Pipeliner CRM uses visualization to reflect your organization’s sales process, making it far more possible to manage and control sales. In this scenario, sales velocity is, of course, a major part of the pipeline management.
What exactly is meant by “sales velocity”? Knowing how fast (or slowly) an opportunity moves through the sales stages tells you the velocity of the sale. Has the opportunity been in the pipeline for 6 months? 3 months? How does that length of time compare to your team’s averages over time? The answer depends on your product or service, the complexity of the sale, and other factors. But you can always see by the numbers whether a deal is moving at the “right” pace.
Keeping track of this overview is important because it will help you understand what to expect from your pipeline and make it possible to more accurately forecast — and reduce risk.
But given that Pipeliner mirrors your sales pipeline, how will you know if sales are being made in a timely manner, as compared to earlier sales? How can you analyze the speed at which one rep is selling as compared to others or the norm? How can you isolate sales process steps at which sales commonly hang up?
Sales Velocity, Opportunity Age, and Accurate Forecasting
Many companies forecast sales by calculating a closing ratio for each sales rep. Then they average these to discover the average closing ratio for a sales team. Closing ratios are also calculated on different products and services. With this information, sales management has a degree of prediction on achieving sales targets, based on the number of leads and in-progress sales in the pipeline.
But a further analysis point—that of opportunity age—can be of critical value. This would be an analysis of opportunities in the sales pipeline by how long each has been there. This could be compared with the length of time experienced sales reps have taken to move similar opportunities through the pipeline to closes in earlier periods. This addresses an important issue; sales managers have long observed — the longer a sale remains in the pipeline, the less likely it is to close.
Operating without this analysis point is a bit like flying blind. You can gauge how many of your current leads will probably close—but when? The time factor is traditionally provided by individual sales reps based on instinct and estimation, but a much more accurate approach is through the analysis of the actual data. When sales are taking too long and this information can quickly be assessed, timely remedial actions can be taken. At Pipeliner, we call this “the end of fortune-telling.”
Analyze Sales Stages to Increase Sales Velocity
Bringing the focus even further in, take a look at the length of time each opportunity has taken at each stage of the sales process. As with the overall view, the track records of your experienced and proven sales reps can be compared with new reps, with respect to each pipeline step.
This kind of analysis can spotlight a number of different issues and opens the door to addressing them. For example:
- It could indicate that one particular sale is stuck. Could there be a unique problem? Now you can intervene.
- It can spotlight an individual rep having problems getting sales through a specific stage. Now you can coach and train.
- If numerous sales from different reps seem to hang up at one point, it may mean that for whatever reason the actions taken at that particular step might not be as effective as they could be and require change or alteration. Now you can change the sales stages to tailor them to this commonality.
- Or it could be a signal that help from marketing is needed in the form of collateral materials, to move sales more rapidly through that step. Now you can bring in Marketing and/or ask for assets.
Conversely, when sales are seen to move through particular steps more rapidly than in the past, the actions that caused the more rapid movement can be isolated and imported to the remainder of the sales force.
Alerts and Management Reports Spur Sales Velocity
Alerts and management reports can expedite, fix, and/or strengthen the sales process more rapidly and with higher precision. Set alerts for sales as they enter the pipeline, so that if a particular sale remains at a step past its expected time the sales manager is notified. Include opportunity age analysis in management reports and sales forecasts so that they present a complete and more confident picture of the future.
Monitoring sales velocity pays off in increasing your chances of boosting sales velocity — brace yourself!
More pipeline management posts:
- Four Steps to Improve Your Sales Performance Management
- Progressive Pipeline Management: Learning and Adjusting As You Go
- 3 Unique Ways to Motivate Your Sales Team