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3 Ways To Measure Performance Against Sales Targets In Salesforce

3 Ways To Measure Performance Against Sales Targets In Salesforce

Many frustrated people search in vain for the Sales Targets tab in salesforce.

Don’t waste your time.

It does not exist.

However, measuring performance against sales targets is a critical activity in running a sales team.

Isn’t it?

Fortunately, there ARE ways to measure performance against sales targets in salesforce.

Nevertheless, it goes deeper than that.

Sales managers need to know two things:

First, how does historic performance stack up against sales targets? They need to know this by company, sales team, individual rep and other dimensions.

Second, executives must understand whether there is enough pipeline. Is the funnel big enough to meet the target this month, next month or next quarter?

Without this information, you are flying blind.

That is an uncomfortable position.

That’s because it’s difficult to know which controls to adjust to be sure of hitting sales targets.

For example, if you know there is enough pipeline to meet next month’s sales target then focus the team primarily on closing existing deals.

Alternatively, if there is insufficient pipeline you have a different challenge. You must close the deals that do exist. However, the sales team must also find new opportunities simply to have a chance of hitting sales targets.

This means measuring performance against both historic and future sales targets is essential.

To do this, there are three options for tracking performance against sales targets in salesforce.

  1. Dashboard gauge.
  2. The Forecasts tab.
  3. Custom solution.

We explain how each one works, its pros and cons and when each is the best option.

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Options for measuring sales targets in salesforce

Here are the three options. Collectively, they provide salespeople and managers with different levels of information and target tracking experience.

We describe the options and give pointers to indicate the situation when each is appropriate.

Option 1 – Dashboard Gauge

Use a salesforce dashboard gauge to indicate overall achievement against sales target.

Salesforce dashboard gauge is a simple way to measure performance against sales targets.

The arrow indicator shows the current sales performance. Use the red, amber and green segments to set relevant breakpoints. For example, amber to represent 80% sales target achievement, green for 100% sales target achievement.

Feed the gauge using an underlying matrix or summary report. The report simply needs to summarize the value of deals won over the relevant time period.

Pros of the gauge approach

  • The report and gauge are simple and easy to set up.
  • The gauge is easy on the eye.
  • It’s a quick and powerful summary of sales performance against target.

Cons of the gauge approach

  • It is a blunt instrument. For example, if the gauge measures performance at the company level, there’s no visibility of individual rep or sales team performance against sales targets.
  • Manual re-calibration of breakpoint values is required for each target period. In other words, if the target next month is different to this month, the breakpoints need to be modified.
  • Pipeline deals are not shown. This means we don’t know if there’s enough funnel to meet the sales target for next month. There’s nothing to tell us, for example, if winning 30% of pipeline deals will be the sales target.

It’s the right choice if

  • You need to set something up quickly.
  • You need a Board-level chart to summarize performance.
  • You only need to measure top-level performance against sales target. Alternatively, if you are prepared to invest the time, set up similar gauges for individual salespeople and teams.
  • Sales targets are the same for each period. In other words, it is not necessary to modify breakpoints each month.

The dashboard gauge is a viable option for relatively straightforward measurement of sales targets.

It’s a simple solution.

If you need to set up a sales target reporting mechanism in the next 5 minutes then this is the option to go for.

Remember, use the gauge in conjunction with other dashboard charts and reports. This will five full visibility of sales performance and pipeline.

Option 2 – Salesforce Forecasts Tab

The Forecasts tab is a sophisticated and advanced way of tracking performance versus sales targets.

The Forecasts Tab is an advanced and sophisticated way to track performance against sales target.

You can view Closed Won opportunities that contribute to sales targets in the Forecasts tab.

Pipeline deals are also included. Categorize opportunities to indicate the chances of a successful close. This gives managers important information on the strength of the funnel and the likelihood of hitting target.

Managers can override the forecasts made by their direct reports. For example, they can adjust the overall forecast to balance excessive optimism or pessimism of salespeople.

However, there is a downside.

The Forecasts tab is complex.

It’s the most difficult functionality sales people are likely to use.

Training and coaching is needed to use the Forecasts tab successfully in tracking performance against sales targets.

Pros of the Forecasts Tab

  • Set targets at individual, team, company and product family level.
  • Track performance against sales target based on opportunity category including won, committed, pipeline and best-case deals.
  • Allow managers to override forecasts submitted by their direct reports and modify the projected performance against target for their team.
  • Review forecast history to learn from forecasts submitted in the past.
  • Drill down from the top level forecast to examine performance against sales target at individual rep and team level.

Cons of the Forecasts Tab

  • The Forecasts tab is relatively complex to set up and use.
  • It requires detailed training for sales reps and their managers.
  • Salespeople must update their individual forecasts in order for the overall forecast to have meaning. This implies a high level of commitment is required across the team to get the full benefits.

It’s the right choice if

  • You have sophisticated target measurement requirements.
  • Managers must be able to override the forecasts submitted by their salespeople.
  • The sales team is mature and already has a good level of salesforce user adoption.
  • The business is prepared to commit to appropriate training for salespeople and managers.

The salesforce Forecasts Tab provides robust target tracking and forecasting capabilities.

However, bear in mind that successful roll-out means appropriate planning and configuration effort.

Contact us if you’re interested in exploring this option, we can help!

Option 3 – GSP Target Tracker

Many of our customers use the GSP Target Tracker to measure performance against sales target.

Click play to see how the GSP Target Tracker measures sales performance against sales targets in salesforce.

As a managed package, the Target Tracker is easy to implement into any salesforce environment.

Minimal training is needed for salespeople and managers to use the Tracker compared to the Forecasts Tab. The Tracker also takes away the need to create forecasts manually.

Closed won and pipeline deals automatically link to relevant sales targets. Targets are measured against secured business plus the anticipated revenue from funnel opportunities.

The GSP Target Tracker is easy to use and compares both closed won and pipeline deals to the sales target.

The sales targets are entered into a custom object for each sales person for each month.

In the example above, we’re looking at the sales target for Michael Watson in April.

The lower portion of the screen shows the Opportunities automatically linked to this target record. The Target Tracker does this by looking at the Close Date of the Opportunity and the Opportunity Owner.

Opportunities link automatically to the relevant sales targets.

The Opportunity links to the relevant target; in this case, Michael Watson’s sales target for April.

If the Close Date or the Opportunity Owner change, the Opportunity is automatically unhooked and linked to the newly relevant target record.

The embedded chart on the left hand side of the page shows Michael’s target in blue, his Closed Won deals in green and the Expected Revenue of his April pipeline deals in orange.

The purple bar shows that based on these numbers, Michael has a shortfall against his target.

The doughnut chart to right provides analysis of Michael’s April pipeline by Opportunity Stage. This means both Michael and his manager have clarity on the likelihood of hitting target based on the pipeline deals.

Dashboard charts summarize company and team level information.

Dashboard charts summarize company and team level performance against sales targets.

The dashboard chart shows over / under performance against monthly sales target at the company or team level.

Drill down to the underlying report to view the sales rep target. This compares the sales target with the value of Closed Won deals, Expected Revenue from the pipeline.

Track Sales Performance And Pipeline Versus Target

Get more details about the GSP Sales Target Tracker

 

Pros of the GSP Target Tracker

  • It’s easy for sales reps use. Opportunities automatically link to relevant targets.
  • Highly visual information on performance against target.
  • Extensive drill down capability from company level performance to sales team and individual rep.
  • Assess the quality of the pipeline and its potential contribution to target achievement.
  • Easy to set up (implemented through a managed package).

Cons of the GSP Target Tracker

  • A (very reasonable!) license fee.

It’s the right choice if

  • You need a powerful solution that is easier to use than the Forecasts tab.

Recorded Webinar on sales targets in salesforce

Watch Gary Smith and Nick Ambrose demonstrate the three solutions in action.

We have implemented each of the options described in this blog post for customers. Contact Us to find out more about applying each approach in your business.

Drive Lead Conversion Success With Fresh Insight | Webinar

Drive Lead Conversion Success With Fresh Insight | Webinar

Join me and my team for a compelling webinar on power Lead Metrics in salesforce.

We promise you will get fresh insights.

As a result of this webinar you will be able to take new action to drive lead conversion rates in your business.

Date: November 1st, 2017
Time: 11 AM EST, 4 PM GMT
To join: Register here today.

Lead Conversion Success Webinar Topics

The topics we will cover include:

• How to implement a robust lead management process.
• Measuring the revenue contribution of converted leads.
• Track key metrics to improve lead performance.
• Compare win rates on opportunities created from converted leads.
• How to analyse lead performance from multiple angles and identify improvements.

The webinar will give you a unique understanding of lead metrics in salesforce. You will gain new, specific actions to increase revenue from leads that you can immediately apply in your business.

You will, of course, have the opportunity to ask questions.

We are limited to 80 places on the webinar. Don’t miss out. Register today.

I’m looking forward to you joining us.

5 Sales and Marketing Alignment Recommendations That Nail It

5 Sales and Marketing Alignment Recommendations That Nail It

“I’ll prove it to you!” exclaims Jack Kosakowski.

“Let me show you the current state of Sales and Marketing alignment.”

It’s September 12, 2017. I’m attending the London Sales Hacker event.

We’re in the middle of a panel discussion, “Sales And Marketing Alignment To Build Massive Pipeline”.

Also on the panel is Jack’s marketing colleague, Creation Agency CEO, Jason Sibley.

The two have contrasting views.

“Everyone in the audience that’s in sales, stand up!” orders Jack.

Two-thirds of the 600-strong audience stand.

“Okay,” continues Jack.

“Stay standing if you believe Marketing give you enough warm leads.”

I look around.

Not a single person remains standing.

Jack turns to the rest of the panel.

“See what I mean!” he proclaims, waving his hand theatrically at the seated room.

“Marketing aren’t aligned with Sales at all.”

