A key metric which successful sales managers watch is “pipeline velocity”. This is an important element in establishing an overarching sales plan for meeting your company’s goals.
Pipeline movement (velocity) is critical to the health of a sales organization. When deals get stuck in the pipeline, revenue is delayed, close rates decrease and quotas are missed.
One of the biggest factors contributing to poor pipeline movement is lack of visibility. Too often, many companies have little to no pipeline reporting. They have no idea what stage deals are in, how long they have been there, when they are supposed to close, the average length of time it takes for deals to close, what their win loss rate is or what their win loss percentage is.
Flying blind isn’t the way to move deals forward. When you can’t see what’s happening you’re powerless to affect change. In today’s world of cloud computing there is absolutely no excuse for not having a decent CRM with even basic simple, yet clear reporting tools.
There is an endless number of sales KPIs or metrics which can be followed. To ensure the pipeline keeps moving and deals don’t get stuck there a few must haves;
- Deal age (days in pipeline)
- Stage age (days in stage)
- Average deal cycle times (the length of time it takes from contact to close)
- Win/Loss Ratio
- Deal close dates by month and quarter
- Deal close dates by stage
- Pipeline revenue by stage, by quarter, by month
Without these specific metrics a sales team is flying blind and therefore almost completely incapable of creating any pipeline velocity.
A good dashboard and reporting are at the core of pipeline velocity. Visibility is critical. Know where your deals are. Know how long they’ve been there. Know how long it takes your average deal to get across the finish line. Know where in the sales cycle deals fall out the most. The more you can learn from your analytical data the healthier your pipeline will be. Healthy pipelines move much faster and are rarely clogged.
I would be interested in hearing how others have measured their pipeline movement, and as always I welcome and invite comments.
