3 Sales Pipeline Management Principles to Live By

The dangers of an inflated sales pipeline

The reality is that many pipelines are stuffed full of opportunities that are not healthy. They are clogged, inflated, and bloated — you’ll hear these terms used concerning pipeline management. They all mean one thing:

Your pipeline is overflowing with opportunities that continue to sit at each stage of your sales funnel despite their low probability of closing.

‍

An inflated pipeline creates a false sense of security around sales targets, frustrates leadership, and costs thousands in lost revenues. The costs of wasted sales effort, misuse of sales management, and poor resource allocation are even higher.

Additionally, inflated pipelines weigh down B2B SaaS companies going to market because the bloat of bad data coming from inferior leads makes it harder to learn about your ideal customer profile. The low-probability opportunities in your pipeline create extra noise that drowns out the meaningful patterns and insights you need to identify predictable, repeatable revenue opportunities.

When you know where deals stand in your CRM and in reality, you ensure there are enough real deals to drive your growth goals.

Training your sales teams to prioritize pipeline management

It can be challenging to convince your sales teams to dedicate time to pipeline management when it seems like every hour away from selling is money lost. But, providing ongoing training for your reps around proper lead scoring and pipeline management pays dividends in the long run. Companies that train sales teams on proper pipeline management and have a clearly defined sales process see nearly 30% higher revenue growth than those that don’t.

Below we outline three pipeline management principles to guide your teams.

1. Embrace early disqualification of nonbuyers

Sales training often focuses on qualifying leads. However, considering leads with a qualification-first mindset can be problematic and lead to pipeline inflation. After all, it can take a long time to figure out whether or not someone is actually going to buy from you.

However, it’s much faster to identify who won’t buy from you.

Strategic pipeline management isn’t just about checking a few qualification boxes. It’s much more about the process of eliminating those who aren’t a good fit for your product. Saying “no” to leads that aren’t ready for your product — or that you’re not ready for — is the most important pipeline management skill you can teach your salespeople.

When you go to market, you must instill in your reps a mindset of lead disqualification as much, or even more, than lead qualification. Salespeople can easily confuse a prospect’s willingness to talk with an ability to buy. Using a rigorous lead-qualification model empowers your reps to sort the actual gold from the fool’s gold in your pipeline.  In the go-to-market stage, you will likely say “no” to most of the prospects that initially come into your pipeline.

2. Align teams on your current offering for value-based selling

Train your team to sell the product you are taking to market today, not the product you’ll have in the future. When your reps are trained with the mindset that disqualification is good sales pipeline management, they will be less inclined to pursue customers who aren’t ready for you yet. They won’t close deals with promises to work new features into the product roadmap. They will wait for a better time to bring those prospects back into the sales funnel as both companies evolve.

When everyone’s expectations align around the product’s current value, you gain right-fit customers and customer trust. You also gain important insight into your customer’s journey and how your product is received in the marketplace. That insight is critical in developing lead scoring criteria to optimize your sales funnel and scale growth.

3. Develop objective scoring criteria

Often B2B SaaS sales teams have poorly-defined lead scoring criteria (if they have any at all). As a result, reps move opportunities through the pipeline based on subjective judgments. That strategy inherently leads to pipeline bloat.

Instead, you must consciously develop objective lead scoring criteria for each stage of your sales funnel. Data should inform scoring criteria where possible.

Your ability to rely on existing sales data depends on the maturity of your company. Some early-stage companies may not have data to use. If your organisation falls into this category, consider the table below as a starting point in developing your scoring criteria:

As you use the above framework in the first three to six months of going to market, capture data from every sales interaction. More mature companies may already have such data on hand.

The more accurate and relevant sales data you have, the more strategic and systematic your lead-scoring models can become.

Predictable revenue is a result of repeatable processes

Predictable revenue comes when you build repeatable pipeline management habits and processes. Sales teams that close in great quantities have a plan and execute it repeatedly. Using a defined lead-scoring framework and structured sales flow positions your team to maximize revenue production and sustainably scale as you go to market.

When you train your reps to proactively manage their pipelines with a disqualification-first mindset, sell on the current product value, and use objective lead-scoring models, you fill your pipeline with realistic opportunities rich with insight to optimize your sales process. As your sales process moves from explorative to predictable, you can accurately estimate the time windows required for most of the key elements of your sales organisation’s operations, including how long it takes to ramp new reps, your prospecting sales cycle, and your sales cycle.

Repetition always trumps uncertainty, and with well-defined, repeatable pipeline management processes in place getting to predictable revenue is just a matter of when – not how.

Going to market is an exciting and challenging time for B2B SaaS companies, especially in today’s competitive landscape. If you want to capture success and sustainable scaling, your sales strategy must shift from an explorative approach to a predictable process. This begins with best practices around pipeline management.

Your reps are staring at their sales pipelines all day, every day. The pipeline guides their actions and provides a steady supply of accounts for them to focus on. But are they focusing on the right accounts?  Mastering pipeline management ensures your reps spend their time working opportunities with the highest probability to close, while also purging low-probability leads from their pipeline.

The problem with your pipeline

Which is better – a sales pipeline that holds $1m in opportunities or one that holds $5m in opportunities? Without knowing more about the quality of the deals in each pipeline and the velocity with which they are moving, it’s impossible to answer this question.

It’s easy to think that the more full your sales pipeline is, the healthier it must be. Many CSOs and CMOs have performance metrics tied to maintaining an enlarged pipeline number. And leadership often tout the sales pipeline as proof of how bright the company’s future is. However, those numbers aren’t always what they seem.