Sales and Marketing Alignment is a Good Thing

Sales and Marketing alignment seems like common sense.

If Sales and Marketing work together as one, then revenue generation is more efficient and effective.

The evidence bears this out.

The Aberdeen Group research identifies a direct causal link between Sales and Marketing alignment and revenue growth.

Your own experience will probably concur.

When Sales and Marketing align successfully, revenue increases because:

  • Marketing campaigns focus on the most beneficial topics and channels.
  • Salespeople have a higher volume of well-qualified, sales-ready leads.
  • Sales have the correct quantity and quality of content needed to convince prospects.
  • Marketing deliver company-specific and marketplace insights that improve selling effectiveness.
  • Metrics and qualitative feedback are available for continuous improvement of sales and marketing performance.

What company doesn’t strive for these benefits?

Unfortunately, like many things that sound easy on paper, Sales and Marketing alignment turns out to be more difficult to achieve in the real world.

In fact, in my experience, the lack of alignment is the cause of more angst in business than any other topic.

However, if Sales and Marketing alignment is something that business wants, why is it so difficult?

The Sales and Marketing Blame Game

The conflict between Sales and Marketing plays out in many companies.

Sales blame Marketing and Marketing blame Sales.

To quote Tavris and Aronson, “Mistakes were made (but not by me)”.

In other words, both sides blame the other for the repeated failure to turn marketing activity and leads into won opportunities.

There are many reasons for this finger pointing.

  • Goals that do not encourage cooperative behaviour.
  • KPIs that do not align.
  • Personal desire to look good against rivals, including vying for the future CEO position.
  • Short-term sales objectives conflicting with longer-term marketing priorities.

I could probably go on.

Popular Suggestions for Sales and Marketing Alignment

Do a Google search on Sales and Marketing alignment and you will discover no shortage of content.

In fact, 40.3 million search results.

You’ll even find there’s a Sales and Marketing alignment summit.

To examine how people think Sales and Marketing should align, I carefully reviewed the top 50 search results.

You probably don’t want to spend as much time on this as I did, so I created a summary of the suggestions that you can read here.

Some of the suggestions will clearly have a positive impact.

It’s hard to disagree, for example, that a robust lead hand-off process should be implemented, that Sales and Marketing must define and agree the customer buying process and that they must communicate regularly.

Likewise, agreeing common definitions of what a well-qualified, sales-ready lead looks like is a precursor for successful implementation of this process.

Other recommendations are more controversial.

For example, potentially not every business will want to make both sales and marketing the responsibility of a single chief revenue officer.

So what else can we do?

5 Sales and Marketing Alignment Recommendations

Let’s return to the problem.

Sales and Marketing frequently blame each other for missed objectives.

However, in most cases, as Jack and Jason concur at the end of their Sales Hacker panel discussion, neither side is entirely right nor is either side entirely wrong.

Unfortunately, both Sales and Marketing come to the debate with their own preconceived ideas on the responsibilities of the other.

It’s these ingrained perceptions and, in many cases, preconceived views of the way the world works that determine where each side places the blame.

We need to break out of this narrow horizon to align Sales and Marketing successfully.

But what’s going to smash through the existing paradigm?

Enter center stage: CUSTOMERS and PROSPECTS.

We need the direct involvement and input from customers and prospects.

That may not sound radical.

Yet it’s something many companies hardly achieve at all.

So, here are my five recommendations for Sales and Marketing alignment.

  1. Create an effective open feedback loop with input from customers and prospects.
  2. Create an effective closed feedback loop with quantitative metrics.
  3. Re-shape your end-to-end revenue process and methodology.
  4. Implement a process of continuous marginal gains.
  5. Make project-led structural improvements.

I have applied these Sales and Marketing alignment recommendations in many businesses with success.

Let’s go through them.

1 – Create an effective open feedback loop

Marketers strive for a closed feedback loop that links lead and opportunity outcome back to the originating campaign.

This closed loop delivers quantitative metrics on lead conversion rates and the efficacy of marketing campaigns.

This is crucial. I’ll explain how to implement an effective closed feedback loop successfully in Recommendation #2.

However, an open feedback loop is something else that provides other benefits.

Input from external sources is what defines an open feedback loop.

In other words, when there’s no external feedback or stimuli coming into play, nothing will challenge existing perceptions or alter the status quo.Matthew Syed describes it this way.

“Without external input, failure doesn’t lead to progress because information on errors and weaknesses is misinterpreted or ignored; an open feedback loop does lead to progress because the feedback is rationally acted upon.”

To achieve Sales and Marketing alignment we need to break the existing cycle.

It means we need an open feedback loop.

Feedback on success and failure

For the purpose of Sales and Marketing alignment, an open feedback loop means we need input from customers, prospects and leads.

We need this input not to apportion blame, but to understand the customer buying process and to make improvements to our sales cycle.

In other words, unless with have this external input, the status quo will continue. Sales and Marketing will still to blame each other for ineffectiveness, because what else is there to do? There is nothing to challenge the existing model in the absence of customer and prospect insight.

Specifically, to break out of this, we need input on the customer buying process in two areas.

  1. We need to learn from success. Why did we win?
  2. We need to learn from failure. Why did we lose?

I recognize the latter, in particular, is a deeply uncomfortable recommendation for many businesses.

Getting first-hand feedback on the reasons for failure is something we do infrequently, either as people or as organisations.

However, this is critical.

Think about it.

How often is ‘price’ blamed for a lost deal or an opportunity that does not progress?

I can vouch from personal experience of conducting research on behalf of many clients that price is rarely the root cause reason for a deal sales that doesn’t succeed.

For example, here is verbatim, what one person told me recently:

“Yes they were the most expensive and the price was too high, but if we had wanted to work with them I’m sure we could have gotten around that somehow. The fact is we didn’t want to work with them, so it was easy just to say, ‘your price was too high’”.

Prior to this externally focused research, this company spent many months tinkering with their pricing strategy. With no discernible impact on opportunity conversion rates.

It was only after getting external feedback, from customers and prospects that the company began to truly learn why they win and why they lose.

Areas to get external feedback

Here are examples of specific areas on which you can gain valuable qualitative feedback:

  • Why do some unqualified leads fail to become qualified leads?
  • What stops some qualified leads becoming opportunities?
  • Why do some deals not progress beyond the initial, discovery stage?
  • What causes some deals to be lost at the negotiation stage?
  • What is the compelling reason why certain deals are won?

And lots more.

The key thing about this feedback is that it is comes from external rather than internal sources.

Steps to get external feedback

Gather this external, qualitative feedback in many ways, including:

  • Invite customers and prospects that didn’t buy into the company e.g. a facilitated team meeting.
  • Commission independent in-depth telephone and face-to-face interviews.
  • Get independent observation of live sales calls and visits.
  • Sit alongside the customer in their office and experience ‘walking in their shoes’.

One more thing about external feedback.

Get to the heart of what the customer means. Don’t accept at face value, ‘I don’t like the brochure’. Discover the underlying reasons; for example, whether this view relates to the core messages, the way the content is written, or the physical appearance.

In an upcoming blog, I’ll detail six ways you can get this external feedback.

To get a heads-up when this post is live, register here.

2 – Create an effective closed feedback loop

The first recommendation is to create an open feedback loop. This creates qualitative, externally sourced feedback that leads to improvement.

However, external feedback is only part of the story.

You also need accurate and reliable internal feedback. You gather this through a robust closed loop feedback process.

This needs to happen in two ways.

  1. Insist on quantitative feedback.

Link every lead and opportunity to its source and originating marketing campaign. If no campaign produced the lead or opportunity, record this as well.

2. Insist on qualitative feedback.

On every lead handed-off from Sales to Marketing, whatever the outcome, ensure there is qualitative feedback transferred the other way.

How to implement a closed loop for quantitative feedback

The only effective way to achieve this is by using a CRM or sales automation application.

Unfortunately, many companies fail to implement the closed loop successfully by failing to follow these 5 best practices.

For detailed advice on how to design the closed loop process, read The Difference Between Leads and Opportunities. This blog post contains downloadable process diagrams in Visio and Powerpoint to help get you started.

This closed loop feedback on quantitative data also means you can collect insightful metrics on lead conversion metrics and the contribution that marketing campaigns make to overall revenue.

How to implement a closed loop for qualitative feedback

CRM systems also provide ways to capture qualitative feedback from Sales to Marketing on each lead.

For example, if your company uses salesforce.com, use Chatter on Leads and Opportunities to gather this feedback.Collect qualitative feedback from sales that is passed back to marketing.Create reports that summarise these Chatter posts. Create tags to group Chatter posts together.

3 – Re-shape your revenue process and methodology

Your feedback loops are gathering qualitative and quantitative information on your end-to-end sales cycle.

Clearly, that information is of no value unless you do something with it.

So what should you do?

The two things Sales and Marketing must do together with all this information and feedback are:

  1. Re-design your revenue process.
  2. Re-define your revenue methodology.

The difference between the two:

Process is the planned steps you take to achieve something.

Methodology is how you take those steps.

An example:

Your sales process might include a discovery meeting. That’s a step in your process.

Methodology is the way you conduct that meeting. This includes the words you use to introduce the meeting, the questions you ask and the way you agree the next steps.

In other words, the meeting is a process step; the way the meeting is conduced is the methodology.

Some (although admittedly not many) businesses I encounter have a clearly-defined sales process.

The stages of the process are well understood by the sales team. The CRM system reflects this process in its opportunity stages. Reports and dashboards report the pipeline in a consistent way. There is uniformity across the team in terms of the process they follow.

At least that’s sometimes the case.

However, in these businesses, what is far less uniform is the methodology the team members adopt. Sales people are left to decide for themselves HOW they undertake each process step. These companies can benefit hugely from identifying and sharing best practice and delivering training on how to execute the sales process.

How to re-shape your process and methodology

Sales and Marketing recommendation 3 is about re-designing your process and methodology based on the feedback you have received.

