CIO — The Opportunities object (OK, table) is where CRM and SFA systems hold the data about prospective deals. And nearly every system uses some sort of stage pick-list that's an indicator of the deal's current status in the sales cycle. Each stage typically has a percentage assigned to it, and a forecast category (such as "pipeline" or "upside") that is used to drive the opportunity pipeline report and bookings forecast. Simple. Rational. Wrong.

Let's see why:

• All too often, the sales cycle stages in the system have no consistent definition — particularly in large, multi-divisional sales organizations. There aren't clear, enforced entry and exit criteria...and there's typically no penalty for miscategorizing a deal. When a sales rep needs to up his forecast, he summarily changes the stage even if there's been no change in the deal.

Fix #1: Sales management develops and publishes the definition of deal stages, including entry and exit criteria. In the process, they may also want to consolidate or change some of the stages.
Fix #2: IT creates reports that flag fishy stage changes, such as skipped stages, stages going backwards, or stages moving even though there's no other data change to the record or associated task/call notes.
Fix #3: Sales management develops sanctions for reps who capriciously change deal stages.

• Sales reps have reasons to keep deals hidden until they're nearly closed. Because of compensation plans and psychological incentives, it's all too common to have "submarine deals" that are out there somewhere...but are not reflected in the CRM system.

Fix #1: Sales management changes the incentives so that deals that are invisible (not going through all the stages) are penalized. If the penalties include lower priority for needed resources or a lower commission, the reps will get the message quickly.
Fix #2: IT creates reports that highlight "miracle deals" that run through three or four stages in a week, or skip stages altogether.
Caveat #1: watch out for the incentive this creates (read on...)

• Sales reps have reasons to put in several bogus deals at early stages of development. To look busy or inflate their pipeline, reps may put in Opportunities with fictional amounts and percentages. This fake pipeline messes up lots of metrics, and can lead to dangerous misjudgments about the strength of the business.

Fix #1: As discussed above, Sales management sets clear guidelines about the entry and exit criteria for Opportunity stages.
Fix #2: IT creates reports that highlight "dark matter" deals...big chunks of pipeline that seem to be lost in space (with no updates, no apparent actions taken)
Fix #3: Sales management works to identify the bogus pipeline and has the Opportunities removed (or at least set to $0 value)

• The sales cycle stages represent the sales reps' "steps in running the drill" — it's an indicator of your team's effort or progress. That's fine, but may be only loosely related to the customer's decision cycle or willingness to purchase. When your reps are focused on "prove ROI," the customer may be trying to "make the business case" or "secure the budget." The customer's purchasing process runs asynchronous to your selling process, and a deal where we've "done everything" still may have only a 50% chance of closing.

Fix #1: Sales management develops criteria (or even customer surveys) that provide indications of the customer's state of play.

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