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Here’s the deal. Most CRM’s never look or behave consistently. The CRM data will tell you, you’re gonna make your quarter only to miss it by 35% and that’s after pulling stuff in from the upcoming quarter. When a CRM has a split personality, it tells you different stories at any given time and rarely behaves consistently.
In other words, your CRM or pipeline will rarely accurately forecast closings. There is always more “stuff” in the pipeline than ever closes. It’s the most prevalent problem I see when it comes to forecasting and pipeline accuracy.
There is a real difference between open opportunities and active opportunities. Open opportunities are deals in the pipeline where there is a real customer need, where the prospect has said “yes” they’d like to learn more and there has been some selling going on.
What open opportunities are missing are real, measurable next steps, actions and tasks assigned to both the sales pursuit team and the prospect or customer. Open opportunities are real opportunities because there is a real need and an expressed interest. What’s missing is the customer’s participation in the sale and this can be deadly.
The only way a deal moves forward is when everyone is participating in the sale, both the prospect and the sales person. Every opportunity must have an active task or action designed to move it closer to the close or it’s not an active opportunity.
Active opportunities are opportunities where everyone involved is actively working to get to an agreeable close. The customer is putting in the research, evaluating, assessing, and decision making time. The sales team is putting in the problem-solving, delivery, information sharing and objection responding time. Active opportunities are just that, they are active; everyone is working towards the close.
So, what happens when your pipeline ratio between open opportunities vs active opportunities gets out of whack? You’re screwed, that’s what happens. Even though open opportunities are “real,” they are out of control and there is little selling going. There is usually a whole lot of “just checking in,” phone calls to the prospects with a lot of “we’re still interested, call us back" responses.
In most cases there isn’t much else going on. Open opportunities lack the selling discipline required to close. The salesperson, the prospect, or both parties aren’t putting in the selling or buying effort. There is no deal strategy and no real selection or evaluation criteria in place.
The opportunity just kinda sits there.
Open opportunities linger in the pipeline too long. Their close dates are constantly pushed out. Open opportunities do close, however, just at a much lower rate than active opportunities. Open opportunities waste a lot of time, as they divert resources and don’t use them effectively. Because there's no clear selling strategy, evaluation criteria or active tasks, open opportunities artificially inflate the pipeline. They make it impossible to see what’s real and what isn’t.
I know, I said fewer opportunities the better –sacrilege. But if fewer opportunities means a better ratio between active vs open opportunities, then fewer is better.
Active opportunities are far more valuable than just open opportunities. They close at a higher rate, win or lose. They don’t clutter the pipeline and waste resources. Active opportunities have the prospects participation. The prospect is working the sale with the salesperson. The prospect is engaged in the sale. Each party is doing their part to create and deliver the best possible solution for their needs. Active opportunities are also easier to manage.
How do you know an opportunity is active? Look in your CRM.
Ask the salesperson what the next steps are. Identify the deal strategy. Active opportunities have tasks associated with them and a task is not a phone call. It's a specific action with an associated objective that gets the deal nearer to the close.
Active Opportunity Objectives:
An active opportunity focuses on what it takes to move the deal to the next stage, closer to the close. If a deal isn’t moving from stage to stage, it’s not getting any closer to closing and that’s a problem.
Sales is about moving a deal from stage to stage. If the deal isn’t set up to move through the pipeline it’s not active, and that’s not a good opportunity.
As a sales leader it’s critical to ferret out open opportunities in the pipeline and reduce the ratio of open to active opportunities. If an opportunity doesn’t have an active task associated with it, work with the salesperson to get the deal back on track. Find out what each open deal needs to become active and get it. Don’t allow new opportunities into the pipeline without active tasks. Run pipeline meetings with the objective of making sure every opportunity is active and if they aren’t, create a new designation for open ones.
Don’t have a CRM or pipeline with split personality. Reduce the ratio of open vs active opportunities or your revenue will pay the price.
Jim Keenan is an international speaker, sales strategist, consultant, disrupter of the status quo, identifier of the elephant in the room and a sick “bump” skier. His consulting firm, A Sales Guy Consulting, is known for its ability to solve difficult, complex selling and leadership challenges locally and abroad. Keenan has been named one of the most influential sales and marketing people by multiple organizations including; Top Sales World Magazine. He's also been referenced in Forbes Magazine, Harvard Business Review, Business Insider, and many other publications for his straight, no frills, get it done approach to selling and making the number. Download as much Keenan magic as you want at A Sales Guy U.
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