspective?
Jay Khiroya (JK): Doctify is very transactional with a short sales cycle. We haven’t even got to forecasting yet from a sales rep perspective because it’s too early to start.
When it comes to the qualitative side, we’re trying to get the sales reps to categorise their opportunities (post first sales stage) into hot, warm and lukewarm. It’s about questioning the reps and getting them to question themselves. Asking, for example, why a prospect would want to buy in the next 10 days. Reps can get very attached to opportunities. We’re showing them they don’t need to prove they’ve got loads of opportunities and pipeline. It’s about quality, not quantity.
Towards the end of the month, we look at what they’ve closed in relation to the hot, warm and lukewarm categories. We can point out, for example, that 20% of the opportunities a particular rep closed they had marked as hot at the beginning of the sales process but the remaining 80% were marked as lukewarm. This indicates there are areas the sales rep might not understand from their initial meetings.
AW: Both processes are a step into sales enablement because you’re teaching the individual sales rep to understand their deals better.
AW: What are some of the challenges you both face on a regular basis?
JC: Initially, we were doing a lot of this process offline. Then we went through a transition of getting it onto Salesforce and that month of transition was probably our least accurate forecasting month. So, I’d say scaling your process is a big challenge. It takes at least a quarter to bake this into salespeople’s behaviour. It’s about selling the value to the sales reps. In my experience this has to be done on a one-on-one basis. Once it’s baked in and it becomes behaviour, it works really well. But the initial period is about changing behaviour.
JK: A couple of big challenges are firstly, when you work at a company who put a lot of money towards sales tools, you need to be careful you don’t get carried away and buy every tool available. Make sure each tool adds value.
Secondly, setting up your CRM and getting the basics right before you buy any tools. Get the sales stages set up properly, any reports you need, entry and exit stages etc. The sales function will fail if these aren’t set up correctly.
AW: Currently, you’re at an early stage with your team. You’re going through this process of educating. How does that work with your stages? Are the team switched on about when to exit and enter the next stage?
JK: A challenge that I found when I first joined was because of the lack of historical data, they weren’t exporting reports every week. Ideally, you need to either be exporting reports every week or activating historical tracking so you can look back at what’s happened at each sales stage and you can get that overall view of pipeline. Analytics is huge, and this is one challenge I have found in joining an early startup. Once we’re in a better position, we would invest in a tool that can analyse more than I can do using Salesforce and complicated excel spreadsheets!
Also, there was no methodology for when to create an opportunity. You need to ensure everyone knows the process around creating opportunities and what each stage means. We’re in a good position now where we have each sales stage clearly defined and we’re constantly refining those definitions with feedback from the salespeople of what’s working and what’s not. The next stage is automating everything – trying to make the salespeople’s lives easier.
AW: And do you both use Salesforce? Is there a technology you’ve used that has made a meaningful difference in your ability to analyse data?
JC: To go back to Jay’s earlier point, we’ve got a lot of tools. We’ve got everything from Gong to Salesforce. Now, we’re going through a process of looking at our sales process and working back from there. It’s so important to get that right and think carefully about each tool because if it doesn’t give the salespeople value, adoption will be really low. When you roll these things out, you need to work with the salespeople and make sure it enhances what they do. Currently, we’re looking at what happens when a lead comes in and we’re creating a process around that, asking what tools could help with that and how can we implement them.
I’m a big fan of using a single tool. And I really like Salesforce, so the more you can do inside Salesforce the better. I think it’s the same from the reps’ perspective. You can drown in all these tools and then lose your workflow and efficiency. But there are lots of tools you can layer onto Salesforce to enhance your ability to analyse data.
You can get more sales pipeline tips in our guide to sales pipeline management.