Few jobs are scrutinized as closely as that of a CEO or a VP of Sales. Afterall, CEO's have to answer to their stakeholders and the VP of Sales has to answer to the CEO. It may surprise you to learn why the average tenure for a VP of Sales is only 18 months. The obvious reason is that annual sales targets were missed. While this certainly is a factor, the real reason is that the VP of Sales couldn't accurately project actual results throughout the year. This inconsistency wreaks havoc in organizations. Executives have to explain the revised target, then re-explain why the revised target wasn't met either. Budgets are adjusted based on the revised target, then adjusted again when the target drifts once more. Stock prices dip. Emotions flair. So, how can a VP of Sales generate more accurate forecasts and, at the same time, enhance the productivity of each and every rep? The answer lies within a pipeline management process.

Visualize that each of your salespeople applied a consistent, and auditable, classification to each sales opportunity based on where they are in the sell cycle. Visualize also that you can calculate the probability that an opportunity will close at each classification. Finally, visualize that you can review a report of each sales person's pipeline and provide coaching based on their individual challenges. Let's take a look at the following pipeline report and see how many of you can accurately identify which rep has the highest probability of hitting quota and why.

First, some background. Each rep has an annual quota of $1.2M, a 6-month sell cycle, and an average of $100K per sale. Each rep must find a minimum of 3 new opportunities, i.e. A - Active, per month. Specific selling activities have been shown to move prospects through the pipeline; once these activities are completed, the prospect is assigned a classification. A 'G' represents a prospect that has shared a goal with the seller. At level 'C', a lower level buyer has formulated a solution with the seller and granted access to key players. At level 'E', a buyer with the power to authorize an expenditure has verified the goal and solution, and has agreed to evaluate further. At level 'P', which we try to avoid, the seller submits a proprosal to the buyer but does not gain commitment. At level 'V', the buyer verbally agrees to sign the contract. Historical data has also been analyzed, and there is a 50% probability that an opportunity will close once it reaches the 'E' level.

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