4 easy ways to effectively analyze your sales pipeline
- 1. Figure out your deal stages
- 2. Measure the health of each stage and prioritize opportunities
- 3. Analyze your successes — and failures
- 4. Review
A small mom-and-pop shop may know all of their customers by name and be able to track sales by hand, but most brands quickly outgrow pen and paper. After all, the number of potential deals grows alongside your sales team, and it can quickly become unmanageable. That’s when customers and prospects start to fall through the cracks, resulting in lost sales — a company’s worst nightmare!
Power your sales pipeline with Jotform’s free online lead gen forms, feedback forms, form analytics, and more!
Enter your sales pipeline. This powerful visual tool depicts where your clients and prospects are in the sales process. It helps a sales team better understand how their deals are progressing and what they need to do to ensure leads progress. It can also reveal where deals might be stalling, so sales reps can intervene before opportunities disappear forever.
Those insights come from sales pipeline analysis, which is the process of looking at each deal stage to determine why some deals close and others do not — and what you can do about the latter.
Here’s a closer look at how the process works.
At a high level, deal stages include prospects, quotes, and clients won or lost, along with estimates of the likelihood a particular deal will eventually close.
If the sales process in your industry requires specific steps — such as a B2B brand whose clients require corporate approval before signing deals — you’ll want to include those nuances in your particular sales pipeline, so it reflects the experience of both sales reps and potential customers.
Once you’ve identified your deal stages, you can tap into sales pipeline metrics to determine the health of each stage and the likelihood existing deals will eventually close. This way, your sales reps can prioritize opportunities accordingly. Examine the list of sales pipeline metrics below to consider in your analysis. Keep in mind that metrics vary by business and goal, so you might want to analyze additional information that’s unique to your mission.
- Ratio of leads to qualified leads, which compares how many leads become qualified leads or prospects, which are far more likely to convert
- Win rate, which calculates the number of prospects who become customers
- Conversion rate by stage, which assesses lost deals at each point in the pipeline, so you can figure out why prospects are not converting and address the problem(s)
- Churn rate, which measures how many customers do not return after making a purchase
- Average sales cycle, which measures how long it takes customers to convert and can help determine where deals are at risk of not moving forward
Consider deals that move from one stage to another as mini conversions, measuring the conversion rate at each of those steps. From there, you might notice a particular stage needs a bit more attention than others because there’s more of a drop-off. That sends a clear signal you need to spend more time nurturing your prospects at that particular stage.
Another good tactic is to focus on recent conversions and why they were successful. Track their path to purchase and meet with the sales reps involved to talk about their experience and the takeaways that might benefit the broader sales team.
Do the same with deals that don’t close. Look into the experience of those prospects before they walked away and talk to your sales reps to figure out what went wrong and how you can avoid those scenarios in the future.
Finally, it’s time to sit down with your sales team to digest the results of your sales pipeline analysis. This is an opportunity for your sales reps to communicate where they are in the sales process with clients, as well as for brand leaders to let the organization know what they’ve uncovered about the existing sales pipeline. This way, you can ensure your entire sales team is on the same page, focusing the right amount of effort on each opportunity.
Sales pipeline analysis 101
Even the most seasoned sales reps — who rarely lose deals — can benefit from sales pipeline analysis. It’s essentially a bird’s-eye view of a brand’s existing opportunities. From there, top salespeople and novices alike can determine where they need to focus their efforts to win the most sales and drive the business forward.
Office photo created by standret – www.freepik.com