Top salespeople have a reputation for being adrenaline junkies. After all, what is more high stakes than a 10-minute sales call that could land a million dollar, multi-year deal?
But the reality is that those calls are few and far between, and it takes a lot of work behind the scenes to set them up. It's the unglamorous time spent nurturing your leads, analyzing pipeline reports, and optimizing your sales funnel that sets a team up for those big wins.
Measurement and success go hand in hand. As the famous management consultant Peter Drucker said, “You can't manage what you can't measure.”
This is where a pipeline report comes in. The following pipeline reports will help you gain insights into your current performance. Use them to move deals through the funnel quicker and drive more revenue.
Number of opportunities
How many deals are in your pipeline across all stages? This pipeline report includes details like new deals, contracts sent, and deals closed.
By measuring the number of opportunities and their fluctuations over time, you get a sense of the health of your pipeline. The goal is to increase total opportunities month over month and to proactively head off challenges as they arise.
- Potential pain point: Your pipeline is shrinking, and you don't think you have enough incoming deals to meet quota.
- Solution: Take charge of your pipeline by nurturing the leads that are already in your funnel. Nurtured leads close at a 20% higher rate than non-nurtured leads. Create an outreach cadence so that you are consistently touching base with your leads and making them feel valued.
How valuable is your current pipeline? You find out by measuring the sum total dollar amount of all your deals, as well as the average deal size. The latter is a measure of the number deals in your pipeline, divided by the dollar amount each of those deals is worth.
It's fine if you have to estimate some of the deal values for individual deals because that will help with strategy and forecasting.
Understanding deal size can also help sales leaders spot problems. For instance, if a rep consistently adds deals that are valued at one-quarter of the average deal size, that may mean he or she will waste time chasing prospects who won't be adding much to the bottom line.
- Potential pain point: There are not enough high-value deals in your pipeline.
- Solution: Align sales and marketing so that you are targeting the right audience segments when buying ads and distributing content. You might not be getting your message in front of your most lucrative prospects.
What's the percentage of the deals in your pipeline that turn into customers over a given period? Calculate this by taking the total number deals won and dividing it by the total number of deals created.
A good win rate (also called a close rate) varies by organization and depends on factors such as product, length of the sales cycle, and pricing.
- Potential pain point: Your win rate dropped from one month to the next.
- Solution: Your reps could be wasting too much time pursuing poorly qualified leads. Invest more in qualifying, even if it requires more time up front. Doing so could lead to fewer total deals in the pipeline, but the quality will be higher.
Average sales cycle
How long does it take the average deal to close? Typically the cycle starts when a deal is created in your CRM and ends when the deal closes. Understanding the sales cycle provides opportunities to fine-tune your overall strategy.
Imagine you discover that, over a certain period, your sales cycle sped up by two weeks. You can dive into the numbers, figure out what was responsible for the improvement, and implement the learnings team-wide.
- Potential pain point: Several reps on the team have longer-than-average sales cycles.
- Solution: Teach your reps how to align with buyer objectives, add value during every prospect interaction, create a sense of urgency, and overcome objections. A sales coaching program could be in order.
How fast is your company making money? Based on the speed with which deals close and the percentage at which they close, a sales velocity report provides a snapshot of sales team health based on data from the above four metrics.
To calculate sales velocity, multiply together the number of opportunities, average deal size, and win rate for a given period. Then divide that number by your average sales cycle during that period.
Analyzing your overall pipeline development can help you figure out areas to optimize.
- Potential pain point: Low sales velocity.
- Solution: Home in on which of the four contributing factors is weakest and then adjust accordingly. For instance, the team might be closing 10 low-value deals for every high-value deal. Test to see whether sales velocity improves by directing more resources toward higher-dollar-value accounts, and iterate your strategy based on the results.
This is a measure of every action taken by a sales rep, including calls made, emails sent, and deals created. The goal is to have high activity across the board.
- Potential pain point: Reps send tons of emails but make few phone calls.
- Solution: Maybe some of your reps believe that cold calling is dead (not true), or maybe they have phone anxiety. There are resources to help them through both issues, and there are tools to help managers review reps' phone-call performance.
Deals lost (and reason why)
How many deals have been lost? It is painful to lose out on a deal, but it's also a great learning opportunity. Track every deal you lose, and dig into the reasons it didn't close so that you can course correct.
- Potential pain point: You discover that you're losing out on deals over perceived value for the price you charge.
- Solution: Try to get creative in the ways you show value. For instance, you can raise your prices while simultaneously instructing your reps that they can always discount at least 20% when going for the close so the customer thinks they are getting a great deal. You can also introduce interactive pricing tables so that prospects have the flexibility to figure out a price that works best for them.
Make time for review
Inexperienced sales leaders make the mistake of collecting a lot of data but not setting aside the time to analyze the results and go over their findings.
It can be helpful to set up weekly, monthly, and quarterly check-ins; they help with accountability. Tell your reps the criteria they are being judged on, then use the check-ins to celebrate their wins and provide support in areas they are struggling.
A robust CRM is key to making reviews an efficient and helpful part of a sales process because it provides a bird's-eye view of all the important metrics.
Leverage the pipeline report
If you set out to climb Mount Everest, you can't just envision the thrill of summiting. That can be your motivation, but you also have to prepare your gear, make a plan, and hire help. Similarly, the adrenaline rush of the big sale is real, but you can't get there without methodically laying the groundwork.
A pipeline report is essential to understanding and making the right improvements to your pipeline. Use these pipeline reports to create an efficient, repeatable, and customized process that will help you win more deals.