Here are the specific steps to take.

  • Get Sales and Marketing people together in the same room with a large whiteboard.
  • Pick one significant deal your business recently lost (or a deal that withered on the vine).
  • Map the end-to-end sales cycle on the whiteboard.
  • Figure out everything you did (i.e. the process).
  • Describe how you did those things (i.e. the methodology).

Then take these two further steps:

  • Work out how to improve your process.
  • Work out how to improve the execution of that process.

This separation of process and methodology means you focus on both what and the how.

For example, if we had to go after the same deal again, what activities would we repeat? How could we execute them more effectively? What didn’t we do that, with the benefit of hindsight, that we should have done? How would we do those activities?

Examine more deals

This is what you do next:

Repeat this cycle of examination for a successful deal.

Capture the things that worked well and those that didn’t. With the benefit of hindsight, even though the deal was won, identify the activities whose execution can be improved.

Then do the whole thing again with another deal.

Work through four to six deals.

You know the score:

Figure out how to improve the process and the methodology. Remember to use the feedback from recommendations 1 and 2 to decide what these improvements look like from a customer and prospect perspective.

Document the improvements to process and methodology

Recommendations 4 and 5 explain two ways to implement these improvements.

However, there’s a precursor to implementation.

The sales and marketing workshops will produce many whiteboard photographs, flipchart sheets and handwritten paper notes.

Get it into a structured format.

This means:

  • Process diagram(s) that describe the ideal end-to-end revenue cycle for existing and potential customers.
  • Notes and use cases that articulate how the process is best fulfilled.

Then you’re ready to start implementing changes that will achieve sales and marketing alignment.

4 – Continuous process of marginal gains

Now Sales and Marketing have fresh insight.

We understand what works well and what needs improvement.

We have information about success and failure. Your teams have figured out what is important to customers and prospects and what they care about less.

Here’s what you do next.

Implement a process of marginal gains. This is Sales and Marketing alignment recommendation 4.

Marginal gains is the term originally popularized by Dave Brailsford, the hugely successful head of the Sky pro-cycling team. 

Brailsford’s belief was that if you improved every area related to cycling by just 1 percent, then those small gains would add up to remarkable improvement. They started by optimizing the things you might expect: the nutrition of riders, their weekly training program, the ergonomics of the bike seat, and the weight of the tires.

But Brailsford and his team didn’t stop there. They searched for 1 percent improvements in tiny areas that were overlooked by almost everyone else: discovering the pillow that offered the best sleep and taking it with them to hotels, testing for the most effective type of massage gel, and teaching riders the best way to wash their hands to avoid infection. They searched for 1 percent improvements everywhere.

Brailsford believed that if they could successfully execute this strategy, then Team Sky would be in a position to win the Tour de France in five years’ time. He was wrong. They won it in three years.

Source: This Coach Improved Every Tiny Thing By 1% And Here’s What Happened

Whether sport or business, success or failure is determined by the aggregation of multiple marginal gains.

Each gain may be minimal in itself, but when combined together, they have an irresistible impact.

How marginal gains works

Suppose you’re standing at point A.

You want to get to the top of the hill, point B.Marginal gains is the first way to implement changes that achieve sales and marketing alignment.Marginal gains will get you there. Take a small step.

Test whether you went up or downhill.

If you’ve gone uphill, take another small step in the same direction. Test again. Repeat the process.

If you’ve gone downhill, take a small step in another direction. Test again.

Keep repeating this process and without fail, you will get to the top of the hill. You’ll eventually arrive at point B.

Applying marginal gains in your business

Marginal gains means you identify multiple ways in which you can make small improvements. Make enough of them, and you have a significant advantage.

So this is what you do.

  • Apply the feedback you gained and work out the many small ways in which you can improve the customer and prospect experience.
  • Refer to your sales and marketing funnel. Look for small changes that will improve the conversion ratio at each point.
  • Examine the end-to-end lead generation and sales process. Search out the multiple small changes that together, will collectively add up to a big difference.

Remember, every error, every flaw, every failure and every piece of adverse feedback, however small, is a marginal gain in disguise.

Sales and Marketing must regard this information not as a threat, but as an opportunity.

Finally, how do you decide which marginal gains take priority for implementation? That’s why you did Recommendation 3. You worked out what was important to customers and what was not.

Focus on the marginal gains that customers and prospects care about the most. The ones that relate most closely with the unique value your business adds.

Test marginal gains

Here’s what many people forget about marginal gains.

They forget about testing and measuring.

“Marginal gains is not about making small changes and hoping they fly. Rather, it is about breaking down a big problem into many small parts and then rigorously testing to establish what works and what doesn’t”. Mathew Syed. Black Box Thinking.

In other words, test everything. Make changes and validate that they have the result you anticipate.

How do you do this testing? Keep using the open and closed feedback loops we described in Recommendations 1 and 2.

How to implement a marginal gains process

Implementing a marginal gains approach successfully requires a structured approach to communication and decision-making.

Here’s an example of how Modernis embedded this dialogue to achieve Sales and Marketing alignment.

In this company, marketing pass leads to inside sales reps. The inside sales reps aim to turn these leads into qualified appointment for field reps.

  • The inside sales team leader meets daily with the marketing team leader.
  • Each field rep speaks daily with his or her inside sales rep to discuss leads and appointments.
  • Each regional sales manager has a weekly face-to-face or conference call with the inside sales team leader and the marketing team leader.
  • The VP of Sales and VP of Marketing hold a weekly conference call. They also meet formally face-to-face monthly.

The format of the discussion is the same in every case. Here’s the agenda:

1. Review:
Quantitative results and metrics.
Qualitative feedback from reps.
Qualitative feedback from customers and prospects (this happens only on a weekly basis).
Results from tests on marginal gains previously implemented.

2 Agree:
Those changes that will maintained and those to be reversed.
New marginal gains that can be tested.

There’s a formal method for recording these conversations in the CRM system.

Team leaders review these records in their weekly meetings. The VPs of Sales and Marketing do likewise.

This approach has transformed Sales and Marketing alignment. It gives both a common purpose, strategy and framework for working together.

The result at Modernis is an uplift in opportunity conversion rates of 17%.

5 – Make project-led structural improvements

Seeking marginal gains is something you do every day.

My final recommendation on Sales and Marketing alignment is something you do once or twice a year. Sometimes not as often as that.

Look at this diagram of two hills.Marginal gains will get you to the top of the lower hill. To scale the higher mountain and achieve sales and marketing alignment, you need occasional step change improvements.You’ve already climbed the first hill. Marginal gains and continuous improvement got you from point A to point B.

Better design

Marginal gains works for day-to-day improvements. As we’ve seen, it’s highly dependent on testing and feedback to check each step.

However, it will never get you to point D. The top of a mountain. That mountain represents a better design. A better way of doing things.

The problem is that when you are at point B, the top of the smaller hill, a small step in any direction always takes you downhill.

To scale the mountain you need the vision and confidence to take a big leap.

Make that leap in the right way and you will likely land at point C.

Then what do you do?

Start again seeking marginal gains. Test each change.

And you know what?

Through a combination of step-change and marginal gains you will eventually arrive at point D.

How to make the big leap

To make that leap, to get to point D, you need a better design. A fundamentally different and improved way of doing things.

That might be a marketing automation system. It can be the introduction of new products or services. A new sales strategy. A culture change.

It may be many other things.

Above all, however, it’s a visionary step change that results from detailed analysis of quantitative metrics, salesperson feedback and qualitative input from success and failure with leads, prospects and customers.

These leaps require a formal, structured transformational project.

You need to do all the things you expect from a successful project: robust business case; clearly defined scope; agreed goals and objectives; realistic implementation plan.

But you know where the process starts. It starts with feedback and input from external sources, combined with innovation to product a best-in-market revenue cycle.

Sales and Marketing Alignment in your Business

“You know what?” says Jack Kosakowski at the end of the Sales Hacker panel discussion.

“Sales can’t live without Marketing and Marketing can’t live without Sales”.

He’s right.

Break through the existing paradigm and Sales and Marketing enter a beautiful relationship

One that can play-out in your business if you follow these five compelling recommendations for Sales and Marketing Alignment.

If you got value from this article:

  • If you think this is a solid article that other people will benefit from reading, I would be delighted if you share it on LinkedIn.
  • To get a heads-up when we publish our next Sales Enablement blog, register here.
  • I’d love to discuss these concepts with you in more detail. Simply fill in our form or give us a call (number at the top) and we’ll arrange to talk.

Good luck.

40.2 Million Google Search Results On Sales And Marketing Alignment | Summarized

40.2 Million Google Search Results On Sales And Marketing Alignment | Summarized

Search for sales and marketing alignment in Google and you get 40.2 million results.

I know this because I did a lot of research for my own article on Sales and Marketing Alignment | Proven Strategies For Success.

Although I must admit. I didn’t review all 40.2 million.

Just the top 50. Results, not pages.

Here’s a summary of the most popular suggestions on sales and marketing alignment from those Google search results.

For each suggestion, I’ve highlighted a recommended article. Bear in mind that these articles make their suggestions specifically in the context of sales and marketing alignment.

See what you think about each.

Then, examine my own recommendations for sales and marketing alignment in your business.

Sales and Marketing Alignment Popular Suggestions

1. Amalgamate Sales and Marketing Roles

In this scenario, a single person heads-up both Sales and Marketing.

Often this is in the context of forming a single, consolidated Revenue Function. The aim is to remove conflict over competing goals, priorities, and objectives.

This is exactly what Coca Cola did.

Recommended article:

Why Is Sales And Marketing Alignment All Of A Sudden So Important?

By Mike Lieberman

 

2. Make revenue the only objective

Judge both Sales and Marketing only on hitting the revenue quota. Everyone therefore has the same purpose and shared goal.

That way, conflict and blame disappear.

