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Smooth Sailing or Storms Ahead ? How to use the Sales Pipeline to predict your future
| Guest post by: Karen Andrews |
Article Overview: A sales pipeline is simply a forecast that you or your salespeople prepare monthly which lists the customers that are likely to buy in a given time frame, the value of the sale and when it is likely to close. It is an essential tool for business owners and sales managers to identify where you are and where you need to be in order to meet budget.
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Free Download - Are you boring prospects with your questions? By Karen Andrews |
Smooth Sailing or Storms Ahead ? How to use the Sales Pipeline to predict your future
A sales pipeline is simply a forecast that you or your salespeople prepare monthly which lists the customers that are likely to buy in a given time frame, the value of the sale and when it is likely to close. It is an essential tool for business owners and sales managers to identify where you are and where you need to be in order to meet budget.
Even if the forecast is well below where you need it to be, at least you are aware of it and can take steps to improve it and stay on track. Don't wait until the 2nd or 3rd week of the month when you realise that sales are slow to come in and you need more because it's usually too late.
Typically, I usually ask for a forecast at the beginning of the month and then again on the 15th of the month to see how we are tracking.
The important thing to remember is to use a 'weighting'. You may $500,000 in your pipeline but it's very unlikely that you will be successful in winning 100% of them so the forecast will be inaccurate. A weighting is simply a % that you apply terms of the likelihood of winning the sale. Here is an example of how to calculate:
Monthly Target $100,000
Value of Sale Est. Close Date Probability of Success Weighted Total
Customer 1 $15,000 15-May 20% $3,000
Customer 2 $12,000 6-May 40% $4,800
Customer 3 $10,000 20-May 60% $6,000
Customer 4 $25,000 30-May 80% $20,000
Customer 5 $20,000 8-May 20% $4,000
Customer 6 $35,000 8-May 40% $14,000
Customer 7 $5,000 30-May 60% $3,000
Customer 8 $8,000 12-May 80% $6,400
Customer 9 $15,000 30-May 20% $3,000
Customer 10 $5,000 1 6-May 40% $2,000
Total $150,000 $66,200
Monthly Target $100,000
Shortfall/Excess -$33,800
Using this example, the salesperson needs to add more sales into their pipeline to ensure they reach their sales target of $100,000.
As a guide to the Probability you could use
Initial Communication - 10%
First Meeting/Presentation - 20%
Proposal Given - 60%
Negotiation/Verbal Commitment - 80%
Closed - 100%
Most CRM/Database packages (I use ACT or Salesforce.com) include Sales Pipeline management but it can be as simply as listing them on an Excel spreadsheet.
The Sales Pipeline
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Baseball's General Managers versus Business' Sales Managers
Developing a Structured Approach to Sales Pipelines - The Issues
Leadership Assessment #18 – Handle Crises Well
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Why You Should be Scared When Your Salespeople are Closing Lots of Business
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Leadership Truth #11 - Great Leaders Do Better in a Crisis
Sales Pipeline Gives Sight to Blind Executives
Stop Managing the Pipeline, and Start Managing Your Sales Team.
Go-to-Market model - the value chain
Recruiting Strong Salespeople - The Sales Candidate Pipeline
Understand Pipeline Management for Stronger Forecasts
Filling Up The Future
Prioritizing Your Week
How to fill your pipeline pre- and post-sale? Thought leadership is the answer
Good Times, Bad Times
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About the Author: Karen Andrews RSS for Karen's articles - Visit Karen's website Specialising in sales strategy, business development, sales effectiveness and sales training Karen is committed to making the changes that will inspire, motivate and help you realise your sales goals and potential. Get more free sales tips, articles and sales guides at www.shinesales.com.au Click here to visit Karen's website   The simple truth to increasing sales follow up follow up follow up Selling in the lead up to Christmas Build your Sales Pipeline and Boost Your Prospect Numbers Top 20 Interview Questions for Salespeople How to increase sales by upselling |
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Book: Why Good Girls Don't Get Ahead But Gutsy Girls Do
- Book: Why Good Girls Don't Get Ahead But Gutsy Girls Do: Nine Secrets every career woman must know
Kate White
1995
Foy years Kate White lived as a good girl - a rule follower, a people pleaser, a busy beaver - until she was passed over for the job of editor-in-chief of a magazine she had been running for months. She finally realized that being gutsy, not good, was the only way to succeed.
A gutsy girl :
1. Breaks the rules
2. Has one clear goal for the future
3. Does only what's essential
4. Doesn't worry whether people like her
5. Walks and talks like a winner
6. Asks for what she wants
7. Faces trouble head on
8. Trusts her instincts
9. Takes smart risks
This book has NO table of contents, but above are the chapter headings.
A good book, although I really wish they'd stop talking about "girls" and start talking about women.
Re: Hi! I'm an entrepreneur of 15+ yrs starting over!
- He only has one post and hasn't been back since the day he joined over a month and a half ago. I predict he'll never be back. Probably just came to link drop then realized he couldn't so he moved on.
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