Pipeline Management & Sales Projection
I have seen a rise in requests to manage sales pipelines of late. What is this all about? Well, it is monitoring how many leads are successful, how long a sale takes, how much an average sale is worth, and then predicting how your current leads will pan out. There are so many aspects that you can monitor here, and each one creates an opportunity for a wealth of valuable information.
1. Sales Type
2. Sales Value
3. Probability of Sale
4. Time from Lead to Sale
5. Sales Person
6. Process Stage
These may seem confusing, but they all play a part in your pipeline and need to be considered when predicting sales. You can also read my post about why you should analyse your sales, if you’d like to know more about what your sales can tell you. Here is a little information on each of the points, why they are important, and how they can help you to predict your sales.
Sales Type – Breaking your sales into types can really help you to see where you’re having more success. It can also help you to know which types of jobs are more abundant, and which ones you should be focusing on. It may also help you to get rid of some dead wood, if need be.
Sales Value – This one is straight forward – it may be better to have 3 large sales, rather than 30 small ones, if the total value of the large sales is greater. Also, combining the sales figures with all of the other points can produce some very interesting information about what is going on with your sales.
Probability of Sales – This could either be a computer predicted value (if you win 50% of your quotes, then you have a 50% chance of winning this one), or you could even assign a chance possibility to each lead (likely, neutral, unlikely). Adding this into the mix really helps to predict what the probable outcome is. If you only secure half of the jobs you tender on, it would be short sighted to think that you will now, all of a sudden, get all of your tenders coming in.
Time from Lead to Sale – This is very important, because this process often takes time. You may have a hot lead now, but when will that sale actually come in? Also, what are your invoice terms? If you’re looking to do a cash flow forecast, that also needs to be taken into account. If you’ve been in business for any length at all, you’ll know that just because you’re busy, doesn’t mean that there is money in the bank. Cash flow can be a killer, so you need to get on top of this.
Sales Person – If you have various sales people, you need to add this into the mix. Are certain sales people pushing certain products? Are some converting more leads than others? Are some more optimistic with their projections? All of these aspects need to be considered, as sales people are in fact human (although you may question that from time to time). Understanding where they may need attention, or where they can be learned from, is key.
Process Stage – It is useful to monitor the current stage of each process. Where, along the road, is each lead. Why do you need to know this? It helps you to monitor them, and also to forecast. I spoke about the time from lead to sale, but if that can be broken down further into each stage, it can be so much more accurate. Also, you can then see if there are any stages of the process which may be more likely to kill off leads. That can be useful to know when you are looking at your processes. It is also helpful as a reminder to staff to keep the process moving, and to draw your attention to any stale leads before it is too late.
How do spreadsheets help with this process?
I create many spreadsheets to track all sorts of things, and this type of request is become more and more popular. By inputting the data shown above, as you or your team progress, some very valuable reports can be automated. I create custom solutions which use the data you have entered to not only analyse that data entered, but then predict what the likely outcome is for your active leads. We realise that anything can happen, so this is not an exact science, but there is a certain amount of predictability where sales are concerned. Also, if the actual sales do not go as planned, that is another question you could be asking. Why did that happen? All of this can help you to make the right decisions, and a good spreadsheet can use this data to show you what you want and need to know.
Do you know what is going on with your sales pipeline, and can you predict future sales based on the sales you have done? If not, it may be time to get in touch. Take a look at some of our available solutions.