How to Correct Sales Pipeline Shortfalls With Demand Modeling
It’s easy enough for businesses to look back over past sales figures and see why pipeline shortfalls occurred. What is far more difficult is tracking efforts in real time in order to make corrections that will solve problems before they seriously impact earnings and undermine annual sales projections. The key to adjusting performance strategies on the fly is careful planning based on a solid understanding of annual trends, as well as the ability to collect, track, and analyze data in a timely manner. With appropriate demand modeling, your business can set realistic goals, measure performance in real time (or as close as possible), and make adjustments as needed to stay on track for success.
Roughly half of all businesses face issues when it comes to real-time reporting where waterfall performance is concerned. So by the time shortfalls in the pipeline are realized, it’s already too late to make a change. This is largely due to failures in demand modeling. It could, for example, relate to a lack of alignment between sales and marketing when it comes to setting goals and coordinating efforts. More likely, however, is a lack of visibility associated with a limited means of measuring waterfall performance and a lack of necessary details. It’s not enough to review broad performance – you must delve into detailed data concerning performance by regional markets, by season, by business unit or team, by tactics and execution, and more.
So how can you create effective demand models? There are several factors to consider. Looking back can assist as you move into the future with a realistic plan for targeting, measuring, and adjusting. Utilize past performance to establish a baseline for conversion, and ultimately, to hone efforts and expectations. A good place to start is by breaking down contributions by month and by function, as well as by representative deal size and available resources. This can give you insight into problems with syncing revenue goals between marketing, sales, planning demand tactics, and allocating resources. Don’t forget to spend some time addressing waterfall conversion and velocity – it takes time to convert leads and you need to accurately account for this in order to set realistic expectations concerning your sales pipeline.
Be aware of common capacity constraints. Companies often come up against unrealistic expectations concerning the ability to cultivate and convert leads. Time and money are of the essence, and engagement tactics for marketing and sales must conform to prescribed standards in order to avoid pipeline shortfalls. For example, teleprospecting should be regulated by the number of calls a rep can reasonably make during the course of a shift so that averages for completed calls can be forecast and worked into anticipated waterfall performance.
And of course, consider the need to find suitable ways to measure performance across the sales pipeline in real time so that you can quickly adjust strategies. Reporting should be frequent and granular. In other words, don’t limit yourself to quarterly or monthly reports and broad data tracking. Measure performance weekly or even daily, and pay attention to teams or even individuals. These activities will deliver the information needed to set realistic goals and make strategic adjustments immediately, helping to correct sales pipeline shortfalls before they tank performance goals.
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