Sales pipeline development

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How do you know if you've got enough Sales Pipeline to cover your Sales Targets? Learn about how to create a simple Weighted Sales Pipeline Model and answer the question for yourself. More at http://datadrivensalesmanagement.com

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Sales pipeline development

  1. 1. Sales Pipeline DevelopmentDataDrivenSalesManagement.com Copyright Swayne Hill, 2012
  2. 2. Sales-Cycle Stage Conversion 110 90% • Win Rate = the percentage of $$$ we convert to Closed/Won from each 67% Sales Stage. As the Sales 80 Stages progress, the 55% likelihood of winning 45% increases 54 • Days to Win = the average22% 28 number of days it takes to convert to Closed/Won 15 from each Sales Stage (forStage 1 Stage 2 Stage 3 Stage 4 Stage 5 those deals we win). Win Rate Days to Win Copyright Swayne Hill, 2012
  3. 3. Weighted Sales Pipeline Distribution$600,000 • Weighted Sales Pipeline = Sum(Raw Sales Pipeline * Win Rate) for each Sales Stage. $461,800$450,000 • $417,800 Example - this chart compares $350,300 the cumulative Sales Target at$300,000 each date range to the cumulative Weighted Sales Pipeline.$150,000 $135,000 • According to the data, we’re short this month, good shape $0 30-Day 60-Day 90-Day 120-Day to catch up next month but in Weighted Pipeline Sales Target trouble 3 and 4 months out. Copyright Swayne Hill, 2012
  4. 4. Sales Pipeline CoverageGood (To Sales Target) Gap $75,000 • Gap Coverage = Cumulative $50,300 Sales Target minus (-) $37,500 Cumulative Weighted Sales Pipeline for each time period. $0 -$15,000 • According to the data, we’re -$37,500 -$32,200 in good shape for the next 60 days, but there is a significant -$75,000 gap between Weighted Pipeline and our Sales Target -$112,500 in the 90 & 120-day range. • -$138,200Bad -$150,000 30-Day 60-Day 90-Day 120-Day We need to grow the sales pipeline. Gap Coverage Copyright Swayne Hill, 2012
  5. 5. Weighted Sales Pipeline Growth Trend $790,000 •$800,000 $745,000 Sales Target = 120-day sales $690,000 quotas$700,000 • 120-Day Pipeline = Total Weighted Sales Pipeline$600,000 $570,000 made up of deals with a$500,000 $461,500 Close Date in the 120-Day window.$400,000 • Trend on Weighted Sales$300,000 Jan Feb Mar Apr Pipeline growth is negative, Sales Target 120-Day Pipeline indicating an urgent need for action. Copyright Swayne Hill, 2012
  6. 6. Weighted Sales Pipeline Growth Trend •$800,000 $200,000 Current = Current Month $175,000$600,000 $140,000 • CM+1 = Next Month $300,000 $280,000 $150,000 $100,000 • CM+2 = Current Month + 2$400,000 $250,000 $100,000 • CM+3 = Current Month + 3 $230,000 $200,000 $180,000 • Drilling down on the Weighted Sales Pipeline growth, it’s clear that$200,000 CM and CM+1 remain at a pretty $150,000 $140,000 constant level but at the cost of $90,000 $110,000 diminishing long-range sales $0 pipeline growth. We’re not Jan Feb Mar Apr replacing the sales pipeline as fast Current CM+1 as we’re consuming. CM+2 CM+3 Copyright Swayne Hill, 2012
  7. 7. Weighted Sales Pipeline Source Trend •$500,000 Sales = Weighted Sales $415,000 $400,000 Pipeline sourced by the$375,000 Sales Rep (referrals, up- sell, networking, etc.) $265,000$250,000 • Marketing - Weighted Sales Pipeline pass from $140,000 Marketing to Sales Rep$125,000 $61,500 • Chart indicates source of $0 the pipeline growth issue Jan Feb Mar Apr May lies with Sales Rep Sales Marketing Copyright Swayne Hill, 2012
  8. 8. Sales Pipeline Weighting & Distribution Average Raw Weighted Win Rate Days to 30-Day 60-Day 90-Day 120-Day Pipeline Pipeline WinStage 1 22% 110 $200,000 $44,000 $44,000Stage 2 45% 80 $150,000 $67,500 $67,500 $67,500Stage 3 55% 54 $160,000 $88,000 $88,000 $88,000 $88,000Stage 4 67% 28 $190,000 $127,300 $127,300 $127,300 $127,300Stage 5 90% 15 $150,000 $135,000 $135,000 $135,000 $135,000 $135,000 $850,000 $461,800 $135,000 $350,300 $417,800 $461,800 Sales $150,000 $300,000 $450,000 $600,000 Target Coverage -$15,000 $50,300 -$32,200 -$138,200 Gap Copyright Swayne Hill, 2012
  9. 9. Sales Pipeline DevelopmentDataDrivenSalesManagement.com Copyright Swayne Hill, 2012

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