If you're in the business of sales, then it's your job to develop and nurture a strong pipeline. But what is a pipeline? And how can you build one that will keep prospects interested and qualified until they become customers? Read on for all the answers!
Looking for the best metrics to monitor the health of your sales through the sales pipeline report? Sales development reps are often overwhelmed with how to effectively track their activity. It seems that every week there is a new app, tool, or piece of technology that our team needs to tracklist view, etc.). This may sound overwhelming but you're not alone!
The truth is, keeping on top of all these tools can be challenging. It's easy to feel like you have more data than you need and at times it can even be difficult to actually find relevant data if everything has been logged incorrectly. You need to keep a keen track of sales pipeline metrics.
So what are some important things you should pay attention to when tracking your well-developed sales pipeline report! Let’s know!
The number of opportunities in your pipeline provides a key insight into your pipeline health. Opportunities are a combination of revenue and the probability that a sale will close. Therefore if you have a large number of opportunities it is likely that your sales team has a strong pipeline.
Your average group size or deal size is essentially your total forecasted revenue divided by the total number of deals in your pipeline. If your average group size is decreasing, this means you're losing more deals than gaining them; which can lead to bigger issues such as missed forecasts and salary cuts (if based on those projections).
The new vs. total deal ratio is another helpful way of looking at your sales pipeline report on how many deals are from "new" (i.e. opportunities that are currently at the top of your funnel). If you have a high amount of new deals, it means your sales team is consistently booking new business which means there's likely to be momentum in your pipeline.
However, if not enough opportunities are "moving through" or progressing in the pipeline then this could indicate that there's an issue with the number of available leads or marketing effectiveness.
Your win rate is simply the percent of total opportunities won out of all opportunities closed during a specified time period (i.e. year, quarter, or month). Not only does this help provide valuable insight into how successful your reps are closing deals but it also provides valuable insight into your sales pipeline metrics & whether reps are closing enough for your company to hit its revenue goals.
This metric basically asks the question: What percentage of closed opportunities returned a sale vs. those that did not? If this number is greater than 50%, it means your sales team is closing enough opportunities for your revenue objectives to be met.
Your pipeline coverage ratio shows you how many deals in your pipeline are expected to close within a set period of time, typically between one month and two weeks from the day you're viewing the data. The numbers here should help provide insight into whether or not your sales team has sufficient lead velocity to meet their quota for the month.
The time-in metric is an ideal way to see how many opportunities are waiting to be contacted by your sales team. This presents an excellent opportunity for improvement because you can easily see which leads have been sitting in the queue for a long time. Eventually removing them from the lead list after getting insightful information from your sales pipeline report.
The average lead conversion metric helps show you how many leads become opportunities on a monthly basis so that your team knows if they are targeting enough quality leads or if they need to increase their marketing efforts. You can get to know about it through sales pipeline metrics.
Your pipeline turn rate is simply: (Closed Won)/(Pipeline At Month). For example, let's say there were 200 deals in your pipeline at the beginning of the month and 78 total closed wins; your pipeline turn rate would be (78 closed wins)/(200 total deals in the pipeline at the beginning of the month) or 39%. If this number is below 30%, your team should consider more effective outreach efforts to convert leads.
A qualified lead conversion rate shows you how many times a "qualified" (i.e. sales-ready) lead converts into an opportunity within a set amount of time, typically one day or one week. Therefore if there aren't enough opportunities being generated then it may be because there's no demand for your offering and needs to be updated accordingly.
Sales metrics are the numbers that show your company's productivity, efficiency, and growth. They can be found across all aspects of your business, including sales, marketing, accounting, finance, HR, pretty much anywhere you look for them.
Activity metrics show how your company is working and improving. They usually represent actions taken by a certain percentage of the team, so they're great for tracking progress made over time and find areas where improvement can be made. Some examples:
Pipeline sales metrics are the numbers that show where your business is right now, so they're great for looking at current figures and projecting future figures based on what you see. Some examples:
Outreach metrics are the numbers that show how successful your company is at generating leads and reaching out to prospective customers. They usually represent one team's success versus another team's, so they're great for seeing where you stack up against the competition or other teams within your own organization. Some examples:
They are the numbers that show what's going on with your sales, whether you're looking at short-term or long-term performance. They are usually used by leadership and the C-suite to understand how their teams are performing. Some other groups that track sales KPIs regularly include marketing managers who want to see if their marketing is driving increased website traffic and lead generation, finance departments so they can forecast future revenue based on projected sales volume and sales managers who want to track overall sales performance across their teams in order to find out where they can improve.
