Sales Pipeline Management 101 and How CRM Can Help

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Recently I was at a two-day conference talking about the slowing economy, business opportunities and the like. It was basically 16 hours of presentations with people offering a few insightful tips and advertising their services.

One of the great takeaways I got was the ‘pipeline formula’ from Simon Harris of ActionCOACH. I’m sure I’d seen it before, and it is in various places on the internet, but it is nonetheless a great little tool:
Number of Leads
*
Conversion Rate
=
Number of Customers
*
Number of Transactions
*
Average Sale Value
=
Revenues
*
Margin
=
Profit

Most people are obsessed with the bold factors (Customer numbers, Revenues and Profit) and often people implement CRM systems thinking they will build it and one of these will come. Here is the secret; you can do nothing about the bold factors but you can do lots about the rest. Moreover, CRM systems help you track and measure all the non-bold factors. This is how Microsoft Dynamics CRM does it…
Number of Leads
Dynamics CRM has a lead record out of the box. Here you can upload all your generated leads or enter them on the fly
Conversion Rate
At the press of a button, a user can convert a lead to a sales opportunity, contact and company. Also as every record has a status associated to it in Dynamics CRM, tracking conversion rates is simply a case of counting those with a successful status against those with an unsuccessful one.
Number of Transactions
Dynamics CRM tracks your sales opportunities until they close. Looking at won sales opportunities, over a given period, we see how many sales have been made.
Average Sale Value
The value of a given sales opportunity in Dynamics CRM is either entered manually by the user or uses the products and services, also stored in Dynamics CRM, to determine the value. Therefore tracking the average sale value over a period is simply a case of averaging the value of all the closed and won opportunities over that period.
Margin
For a given product record, Dynamics CRM allows a user to store the cost of the product or service as well as the sales price. Therefore it is easy to work out the margin of a product or, for an opportunity with products attached, the margin on the opportunity.
So there you have it. If you want to improve your pipeline, consider the ‘pipeline formula’. If you want to track how well you’re doing, get a CRM system like Dynamics CRM.
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2 thoughts on “Sales Pipeline Management 101 and How CRM Can Help

  1. Hello,

    What have you found to be the best way to track whether or not an account has been touched? We have 2000 accounts and 6000 contacts, and I want to see who has touched what over the last year. We have a seperate PEachtree system for accounting that is not tied to CRM 3.0, so I want to see if it is better to view the data in CRM.

    Thanks,
    Jack

    Like

  2. Hi Jack,

    You have a few options. The first is the neglected accounts report which talks about the last time an account was contacted.

    Another option includes setting up a last contacted field on the account and triggering a workflow off activity actions to populate it. You could also do it with jscript if you prefer.

    You could also create a report (either through adjusting a dynamic excel query or through SRS) which queries the filtered views to find the records of interest.

    Like

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