Sales Pipeline Analysis Process, Strategies and Tactics

The sales pipeline is a complex process which is of high value to the organization because the way you manage your sales pipeline will drive the overall sales performance of your company.

The sales analysis can include various approaches. For example, you can analyze the overall team performance as well as individual performance. In addition you can analyze the performance at each step in your sales process. For instance, each stage in your sales pipeline has KPIs such as closing ratio, lead generation, number of calls made, number of sales presentations given to prospects, etc.

It is important to set up the goals of your analysis based on the strategy and major objectives and targets. Should you focus more on team performance or should you focus on individual performance. For example it is a strategic decision how you are going to deal with top performers and bottom performance.

Are you going to use different targets based on their historical performance or are you going to focus on coaching, mentoring and helping the bottom performers. Even more important is the question “should we focus on setting individual sales targets or team targets?”.

There is no right or wrong approaches and answers to these questions – it all depends on what you are trying to achieve and why do you need your analysis.

Today there is no lack of tools, software and applications for managing sales pipelines and performing various pipeline analysis. The information is available and you can create your own sales pipeline reports however the effectiveness of your analysis will depend on your overall organizational strategy and your sales objectives and targets.

The two important sales pipeline analysis questions:

1. What needs to be analyzed on an ongoing basis by developing continuous and reliable sales pipeline reporting system
2. What do we do with the results of our analysis

While the first question is clear and straightforward for sales managers, the second question is crucial for the success of your sales performance analysis.

First, the results will depend on and as a result will be different based on your KPIs and metrics used in your reporting. Different KPIs will lead to different conclusions and knowledge for the management.

Second, you need to make sure your sales pipeline KPIs are actionable which means the result and performance of each of your sales KPIs has to lead to an useful and actionable information which triggers certain courses of action.

Having said that for effective analysis you should follow the following process:

1. Define your overall organizational strategy and your sales objectives. Be as specific as possible and convert your strategy into measurable and quantifiable targets.
2. For each target develop at least 3 sales KPIs – actionable well defined key performance indicators.
3. For each KPI assign the required metrics you will need to monitor in order to be able to measure and calculate your KPIs. Depending on the complexity of your sales pipeline process you might need 2-3 metrics per KPI or in some cases you might need more.
4. Based on your defined strategy, objectives, targets, KPIs and metrics in the first 3 steps you can now define and develop your sales pipeline reports. Effective sales reporting system like sales dashboard or executive style sales reports would help you perform more efficient and effective analysis and will save you a lot of time on continuous basis. This step should be planned carefully.
5. Develop continuous plan for your reporting and analysis. Define the frequency of reporting, types of reports and review meetings and feedback mechanisms for management and your team members.

Here are some examples of KPIs and approaches you should consider for your analysis and reporting:

• Monitoring individual performance and overall team performance at each stage in your pipeline
• Analyzing and tracking lead generation
• Monitoring closing ratio at individual and team level
• Analyzing the size of your pipeline
• Tracking important signals and KPIs which identify critical issues on time (for example tracking each individual deal progression will trigger signals and identify critical issues on time)
• Pipeline leakage – continuously monitoring all opportunities in your sales process will identify lost opportunities immediately and will give you opportunity to develop tactics and strategies to save those opportunities and convert them into successful opportunities
• The time of opportunity development and the progression process varies for different opportunities however you should identify slow developments and do something about them

In addition there are typical sales metrics that you should monitor such as closing ratio, number of calls, number of leads, number of closed deals, number of lost opportunities, number of presentations given, the status of each opportunity in your direct mail and email campaigns, etc.

Sales pipeline management and consequently the analysis is both an art and a science. The science part includes the process of reporting and analysis and you can do this by using tools and applications for sales analysis and reporting.

However the art part will make all the difference – the planning process, your strategy and the quality of your pipeline. For example the quality of your leads and prospects at any time should be analyzed because looking at the numbers alone can be misleading.