Let us go through some of the key performance indicators (KPIs) that you will need to know about in order to understand your business's performance in the current sales cycle. I've also included tips for tracking each one of these KPIs - whether it's with Salesforce or some other tool or system. So make sure to read until the end!
Note:
Keep in mind when looking at these KPIs that depending on your company's industry, some might be more important than others (e.g., Gross Margin Percentage may play a large role in SaaS companies but have little importance in retail sales). Percent increase/decrease in total sales revenue from last year.
This is a straightforward but important metric that shows how your company's overall top-line performance is trending. Is the business growing? Stagnating? Declining? You can use this number to see what effect, if any, recent changes have had on your company. For example, implementing new pricing might drive down your revenue until you find the sweet spot between maximizing revenue and not turning away potential customers by being too expensive. If so, this metric would be an indicator of the success of those changes.
Look at all of your monthly reports/statistics for the past several years (or however long you have been in business). Calculate the percentage increase or decrease in revenue from one year to the next, and then compare it to the previous year. Alternatively, you can measure this KPI against a target number rather than using prior-year performance as your benchmark.
How much you're selling products for compared to how much it costs you to make them!
This metric is essential when determining whether your company's pricing strategy is profitable. If a business has a low gross margin percentage - that is, they spend more money making their product or service than they charge their customers for it - then they need to find ways to reduce costs within the production process without compromising quality. If they don't, their business can't stay afloat. Even if customers are willing to pay a high price for your product or service, you might not be able to profitably provide it at that cost.
You can access this number by looking at your financial statements pulled from various sources - including Quickbooks Enterprise, FreshBooks, Xero, and others - as well as your company's monthly reports. However, some companies outsource their administrative functions so they may have to find the number elsewhere. Percent increase/decrease in the total number of customers (net new customers) over the past month, quarter, or year (depending on your time frame).
The more new customers you acquire, the more revenue you'll generate month-over-month. If this number is trending up over time, then your company's marketing campaigns (if it uses them) are successful in attracting new leads and closing sales. Or maybe it means that they're not working - if the number of customers is shrinking each quarter or year, something needs to change.
This is a very straightforward metric to retrieve; almost every reporting tool on the market will give you access to these figures by default without any effort on your part. Percent increase/decrease in the total number of key customers (the people who buy most frequently) over the past month, quarter, or year (depending on your time frame)
The more loyal and well-engaged your best customers are, the better equipped your company will be to weather the ebb and flow of the market. Look at your reports that show customer engagement levels, which you can usually pull from Salesforce, Zendesk, or Desk.com. Check any other reporting tool or data source you use for this information. Percent increase/decrease in the total number of key products sold over the past month, quarter, or year (depending on your time frame)
Instead of measuring customer loyalty and frequency, it focuses on product sales. If a company sells several different kinds of products, this metric can help indicate which items are performing well compared to others. For example, if Product A outsells Product B by 2:1 every week for two months straight, then that's an indication that Product A needs more focus during marketing campaigns.
Service-based companies can use this data to uncover needs (or opportunities) within specific customer accounts; they should be able to find this number in their reports or reporting tool. Percent increase/decrease in the average purchase value of key customers over the past month, quarter, or year (depending on your time frame).
This KPI shows how much money each of your best customers spends per transaction - which can help identify specific areas to focus on selling more high-ticket items. For example, if this number increases by 20%, then it's likely that individual customer accounts are buying larger amounts more frequently than they did before.
The sales pipeline report gives you a roadmap for your product’s success. It outlines the steps you need to take in order to achieve this goal, and it can be used by any type of business owner- whether they are selling products or services. What types of steps do you want to include? Which ones would benefit your company most? Figure these out now so that when opportunities arise, later on, you will have an easier time deciding how best to tackle them!