In other words, align Sales and Marketing around a single goal. That goal is revenue.

Recommended article:

Sales And Marketing Alignment: Why Marketing Leaders Need To Step Up

By Kara Burney

 

3. Define and agree Marketing KPIs

This popular recommendation involves defining and agreeing a number of core marketing metrics.

These metrics usually relate to Marketing Qualified Leads (MQLs), Sales Qualified Leads (SQLs) and Sales Accepted Leads (SALs).

Recommended article:

Sales And Marketing Alignment: The 8 Metrics That Matter

Author not specified.

 

4. Communicate more

In some companies, Sales and Marketing rarely meet or engage in meaningful dialogue.

It sounds reasonable that sales and marketing need to communicate more if they are to align successfully.

Other recommendations along these lines include having marketing listen-in on sales calls and spending time out in the field. Creating a weekly email and going for a beer and pizza together also figure.

Recommended article:

10 Tried-and-True Tips for Sales and Marketing Alignment

By Carolina Samsing

 

5. Agree buyer personas and the customer journey

This recommendation is to agree what the ideal buyer looks like.

That way, the end-to-end sales and marketing processes and all marketing collateral centres on the profile of the ideal buyer and the process in which they engage.

Recommended article:

Sales and Marketing Alignment: Best Practices for Building a Revenue Machine

By Craig Rosenberg

 

6. Re-design the end-to-end revenue process

Take a long hard look at the end-to-end process and agree jointly how to improve it.

The emphasis is on optimizing the end-to-end process. To do this, many companies have rightly extended the traditional opportunity-based funnels to include additional, earlier stages.

For example, here’s the funnel advocated by Marketo.

The model emphasises the increased role of Marketing at each stage in the sales funnel.

To improve Sales and Marketing alignment, Marketo recommend a joint focus on improving the conversion rate at each successive level in the funnel.

For maximum impact, consider the buyer persona during this exercise. Then produce content and communications that guides and encourages people through the funnel.

Recommended article:

What Is Marketing and Sales Alignment?

https://www.marketo.com/marketing-and-sales-alignment/

 

7. Agree the Marketing-to-Sales hand-off process

Successfully converting sales-ready leads to won opportunities requires an effective hand-off process from Marketing to Sales.

Many commentators advocate a Service Level Agreement (SLA) between Sales and Marketing on the hand-off process.

This SLA stipulates that, when Marketing pass a lead to Sales (based on pre-agreed qualification criteria), Sales will call the lead within a defined number of working hours.

Recommended article:

Lead Conversion Best Practices | 5 Proven Best Practices

Me, Gary Smith

 

8. Create better Content

Research by CEB (now part of Gartner) reveals that on average buyers are 57% of the way through the buying cycle before they engage with vendors.

It’s a popular statistic.

It implies buyers are consuming content on the web long before starting a buying process that is visible to sellers.

Our own research, interviewing prospects and customers on behalf our own clients, also bears this out.

It makes sense therefore, that creating better content and finding a way to get this in front of prospects will increase the chances that a buyer will choose to speak to a vendor.

Recommended article:

Sales and Marketing Alignment: Stop Talking, Start Understanding

Author not specified

 

9. Implement a marketing attribution model

Most B2B sales cycles take 3 to 4 months. Often longer.

In fact, if you include the time prospects spend searching for solutions and reviewing vendors before they actually engage with a potential supplier, the timespan extends significantly in some industries.

So how do you assess the contribution of your various marketing campaigns and web content to this extended sales cycle? How does Marketing prove to Sales that they really are having an impact? How do we quantify the contribution of Marketing to the revenue generation effort?

A marketing attribution model is one answer.

Attribution means value is assigned to all marketing campaigns that ‘play a role’ in the end-to-end sales process.

In other words, attribute a percentage of the opportunity amount to all campaigns on which a prospect responded.

Recommended article:

Revenue Attribution: The Missing Link To Your Marketing-Sales Interlock

Author: Eric Bauer

 

10. Create a content-based funnel

Research by Sirius Decisions found that 60 – 70% of all content churned out by Marketing goes unused by Sales.

IDC put the figure at 80%.

I doubt you know the statistic for your company, but we can all probably recognize that vast amount of content created for Sales goes unused.

The research identifies three key reasons for this.

Salespeople:

  • Aren’t aware the content exists.
  • Don’t know where to look for it.
  • Think there’s too much content to sift through, therefore don’t bother.

On this basis, here’s a popular recommendation for achieving better Sales and Marketing alignment: Create relevant content and get better organised.

This means putting all the marketing collateral in one place. Make it easy to search and find relevant material.  It also means communicating to salespeople about the content created by Marketing.

Recommended article:

10 Ways Sales Teams and Content Marketing Can Work Together

Author: Jonathan Franchell

Don’t forget:

Check out my 5 Compelling Recommendations For Sales And Marketing Alignment

 

Lead Conversion In Salesforce | 5 Proven Best Practices

Lead Conversion In Salesforce | 5 Proven Best Practices

I have seen many attempts to implement an effective lead conversion process in salesforce.

Not all of them successful.

That is putting it mildly.

In fact, businesses can often mangle their lead conversion process in salesforce.

The result is:

  • Reduced sales, because leads get lost.
  • Unnecessary friction between Sales and Marketing.
  • Lack of meaningful metrics on the efficacy of marketing campaigns.

This happens because companies are often unaware of lead conversion best practices in salesforce.

Salesforce Lead Conversion Best Practices

Therefore, here are five Salesforce Lead Conversion Best Practices for Sales and Marketing teams.

  1. Create an opportunity during lead conversion.
  2. Convert before passing to Sales.
  3. Convert leads when they are sales-ready, not before.
  4. Compare win rates on converted leads with standard opportunities.
  5. Insist upon feedback from Sales on every converted lead.

I explain specifically why these guidelines are best practices for lead conversion in salesforce.

I’ll also explain the circumstances when it’s right to NOT to follow these best practices,

Struggling with sales and marketing alignment? These lead conversion best practices contribute directly to Recommendation 2 in our 5 Sales and Marketing Alignment Recommendations That Nail It

Update: Join me for a compelling webinar on November 1, 2017 on Lead Conversion Success.

Best Practices #1: Create an Opportunity

When converting a lead you have a choice.

Create an opportunity or not?

Here’s what I mean.

Ticking the ‘Do not create a new opportunity upon conversion’ checkbox means creating an Account and Contact only.

No Opportunity arrives on the scene. At least, not during lead conversion.

#1 of the salesforce lead conversion best practices: Do not check the ‘Do Not Create Opportunity’ checkbox.

Here is salesforce lead conversion best practice #1:

Create an Opportunity when the Lead is converted. Do not check the ‘Do Not Create Opportunity’ checkbox.

The exception to this is when converting a Lead into a matching Account and Contact that already exists. I deal with this exception below.

However, if you are converting a new lead, it’s best practice to simultaneously create a new opportunity.

Create the opportunity upon conversion – Rationale

Two important pieces of information transfer from the lead to the opportunity when you create an opportunity during lead conversion.

Firstly, the Lead Source on the lead maps to the equivalent field on the opportunity. This means you can produce reports and dashboard charts on the contribution of different Lead Sources to revenue.

Here’s an example of the open pipeline by Lead Source.

Example of the open pipeline by Lead Source that is enabled by lead conversion best practice #1.

Secondly, the Opportunity links to the last marketing campaign to which the lead responded. This means metrics from the opportunity pass to the campaign.

In #1 of lead conversion best practices, the Opportunity links to the last marketing campaign to which the lead responded. This means metrics from the opportunity pass to the campaign.

These metrics mean you can track the contribution of each marketing campaign to the sales pipeline and revenue growth.

For example, here’s the pipeline by Campaign.

Lead conversion best practice #1 means the pipeline by Campaign can be displayed on a salesforce dashboard chart.

Opportunities not created upon lead conversion

Remember, we are talking about new leads here; not leads that match existing Accounts and Contacts. More on that in a moment.

Here’s what happens in some businesses.

The lead converts with the ‘Do not create opportunity’ checkbox ticked.

The lead converts to an Account and a Contact only.

The salesperson follows up. Once the sales cycle starts to progress, the salesperson creates an opportunity.

Unfortunately, the two pieces of information that inform marketing effectiveness are lost.

In other words, the Lead Source does not pass to the opportunity. The opportunity does not link to the Campaign.

These linkages only occur when the lead conversion creates the opportunity otherwise there is no closed loop reporting from the opportunity to the campaign.

Exceptions to best practices #1

This salesforce lead conversion best practice doesn’t apply in every situation.

Sometimes, there are legitimate reasons not to create an opportunity.

For example, let’s say an existing contact downloads an eBook from your website. You capture their email address in a web to lead form as part of the download process.

Salesforce creates a lead when the web-to-lead form passes through the data.

Here is what to do.

Use the Find Duplicates button to find matching Leads and Contacts.

Use the Find Duplicates button to find matching Leads and Contacts.

Next, convert the lead.

Let’s say you decide there is no new opportunity. Alternatively, there may already be an open opportunity on the Account that’s in progress.

This time, check the ‘Do not create opportunity’ checkbox.

Salesforce recognizes there’s an existing match on the Account.

During the lead conversion, Salesforce recognizes there’s an existing match on the Account.

Salesforce also presents the option to merge the lead data into an existing Contact.

Salesforce also presents the option to merge the lead data into an existing Contact.

No new opportunity is created.

However, the campaign information passes to the Contact. This means you can see the campaign history on the Contact.

After the lead conversion, the campaign information passes to the Contact. This means you can see the campaign history on the Contact.

Further reading on lead conversion best practices #1

This blog post describes a Marketing Dashboard for salesforce that gives examples of the reports and charts using Lead Source and Campaigns.

Use the dashboard to generate powerful insight on marketing effectiveness in your business.

