For a business to succeed, it has to be able to predict the future. You have to be able to know what your future revenue will be from your sales pipeline, in order to be able to plan your company’s future. This includes decisions on which markets to expand into, choosing products and services to concentrate on, and making intelligent strategic business decisions. This is where your sales pipeline should provide insight – but if your pipeline isn’t well-defined, or if it’s inaccurate, or if prospects just get stuck in the sales process, forecasting is impossible.
Your sales pipeline doesn’t move.
Your sales team has plenty of prospects most of the time – but few close. And the ones that do close take too long. Your salespeople don’t have the ability or motivation to push prospects toward closing. They can’t or won’t create urgency, or move a stalling prospect along.
You can’t properly assess your company’s sales pipeline.
If your sales team isn’t committed to the process, they won’t follow it. They may be inconsistent when it comes to updating reports on prospects. They might fluff numbers. They might ignore definitions and criteria and, entirely by accident, improperly report the status of prospects.
You can’t tell if your sales team’s prospects are legitimate.
Your salespeople may be wasting time on bad prospects without your knowledge. They may be exaggerating their reports to make things look better than they are. They may be reporting incorrectly because they aren’t speaking the same language. No matter the reason, if you don’t know what’s going on with your salespeople’s pipelines, it’s very hard to predict when sales will close and, therefore, what your revenue will be.
Your sales team isn’t on the same page.
If you don’t have a common sales language at your company, you will get inconsistent data. Your salespeople will have different criteria for the same stage of a sale, and because of that they may all have different ways of reporting the same things. Sales meetings will get bogged down and hijacked by unnecessary conversations about definitions and next steps. It won’t be intentional, but you will have inaccurate reporting of what’s going on in each salesperson’s pipeline. Because of that, the big picture will be skewed – and forecasting will be impossible.