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How to Tell Leadership About Poor Funnel Health

There’s a new CEO or senior sales executive in your organization who wants you to provide funnel data to create a useful forecast. But, you know that the current funnel health won’t meet the aggressive revenue goals. You are nervous. You don’t know how to respond without hurting your credibility or putting your job on the line.

So, what do you do?

I am working with a client, let’s call him Mark, who is in a similar situation. Mark is an emerging leader and the vice president of sales for a division of a billion-dollar, international corporation. The company recently experienced a significant change in leadership, and those new leaders began assessing the revenue data available within their CRM. They reached out to Mark to ask for additional information to determine if the current funnel volume would allow them to hit their numbers.

Mark assessed the funnel, added up all of the sales opportunities, factored in the closing probabilities and found that there wasn’t enough to deliver on the revenue leadership expected. He knew that the leadership team was not going to be happy about the data. He also knew he couldn’t send questionable information or fudge the numbers.

Maybe you’re in the same position as Mark, and you don’t know how to provide disappointing funnel data to leadership. Even if you are not, you can anticipate that you will be asked for insightful data about funnel health, possibly soon.

Today, there’s an influx of skilled leaders making a move into new industries, and they expect appropriate data from the CRM and other internal systems.

Based on their experience, they expect that the data has been analyzed and acted upon by functional managers.

So, before you respond, here’s the advice I gave to Mark: Do your own diagnosis and prepare an assessment that identifies the biggest risk factors and recommended solutions for fixing the problems. Funnel health problems can expose underlying issues in the organization both inside and outside of sales. The purpose of sales enablement is to address the cross-functional components that support or obstruct revenue attainment.

If you can provide an accurate diagnosis with levels of recommended solutions, you can position yourself as a forward-thinking, credible and valuable leader.

To begin your diagnosis, start by asking yourself some general and some specific questions about the funnel.

Some key general, high-level questions might be:

  • Volume: Simply put, are there enough opportunity dollars in the funnel to meet revenue goals? Is there a balance in the number of opportunities in each stage of the funnel, or is it top, bottom or middle heavy?
  • Quality: Which organizational goals will be met with the current opportunities in the funnel? New product, account penetration, market expansion or margin goals? Do the deals fit an ideal customer criterion, or might the accounts and opportunities represent problems for execution and pricing pressures?
  • Velocity: Are deals moving forward at a reasonable rate? How many of them are stuck in a stage of the funnel? Could they have been placed in the wrong funnel stages that make close dates questionable? Have sales cycle times been protracted?
  • Integrity: What is your confidence that the sales team has accurately defined the opportunity, the solution, the revenue and the close date? What is your current culture around honesty versus forecasting numbers to make people look good?

To go a bit deeper in your diagnosis and explore the reasons for a revenue gap, try questions such as:

  • Why aren’t opportunities closing? Do the reps lack selling skills? Are the managers coaching? Is there a problem with sales support resources?
  • Why aren’t opportunities moving forward? Is there a lack of a common sales process? A poor understanding of the customer buying process? Lack of sales strategy? Are some of the sales already lost or not worth pursuing?
  • Why aren’t new opportunities being entered into the top of the funnel? Do our salespeople need help with prospecting and qualifying? Is marketing not creating the right resources to develop interest and leads? Is it a time management or prioritization issue?
  • Why are we losing opportunities to competition or no decision? Do we understand the reasons we win and the reasons we lose? Is there a pattern that managers can coach to? Can we differentiate? Do we understand the trigger point for the buyer and their sense of urgency? Are we leveraging it during the sales process?
  • Do we have the right people in the right roles? Has the buying process changed, has the competitive landscape changed that reveals that we need to rethink our hiring profiles?
  • Do we have the right technology in place for effective funnel management? How easy is it to access relevant performance metrics with the current system? Do salespeople actually use it?

Before you can accurately fix a problem, you have to diagnose it well. Many sales organizations spend a whole lot of money solving perceived sales performance problems without accurately diagnosing and prioritizing them. Millions of dollars were unwisely spent on CRM solutions in the ‘90s, and then organizations realized they needed processes first—and automation second. You can’t afford to spend unwisely.

As a sales leader, when you present the funnel data to leadership, and you’ve developed the right questions for them to use when reviewing the data, you are in a better position to get approval and resources to begin to solve the issues. This is how you prove your value, even in the midst of delivering disappointing news.

Want help diagnosing your funnel health? I work with sales leaders around the world and help them drill down, diagnose, develop observations, prioritize resources and put a plan in place to achieve better outcomes. Email me today to get started.