CLICK TO SHARE ON LinkedIn: Lead Conversion Best Practices #1

Best practices #2: Convert before passing to Sales

Best practice #1 status says create opportunities when the lead converts.

Next question.

Who should do the converting?

Here are your choices.

  • Option 1. The marketing or inside sales team convert the lead and pass the Account, Contact
    and Opportunity to sales.
  • Option 2. The lead passes to sales and the salesperson converts the lead to an Account, Contact and Opportunity.

This is lead conversion best practices #2:

As a rule, have marketing or inside sales convert the lead and pass the Account, Contact and Opportunity to sales.

This is why you should adopt salesforce lead conversion best practices #2.

  • The risk that lead conversion best practices #1 is broken, reduces significantly.
  • Valuable sales time is not spent re-qualifying leads. An opportunity is a more concrete manifestation of a potential sales deal.
  • Qualifying leads and judging when to convert the lead, is a skill in its own right. If you are doing this day-in- day-out then you are likely to be better at it than the average salesperson.

Converting leads before passing to sales gives a clear delineation between roles.

Centralizing this activity within marketing or an inside sales team also means tighter control of conversion processes and lead follow up activities.

However, implementing best practices #2 means there must be clear agreement between sales, marketing and inside sales on when leads should convert.

It also requires a robust process and unambiguous configuration in salesforce to support this process.

Exceptions to best practices #2

In small companies, the marketing, inside sales and salesperson may be one person.

In this case, this salesforce lead conversion best practice tip does not apply.

However, in larger businesses, where these functions are separated, it is generally better for leads to be converted before they’re passed to sales.

 

Further reading on lead conversion best practices #2

We explain the lead conversion process in detail. It includes process diagrams that you can download and use to kick-start your lead conversion arrangements.

CLICK TO SHARE ON LinkedIn: Lead Conversion Best Practices #2

Best practices #3: Convert leads when sales-ready

When is the right time to convert a lead?

That’s one of the great business challenges of our time.

Here is lead conversion best practices #3. It’s the Goldilocks advice:

Convert the lead when the person is sales-ready. Not too warm and not too cold. In other words, when the lead is ready to speak to a salesperson.

Of course, this begs the question:

How do we know when the lead is sales-ready?

Sometimes it’s easy.

A lead fills in a web form requesting a call. You’re quickly going to ascertain whether there is a potential sales opportunity. If so, convert the lead straight away.

However, here is the mistake I often see.

Leads convert and pass to sales far too quickly.

An example:

The marketing department of one of our clients ran a webinar.

They got an astonishing 800 registrants. 400 people attended the live session.

Marketing immediately passed the leads to sales.

“It will be like shooting fish in a barrel,” said the VP of Marketing.

Only it wasn’t. In fact, hardly any deals materialised.

Many of the leads were not sales-ready. They attended the webinar for early-stage education. They did not immediately want to buy.

In addition, sales were ill-equipped to suddenly deal with 4 to 800 new leads.

Here are three factors that influence lead conversion timing:

  • Channel. An inbound phone enquiry is at one of the scale. Leads from a purchased list are at the
    other.
  • Market maturity. Leads will generally convert more quickly in companies that are transforming marketplaces with new, innovative products unfamiliar to buyers. If you operate in a mature marketplace with lots of competitors, it will be longer before leads are sales-ready.Engagement. For this, you ideally need a marketing automation platform such as Marketo or Pardot integrated with salesforce. These applications help you quantify more scientifically when leads are kept sales-ready.

Few people ask their partner or spouse to move in at the first sign of interest. It’s the same with leads.

Convert the lead when there is evidence of commitment.

Recommended reading on lead conversion best practices #3

Why Sales Complain About Marketing Leads

CLICK TO SHARE ON LinkedIn: Lead Conversion Best Practices #3

Best practices #4: Compare win rates

Is all this effort worth it?

Do the converted leads contribute anything to revenue?

That’s a mystery in most companies.

However, here’s an example of a salesforce dashboard chart and report that compares sales revenue from converted leads with opportunities created directly on Accounts.

Salesforce lead conversion best practices #4 allows you to track the contribution of converted leads.

The chart and report put the contribution of converted leads into perspective.

Now go further.

Here’s salesforce lead conversion best practices #4:

Compare win rates on opportunities from converted leads with opportunities created directly on Accounts.

Here’s an example:

Win rates compared of converted leads versus direct opportunities.

Apply this salesforce lead conversion best practice to create high impact, actionable insight in your business.

Recommended reading on lead conversion best practices #4

7 Lead Conversion Metrics You Should Be Tracking (But Probably Aren’t)

SHARE ON LinkedIn: Lead Conversion Best Practices #4

Best practices #5: Insist on qualitative feedback

The lead conversion metrics in best practices #4 deliver powerful quantitative insight.

So far so good.

For maximum benefit, insist upon salesforce lead conversion best practices #5:

Transfer qualitative feedback from Sales to Marketing or Inside Sales on every single converted lead.

Use Chatter to capture this feedback.

Here’s an example of what I mean.

Lead conversion best practices #5 recommends transferring qualitative feedback from sales to marketing.

This feedback means sales and marketing collaborate on continuous improvement in lead qualification and nurture.

Put in place a process in which sales managers and marketing team leaders review this feedback.

Examine the qualitative feedback in conjunction with the lead conversion metrics from best practices #4.

It’s a sure-fire way to continually improve the efficacy of marketing campaigns and decision making on when to convert leads.

A Call To Action

Update: Join me for a compelling webinar on November 1, 2017 on Lead Conversion Success.

These five salesforce lead conversion best practices have helped many organizations implement robust lead management processes.

The result is far superior sales and marketing alignment.

The means higher opportunity win rates and increased revenue.

You can apply all of these best practices in your business.

But wait.

There’s more.

Get in touch. We will provide a 30-minute free consultation to help improve lead conversion in your business. Simply fill in our contact form here.

Got value from these lead conversion best practices? Please help us spread the word by sharing on your favorite social media channel!

7 Lead Conversion Metrics You Should Be Tracking (But Probably Aren’t)

7 Lead Conversion Metrics You Should Be Tracking (But Probably Aren’t)

Your business puts a lot of effort into generating converted Leads.

However, are they worth their salt?

Do the leads passed from Marketing to Sales contribute revenue?

In most businesses, it is only possible to answer these questions using anecdotal evidence.

Indeed, very often I find businesses are poor at tracking lead conversion metrics. They know how many leads convert to opportunities, but that’s pretty much it.

Unfortunately, this means they are unable to figure out how to optimize revenue from converted leads. They don’t know what is working and what is not.

This also means they do not realize when marketing and sales time waste time on non-productive leads.

However, to do this you need to monitor more than simply the number of converted leads.

Fortunately, lead conversion metrics are easy to implement.

I’ll show you seven lead conversion metrics your business should be tracking today.

At the end of this blog post I’ve included step by step instructions on how to create the underlying indicator that allows you to track these lead conversion metrics.

One final thing before we move on. These metrics assume you have a solid lead conversion process in place. This includes a hand-off process from marketing to sales that ensures leads do not fall between the cracks. Use this blog post for advice on implementing a robust lead conversion process.

Update: Join me for a compelling webinar on November 1, 2017 on Lead Conversion Success.

What is a Converted Lead?

Let us be clear what we are talking about here.

Lead conversion occurs when one person (often in Marketing) ‘converts’ an existing lead into an Account, Contact and Opportunity. The Opportunity passes to the sales team to begin the sales process. This defines a converted lead.

Diagram summarizing lead conversion process. This process is the basis for creating the lead conversion metrics.Opportunities for new customers are usually created from a converted lead.

For example, a potential customer downloads an eBook. The prospect receives emails over time providing educational material and the relationship deepens.

The person eventually receives a qualification call. If the lead is ‘qualified’ then an opportunity is created and passed to a salesperson.

Contrast this with opportunities for existing customers. In these cases, the salesperson creates an Opportunity directly on the Account record.Diagram summarizing the process for creating an opportunity directly on an Account.No lead is involved. The opportunity is linked to an existing customer or prospect Account.

Lead Conversion Metrics

Here are the seven lead conversion metrics I recommend.

1 – Contribution of Converted Leads

2 – Win Rates of Converted Leads

3 – Average Deal Size of Converted Leads

4 – Win Rates by Opportunity Owner

5 – Win Rates by Lead Owner

6 – Win Rates by Lead Source

7 – Win Rates by Campaign

Let us examine each lead conversion metric to understand how it contributes to increased revenue.

 

1 – Revenue Contribution of Converted Leads

This metric quantifies the contribution of converted leads. It shows the overall contribution of converted leads to total revenue.

Lead conversion metric #1 - contribution of converted leads to revenue.

The green column in the dashboard chart shows the $ revenue contribution of opportunities derived from converted leads.

The blue column is the revenue from opportunities created directly on existing Accounts.

Looking at the underlying report, we can see that overall, converted leads contribute 33% of revenue.

Here’s the key thing about this lead conversion report and chart.

It gives you context for the other lead conversion metrics that follow.

For example, whether the figure of 33% is good or bad depends upon the context of your business. If you are a new, start-up company, you might expect the contribution from converted leads to be higher.

In a well-established, mature company, the figure may be lower if a significant proportion of revenue comes from repeat business with existing customers.

Remember, you can adjust the report to analyse the numbers further. For example, there may be significant variations by geographical territory or industry.

Use the report and dashboard chart to identify a ratio that doesn’t ‘look right’ within the context of your business. Then review the seven lead conversion metrics to investigate further.

 

2 – Win Rates of Converted Leads versus Not Converted

In this first lead conversion metric, we’re comparing the win rate of opportunities that came from converted leads versus those opportunities created on existing Accounts.

Remember, a converted lead will result in a new Account.

An existing customer, and some prospects, will already exist as Accounts.

In this case, we are comparing opportunities that started life as a lead, with those opportunities that the salesperson linked to an existing customer or prospect.

