What is a pipeline report?
A sales pipeline can be defined as a systematic approach to sales. In this, you have a sales funnel, which is segmented into different sales stages. The four key constituents of a sales pipeline can be laid down as:
- The number of deals that you have in your pipeline.
- The average size of the deals and their value in your pipeline.
- Close-ratio, the average percentage of deals won
- Sales velocity, the average time it takes to win a deal
A sales pipeline can also be termed as a visual snapshot of where prospects are in the sales process. Through sales pipelines, we also know about all the deals that salespeople are expected to close in a particular week, month or year and how close a rep is to reaching their sales quota.
Suppose your pipeline is worth $10,000 in contract value and your conversion rate, from lead to a sale, is 10%, then you can expect to close $1,000 worth of new business.
Thus, in case your sales target is $2,000, then you will need to convert twice as many leads.
Here is where pipeline analysis comes to play. Therefore, if you can distinguish improvements within your pipeline that will help you move more prospects from one stage to another, then you can be more successful in your job.
And if you are wondering what is the biggest incentive for improving your pipeline, then it shall be revenue growth!
The difference in difference in revenue growth between companies that defined a formal sales process and companies that didn’t is 18%. This recent report is due to the latest study conducted by the Harvard Business Review.
Furthermore, companies that mastered three specific pipeline practices experienced 28% higher revenue growth!
For B2B sales, having a healthy sales pipeline helps to bring about:
- An improvement in the sales process.
- Forecasting future business results.
- An analysis of different sales strategies for your business,
- It also helps to manage and allocate resources, which would further help in closing or service upcoming sales,
- Helps in reviewing the overall progress for the current financial year, and
- Lastly, it helps in knowing how far someone is from his/her targets.
Therefore, it is important to note that a sales pipeline plays an important role in closing more sales deals as well as indicating the overall health and future direction of your company.
How to use the pipeline report?
If you are wondering about how to use the pipeline report? Then, let’s assume that we are in the middle of September right now and our average sales cycle is for three months or close to it.
We can see that in September, our current month, there’s $50,000 of Opportunities that should be closed. This value again splits by the various Opportunity Stages. You can hover over each stage for any further details in Salesforce.
Now, if you are a sales manager looking at your projected revenue for September, and you want to know how robust is the September pipeline? Then, you first need to export the report so that you can see names and the owners of the individual opportunities. Furthermore, you need to click here Edit on the report and then check the Detail Rows option.
Now, expand the report again to verify the names and owners of individual opportunities. Then, think about the deals in each stage.
For instance, all those deals that are in Prospecting:
Now, if the average sales cycle is calculated to be up to three months, then you need to be confident that you will close all of them in this month.
Also, keep in mind to ask yourself if you are comfortable with some of these opportunities at a more advanced stage? Should the close dates be moved to a later month? Have the close dates on some of these opportunities already shifted from one month to another?
Here, it is important that if the answer to one or more of these questions is yes, then you are not having a robust pipeline and neither an accurate forecast for the current month.