The win rate defines the ratio of won versus lost deals in a given period.

Lead conversion metric #2 - win rates on converted leads and direct opportunities.

In fact, we have two lead conversion metrics here.

  • Win Rate by Count. This compares the number of deals won and lost.
  • Win Rate by Amount. This compares the value of deals won and lost.

In our example, we can see that the win rates for converted leads is lower that the win rate for direct opportunities.

The chart also shows that for converted leads, the win rate by Amount is higher than the win rate by Count. This means a successful outcome on higher value deals is achieved more often compared to lower value deals.

The situation for opportunities not created from converted leads reverses.

A greater proportion of lower value deals are successfully won. We can see this because the win rate by Count is greater than the win rate by Amount.

In many ways, we might expect this.

Converted leads will usually relate to new customers. It’s reasonable to expect the win rate for new customers to be lower than the win rate for existing customers.

Similarly, many deals with existing customers may be for add-ons, repeat purchases or other regular orders that may have a lower value than first-time opportunities.

Think about these numbers in the context of your business.

Does a low win rate on opportunities from converted leads indicate that leads are not being properly qualified? Alternatively, are salespeople focusing too much on existing customers, where we naturally expect the win rate to be higher?

 

3 – Average Deal Size of Converted Leads

This lead conversion metric compares the average size of deals that came from converted leads with opportunities created directly on the Account.

In many businesses, it may be reasonable to expect the average deal size of opportunities from converted leads to be higher. This is because a significant proportion of opportunities on existing Accounts are smaller, repeat business deals.

Lead conversion metric #3 - average deal size on converted leads.

In other businesses, the reverse may be true. For example, if your approach is ‘land-and-expand’, then new customer deals may be smaller, or even trials and prototypes.

Again, interpret the numbers in the context of your business. If appropriate, customize the report to examine this lead conversion metric by sales team, geography or other variable.

 

4 – Win Rate by Opportunity Owner

The lead conversion metric compares the win rate for different salespeople.

In our example, it shows that Geoff has a significantly higher win rate on converted leads compared to Lars.

Lead conversion metric #4 - win rates by opportunity owner.

Indeed, Geoff is successfully winning a greater proportion of opportunities that arose from converted leads (green bar) compared to opportunities created directly on the Account (blue bar).

There may be many reasons for this.

For example:

  • Does Geoff follow up more proactively on converted leads?
  • Does Geoff get fewer leads, but of much higher quality?
  • Is Geoff paying insufficient attention to existing customers?

Like other lead conversion metrics, the figures do not tell us what management action to take.  Rather, they tell us there is a variation in performance that is worthy of investigation.

It’s the outcome of that investigation that enables us to decide the right action.

Use this blog post for more advice on measuring sales team win rates.

 

5 – Win Rate by Lead Owner

The previous lead conversion metrics shows the win rate for converted lead and direct opportunities by opportunity owner.

Let us look now from a different perspective.

Many businesses have an inside sales team or other person responsible for making qualification calls to leads.

These people aim to create meetings for the sales rep, whether internally or field based.

Therefore, we need to understand how effective different inside sales reps are at creating good quality opportunities.

The lead conversion metric examines performance by lead owner.

Lead conversion metric #4 - win rates by lead owner.

A point to note. The win rate by Lead Owner metric shows the opportunity win rate based on Lead Owner at the time of conversion. This is not necessarily the person that converted the lead. However, we are assuming for the purposes of this lead conversion metric that the lead ‘owner’ and ‘converter’ are the same person.

In our example, we can see that a significantly higher proportion of the converted leads owned by Nick have a successful outcome to those owned by Tim.

Does this mean Nick is doing a better job of warming-up these leads as part of the qualification process? Is Tim converting too many, low quality leads? Alternatively, can Nick help to increase sales by lowering his ‘qualification threshold’ and increasing the number of leads he converts?

Again, we do not explicitly know the answer. However, we do now know the questions to ask.

 

6 – Win Rate by Lead Source

Assessing win rates by Lead Source and Campaign (next chart) are two further lead conversion metrics to determine the efficacy of converted Leads.

A quick recap on Lead Source.

Lead Source is a standard picklist field on the Lead. It records the originating source or channel of the Lead.

For example, typical Lead Source picklist values are Web, Trade Show, Purchased List, Phone Enquiry and so on.

When a lead is converted, the Lead Source carries through to the equivalent field on the opportunity. This means we can analyse opportunity outcome by lead source.

Lead conversion metric #6 - win rates by lead source.

Remember, the chart and report are not showing the number of leads created by lead source. Rather, they show the outcome of opportunities from converted leads by each lead source.

In our example, some Leads Sources perform better. For example, phone and web enquiries have a significantly higher opportunity win rate compared to other lead sources.

All other things being equal, it will be worth our while working to increase the number of converted leads from these sources, compared to other lead sources.

 

7 – Converted Leads by Campaign

The previous lead conversion metric (win rate by Lead Source) tracks the outcome of converted leads by broad category.

We can get another perspective by measuring the outcome of converted leads by Campaign.

This lead conversion metric provides valuable insight into the value for money of different campaigns.

Lead conversion metric #7 - win rates by marketing campaign.

In our example, leads from the Tech Meeting perform significantly higher than other Campaigns. All other things being equal, running more of these campaigns is a worthwhile investment in time and money.

For help on using Campaigns review this blog, The Best Advice You Can Get on Salesforce Campaigns.

 

Conclusions

Assessing any aspect of sales and marketing performance means coming at the situation from multiple angles.

Understanding the contribution of converted leads is no exception.

The lead conversion metrics this blog post describes give you the tools to do that.

Start by quantifying the overall contribution of converted leads to overall revenue. That gives you a starting point and context.

Then review each lead conversion metric. Ask underlying questions about each. Interpret the metrics.

And use the answers to increase revenue.

 

How to create the Lead Conversion Metrics

To create any of the reports and dashboard charts in this blog post, you first need to distinguish between opportunities created from converted leads and those created directly on an Account.

This is easy to do. Here are the step-by-step instructions.

1. On the Lead object, create a picklist field called Converted Lead.

Give this field two picklist values, Yes and No.

Here’s the important thing.

On this field, make Yes the default value. This means that when a new lead is created, it automatically inherits the value Yes in this field.

 

2. Create the equivalent field on the Opportunity object.

Again, give the picklist values of Yes and No.

However, this time set No as the default picklist value. This means that when an opportunity is created directly on an Account, it will inherit the value No.

You can see that in our example, we also clicked the Chart Colours button.

This means we can pre-define the colors that will appear in our dashboard and report charts. In our example, we chose Green for Yes and Blue for No.

 

3. Map the Lead and Opportunity fields.

Now we need to map the fields from Leads to Opportunities.

Go back to the setup area for Leads.

Scroll down and click on the Map Lead Fields button. Then click on the Opportunities tab.

This page allows you to map the two fields you have just created. Link the Converted Lead field on the lead to the Converted Lead field on the opportunity.

This means that when a lead is converted, the value in the lead for this field automatically passes to the mapped field on the opportunity.

In other words, the result is an opportunity created from a converted lead has the value Yes.

Alternatively, if the opportunity is created directly on the Account, it has the value No.

Bingo!

 

4. One final step – update existing records.

The Converted Lead field will be blank for all existing lead records. In other words, the process will only work for new leads created this point forward.

However, you can fix this by setting the value to Yes for all existing leads.

Do this using the Apex Data Loader or a Lead List View.

From this point forward, all opportunities created from converted leads will have the value Yes in the opportunity field.

That’s how to identify the relevant opportunities that will appear in your reports.

If you need a free 30 minute web consultation with us to help set up the fields or the corresponding reports, no problem. Simply use this form to get in touch and we’ll give you a hand!

How To Plug A Leaking Sales Funnel In The Right Place

How To Plug A Leaking Sales Funnel In The Right Place

Everyone in sales has a leaking funnel.

That’s the nature of the game.

It is, after all, why the sales pipeline is typically displayed as a funnel. There are fewer deals at each successive stage in the sales process.

If the funnel wasn’t leaking you’d win 100% of deals. (If you ARE winning 100% of deals then you have other pipeline management issues, it’s just that a leaking funnel is not one of them!).

In fact, for reasons we’ll come to, sometimes there are not enough deals leaking from the funnel. Opportunities hang around in the sales pipeline long after they have any realistic chance of closing successfully. These opportunities over-inflate the sales pipeline and eliminate any chance of accurate revenue forecasting.

So the two questions for every sales manager are:

  • Is the sales funnel leaking to a reasonable extent?
  • Is the sales funnel leaking in the right places?

And if the answer to either of these questions is ‘no’, then there’s a third question.

  • What should I do about it?

So here’s our 4 step guide to plugging a leaking funnel in the right places.

  1. Measure funnel leakage.
  2. Determine where the funnel is leaking.
  3. Understand why the funnel is leaking.
  4. Decide what action to take.

All four steps go together. If you don’t know how much the funnel is leaking – and where – then you can’t decide how best to plug the leaks.

1. How to measure funnel leakage

Here’s the Leaking Funnel dashboard chart and report.

salesforce dashboard chart based on the leaking funnel report.

The chart is created using a Stage Movement report. It shows the ‘From’ Opportunity Stage for all deals that have been set ‘To’ Closed Lost.

In our case the chart covers Opportunities where this Stage movement occurred in the last calendar quarter.

The leaking funnel dashboard chart and report show, for example, 17 Opportunities were set to Closed Lost directly from the Prospecting Stage. In other words, 17 deals that were in Prospecting, leaked from our funnel in the last quarter.

Early Stage funnel leakage

All other things being equal, there’s nothing wrong with deals leaking from the funnel at early stages in the sales lifecycle.

If the opportunity qualification process is working effectively, this is exactly what should happen. Deals are investigated. If there isn’t a win-win for supplier and customer, the opportunity should be qualified-out.

But how much early stage leakage is too much? One way to gauge this is to look at conversion rates (win rates). Are win rates are broadly in line with what you expect? If so, and the funnel leakage report shows an acceptable number of deals lost from the early stages in the pipeline, then you probably don’t have an overwhelming early-stage funnel leakage problem.

On the other hand, if you do have an early-stage leaking funnel issue, consider the actions outlined in Section 4 of this post.

Late Stage funnel leakage

What about deals that leak from the funnel at late Stages in the sales cycle?

Look the chart and report in our example. Is there a problem? 11 deals in the quarter were lost directly from the Negotiation Stage.

This is not good news. As Bud Suse says, there’s nothing worse than coming a close second.

Opportunities that leak from the funnel at late stages waste time, energy and resources and they drain morale.

It looks like we have this very problem in our example. Read on to see how to investigate further and decide on the right course of action.

2. Determine where the funnel is leaking

Knowing that we have a leaking funnel late in the sales cycle is only the starting point. Before we can take action we need to analyse the problem further.

Let’s start by looking at the same report summarized by salesperson.

Salesforce report that shows the leaking funnel for each salesperson.

This report shows the ‘From’ Stage for all deals that have been set to Closed Lost for each salesperson.

It looks like all salespeople have something of a problem. They are all leaking deals at late stages in the sales process.

Let’s reformat the report again to look at the leaking funnel problem from a different angle. Let’s compare new versus existing customers.

Leaking funnel of new customers compared to existing customers.

So now we have a much deeper understanding of where the funnel is leaking.

We have a real problem in losing deals to new customers, late in the sales cycle. We could reformat the Leaking Funnel reports in a variety of other ways to analyse further, but you get the idea. First we measured overall funnel leakage, then we investigated where in the sales process deals are slipping from the pipeline.

Now we need to understand why it is happening.

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE eBook today from our website

3. Understand why the funnel is leaking

So now we have identified specifically where the funnel is leaking. But there’s no point taking action just for the sake of it. We need to understand why deals are being lost.

Here are some ways to do that.

Get feed-forward from prospects

This is the most powerful way. Get insight from prospects with whom you’ve lost deals. Go and ask them where you went wrong. Find out how you could have acted differently to win the deal.

We prefer to call it feed-forward not feedback, because you then apply the lessons going forward to future opportunities.

Discuss the issue with salespeople

Have an open conversation about why the situation is occurring. We’ve facilitated many of these discussions – having an external, independent facilitator is a good way of ensuring an open, no-blame discussion. This is particularly powerful if it is combined with advice and insight directly from the prospects.

Implement a Reasons Lost field

Many companies have this type of picklist or text field on the Opportunity. It’s usually combined with a validation rule to ensure information is entered whenever a deal is set to Closed Lost.

Sometimes this yields useful information. But it’s tough to get the depth of information that can truly make a difference using this method alone. Plus, all too often ‘Price’ is entered as the reason the deal was lost. Qualitative information is key to making real change and a difference to future conversion rates.

4. Decide what action to take to plug the funnel leaks

Now we’re finally ready to take some action! Of course, the appropriate action depends upon the results of our analysis and investigation into why the funnel is leaking.

Depending on the situation in your business, here are some possible actions you can take.

Early Stage leaking funnel

  • Validate the opportunity qualification criteria and process. Check that deals are not being qualified-out too early.
  • Ensure early-stage opportunities for new customers are being followed up appropriately and thoroughly. Make sure they are not being ignored in favor of warm deals from existing customers.
  • Re-focus marketing and lead generation activities on target customers in the right segments.
  • Implement lead nurturing programs to ‘warm-up’ customers before being contacted by salespeople.
  • Implement lead scoring to identify and prioritize the early stage opportunities that should be followed up.
  • Implement a feedback process from Sales to Marketing or Telesales (or whoever generates the early stage opportunities in your business). This communication must explain when and why new deals are qualified-out. Use this feedback to improve lead and opportunity qualification criteria.

Late Stage leaking funnel

  • Improve the investigation stage in your sales process. Ensure that salespeople are not spending wasteful time chasing deals they have little chance of winning.
  • Define your ideal customer and make sure you have a framework for assessing potential deals. Bob Apollo has excellent advice on this.
  • Implement a bid / no-bid approval process. If you operate in a big ticket, RFP environment, get formal sign-off to pitching for a deal.
  • Review the process for identifying all stakeholders in the buying center. Check that key stakeholders are not being left out of the communication process early in the sale.
  • Submit contracts and legal documents for review earlier in the sales process. Get technical and legal issues on the table earlier, before everyone gets too entrenched in their position.
  • Get the right balance of focus and pressure. Are sales people chasing too many lame duck deals?
  • Check for dormant deals and evidence of sandbagging. Do some opportunities remain outside the pipeline until the salesperson is confident a deal is to be done? If so, then it’s interfering with your visibility of the funnel and conversion rate metrics.
  • Implement a lessons learned process to capture valuable information that will reduce funnel leakage in the future.

All funnels leak deals. It’s where, when and how that the funnel is leaking that’s important. Use the Leaking Funnel report in your business today to find out if you have a problem. Then dig a little deeper to figure out the right action for the right type of leak.

Free sales pipeline dashboard

Install the free GSP Sales Dashboard from the AppExchange. Includes the leaking funnel chart. Measure the size, quality and trend in your sales pipeline using the dashboard.

Related Blog Posts

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How And Why To Use Expected Revenue For Sales Forecasting

How And Why To Use Expected Revenue For Sales Forecasting

Not having an accurate revenue forecast is the bane of many sales managers’ lives.

Gut feel just won’t cut it.

Nor will a top-down percentage applied across all open opportunities.

Moreover, executives often dismiss the Expected Revenue report in salesforce as irrelevant or inaccurate.

That’s a pity.

Used correctly, the Expected Revenue report is a realistic forecast of future sales. It’s a sales forecast that stands up to detailed analysis and scrutiny.

But here’s the rub with Expected Revenue.

If the Opportunity Probability is wrong then so is your Expected Revenue forecast.

Unfortunately, the Opportunity Probability IS usually wrong.

It’s wrong because in most salesforce implementations, the probability links directly to the Opportunity Stage. It reflects how far the Opportunity is through the sales process. However, it doesn’t say anything about the chances of winning the deal.

But this relationship can be uncoupled. It’s even possible to set Opportunity Probabilities automatically, based on proven historical evidence.

That way, the Expected Revenue report becomes a realistic revenue forecast and a key sales performance indicator.

That’s the holy grail of sales management.

Expected Revenue Defined

Let’s be clear what we’re talking about here.

Expected Revenue (or Weighted Revenue if you prefer) is the Opportunity Amount multiplied by the Probability. That gives a dollar value for each Opportunity.

Add up these dollars for all your open deals and you have the Expected Revenue for each month or quarter.

If you calculate Expected Revenue on a realistic basis, sales manages know where they stand in relation to future sales targets.

That means decisions that drive sales team behavior are better informed.

For example, if the Expected Revenue is higher than the sales target, focus heavily on closing the deals you already have.

Alternatively, if the Expected Revenue is too low, then the sales team must generate more pipeline to meet target.

The Power of Expected Revenue

Many sales managers dismiss Expected Revenue as irrelevant.

That’s because it relies on calculating the weighted value of each Opportunity. Yet the outcome of each deal is a win or a loss. The full value of the Opportunity is won – or nothing is won.

It’s a binary outcome.

But wait a moment.

Let’s say you have a number of deals due to close next month or next quarter. You will win some and lose some.

The problem is you do not know which will be which. Crystal balls are hard to find.

Suppose you knew this information in advance. You would take 100% of the value of those opportunities that you will win. Likewise, you’d take zero value of the deals that will be lost.

But life isn’t like that.

Other than gut feel, you don’t know which will be won.

However, creating a forecast based on Expected Revenue is the way round that. The catch is it relies on setting a realistic probability for each opportunity.

The Problem with Opportunity Probability

The Opportunity Probability is wrong on many deals because it links only to the Opportunity Stage.

If the Stage moves forward, the Probability automatically increases. That happens irrespective of whether your chance of winning the deal has increased.

For example, let’s say four similar companies are pitching for a deal. They all have an Opportunity Stage called Needs Analysis. And let’s say they all have the Opportunity at 25% Probability.

All four sales teams submit their proposals. They all move the Stage onto Proposal Submitted – which for each company, has an Opportunity Probability of 30%.

All other things being equal, the individual chance of any one sales team winning the deal has not changed. There are four of them left. So each one has a 25% chance of winning.

In fact, it’s probably less than 25% because the prospect may decide not to proceed with any purchase.

However, the total Expected Revenue for each individual Opportunity has increased. Indeed, across the four combined companies, the total probability is 120%.

That clearly doesn’t make sense.

It means that a reliable Expected Revenue forecast needs a better way to estimate opportunity probability.

The Probability of Winning a Deal

For any one company, the Probability of successfully closing an Opportunity is dependent on many factors.

These might include geographic sector, product category, tender versus pitch deal and so on.

For our purposes, let’s consider two factors that apply to many businesses:

  • New or existing customer. Usually the chance of winning a deal is significantly higher with an existing customer compared to a new prospect.
  • The effectiveness of the sales person. Some sales people consistently close more deals compared to the rest of the team.

This where we need to consider history.

In financial services, there’s usually a warning that past performance is not an indicator of future returns.

With sales teams, it’s different. Past performance is an excellent indicator of future returns. We can use that to our advantage.

By extrapolating the Opportunity Probability from similar historic deals, it’s possible to forecast the future. It’s possible to confidently predict Expected Revenue.

Historic Opportunity Conversion Rates

We have implemented functionality for our customers to gather data on historic opportunity probabilities and conversion rates.

New versus Existing Customer conversion rates

Look at the report and dashboard table below.

It shows the difference in opportunity conversion rates between new and existing customers.

Report and dashboard chart compares the difference in opportunity conversion rates between new and existing customers.

The report and chart tells us about conversion rates for existing versus new customers. For example:

  • 41% of all Opportunities with existing customers were successfully won, compared to 34% for new customers. See the “1. Prospecting” row in the report.
  • 58% of Opportunities with existing customers that entered the “2. Investigation” Stage were won. This compares with 53% of Opportunities that entered the same Stage for new customers.
  • 76% of Opportunities with existing customers that entered the “3. Proposal Made” Stage were successfully won. This compares with 65% of Opportunities that entered this Stage for new customers.
  • 92% of Opportunities with existing customers that entered the “4. Negotiation” Stage were won. This compares with 79% of Opportunities that entered this Stage for new customers.

In other words, the report provides the information we need to differentiate Opportunity Probability between new and existing customers.

This is the starting point for more accurate Expected Revenue forecasts.

Sales person conversion rates

Now, let’s consider the difference in opportunity conversion rates between sales people.

Compare the difference in conversion rates between salespeople.

The report shows that Dave Apthorp wins 60% of all his Opportunities compared to 27% for Peter Hemsworth and 36% for Shaun Yates. This is shown in the “1 Prospecting” row.

Look at other rows in the report. They tell us the Opportunity Conversion rate that for Opportunities that move into each Opportunity Stage.

For example, of all the deals that enter the “4 Negotiation” Stage, Dave successfully closes 90% compared to 78% for Peter and 86% for Shaun.

Accurate Expected Revenue

Our customers use the information in these reports to calculate Expected Revenue accurately.

To do this we need a custom Opportunity Probability field.

The field populates by a formula, based on the information we garnered from the conversion reports.

Let’s take an example.

Here’s an Opportunity for £15,000 with a New Customer. It’s in the Investigation Stage.

Based on the standard method, the Opportunity Probability is 25% and the Expected Revenue £3,750.

Expected Revenue using standard approach.

However, we know from our reports that 47% of Opportunities with new customers that enter the Investigation Stage are successfully closed.

That figure automatically enters our custom Opportunity Probability field. Now the Expected Revenue becomes £7050.

Expected revenue with probability adjusted for new customer.

Alternatively, let’s consider what happens if this Opportunity is for an existing customer.

We know that 58% of all Opportunities with existing customers that enter the Investigation Stage close successfully.

Therefore, that figure automatically enters our custom Opportunity Probability field. This time the Expected Revenue is £8,700.

Expected Revenue adjusted for existing customer.

In other words, a realistic Opportunity Probability, based on historic conversion rates, automatically populates for each opportunity.

This, in turn, provides a more realistic (and in this case higher) Expected Revenue.

Accurate Expected Revenue Forecasts

Expected Revenue calculates by multiplying the opportunity probability by the value of the deal.

The problem is that our probabilities link directly to the Opportunity Stage.

However, if we use historical facts it’s different.

We know that 58% of Opportunities with existing customers that enter the Investigation Stage close successfully.  We know that Dave Apthorp successfully closes 60% of all his Opportunities, compared to 36% for Shaun Yates.

Now we can use these facts to set realistic Opportunity Probabilities and drive accurate Expected Revenue reports.

And accurate Expected Revenue reports mean accurate sales forecasts.

To find out more about how to create an accurate sales forecast using Expected Revenue in your business, simply get in touch.

Related Blog Posts

Why You Need To Compare Average Closed Won Opportunity Size
How to use opportunity conversion reports for superior results
How To Stop ‘Closed Lost’ Screwing Up Salesforce Dashboards
5 Easy Tips That Will Make Opportunity Probability Your Trusted Friend

How To Track Revenue Over Time In Salesforce

How To Track Revenue Over Time In Salesforce

Many businesses need to track revenue over time in salesforce.

For example:

  • Capital equipment items that the customer draws down or pays for over time.
  • Professional services to deliver projects over time.
  • Maintenance contracts in which revenue spans 12, 24 or 36 months.
  • Software-as-a-Service (Saas) licenses on fixed term or open-ended contracts.
  • Transactional items in which you anticipate the customer will buy a significant volume over goods every month, but with no guaranteed amount.

Do any of these apply to you? Perhaps several do.

It’s common for businesses to have a mix of different revenue streams over time on the same opportunity, some managed by framework agreements.

Unfortunately, many companies do one of two things when it comes to tracking revenue over time in salesforce.

The first is they perform this critical activity outside salesforce. They perceive it’s simply too difficult to do in the system.

This means those companies lose valuable visibility of committed and scheduled revenue. This impacts account management, business development, target tracking, revenue forecasting and performance management.

Alternatively, they add numerous fields to the opportunity. These fields capture revenue for Q1, Q2 and so on for each year.

Unfortunately, it’s virtually impossible to produce meaningful reports this way. It also results in one heck of a mess on the page layout.

There’s no need to take either of these routes.

It’s perfectly possible to track revenue over time in salesforce. The result is a significant increase in the benefits you generate from your salesforce licenses.

Two ways to track revenue over time in salesforce

Essentially, there are two options.

Option 1 is to use the standard product schedules feature in salesforce. This works well for many businesses. However, there are significant limitations, which we’ll explain.

Option 2 is to use a custom schedule solution. This solves the limitations of the standard schedule functionality. It’s a dynamic and powerful approach to tracking revenue over time in salesforce that is already benefiting many of our customers.

So let’s start with the standard approach.

Option 1 – Standard product schedules

Here’s how the standard product schedule feature works in salesforce.

The salesperson adds one or more Products to an Opportunity in the normal way.

The salesperson then creates a Schedule for each line item. They do this by clicking on the product line item on the opportunity, then on the Establish button.

This provides the page to enter the details about the schedule for that product on the opportunity.

This generates the product schedule that tracks revenue over time for the first product.

The salesperson repeats the process for any other products on the opportunity.

Advantages of standard product schedules

  • It’s standard functionality with no need to purchase separate app or salesforce.
  • Reports and dashboard chart can track revenue over time using standard product schedules.

Disadvantages of standard product schedules

  • The user interface is cumbersome. For example, the salesperson must drill down to each product line item in order to create the schedule.
  • If the opportunity close date changes, the schedules do not automatically shift. However, you can solve this problem with our Schedule Shifter app.
  • It’s impossible to customize or adapt the standard schedules. For example, you cannot add a Status field to track Booked, Shipped, Invoiced, Paid values. You also cannot schedule by margin or other values.
  • There’s no ability track committed and pipeline revenue over time against current and future targets.

The standard approach is appropriate if you normally have only one product per opportunity and you want an out-of-the-box way to track revenue over time.

Option 2 – Custom Schedules

A custom schedule approach overcomes the limitations of the standard product schedule feature.

Tracking revenue over time in salesforce using custom schedules means you can:

  • Forecast both committed and pipeline revenue over time.
  • Compare revenue over time in salesforce with targets.
  • Update revenue you previously forecasted based on ‘actuals’.
  • Adjust forecasts of future revenue based on current expectations.
  • Analyse revenue over time by product category, territory and other parameters.

Your system administrator can build the custom schedule solution, alternatively or you can use the pre-built GSP Custom Schedule app. We’ll demonstrate how the app works here.

When the salesperson adds one or more products to the opportunity then several additional fields are available.

For each product, these fields define:

  • The method of scheduling the revenue over time. More on this below.
  • The start date when the revenue over time will begin.
  • The number of months for the revenue over time.

Clicking Save simultaneously adds the products to the opportunity AND the associated revenue schedules.

At any time, salespeople can use the Edit Line Item Schedules button to return modify the schedules and change the way salesforce tracks the revenue over time.

Close Date changes

If the opportunity close date changes at any point, then the custom schedules automatically adjust by the same number of days.

For example, if the opportunity close date moves by 20 days then all schedules that track revenue over time also shift by 20 days. This avoids salespeople continuously re-aligning schedules and maintains the accuracy of revenue forecasts.

Track revenue over time in reports and dashboards

Additional information is stored on the schedule including product, margin details and ‘actuals’. This information is available for reports and dashboards.

Track revenue over time against Target

Each custom schedule links automatically to a Target record. This means salespeople and managers can immediately assess whether there is sufficient committed and scheduled revenue over time to meet quota.

Straight-line and S-curve revenue forecast

It’s easy to understand why you want to schedule revenue over time in salesforce using a straight line.

Service contracts, maintenance agreements, repayments on capital goods, Saas licenses – they all need the ability to track revenue over time in a straight line.

However, project work is often different. For example, frequently you have a period of mobilization in the early stages. Then you get into the heavy lifting of the project. Finally a period of testing and commissioning in which the revenue tails off.

An s-curve therefore accurately tracks the revenue on month projects. With the GSP Custom Schedule App, simply select the S-curve option in defining the schedule. The app automatically schedules revenue over time in an S-curve profile.

Advantages of standard product schedules

  • Easy for salespeople to us.
  • Flexibility to define different revenue profiles over time for each opportunity product.
  • Forecast accuracy is maintained because schedules automatically shift when the close date changes.
  • Track additional information over time including margin and actuals.
  • Track pipeline and committed revenue over time in salesforce.

Disadvantages of standard product schedules

  • Requires more setup than the standard product schedule feature (although our app takes care of this).

Many business already track revenue over time salesforce. Don’t hesitate to get in touch if you need our help in becoming one of them.

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How To Make Your CRM Project A Success

How To Make Your CRM Project A Success

There’s no shortage of advice if you Google ‘CRM project success’.

Set clear goals. Align the CRM project with your business strategy. Get executive buy-in. Manage stakeholders. Clean up data. Deliver training – lots of it.

I don’t disagree.

Yet I find there is a problem.

This advice is too generic.

These factors will influence the success of any business project. There’s nothing that applies specifically to CRM projects.

Do all of these things and your CRM project might still fail.

We are after something different.

We need the critical factors that deliver CRM project success. The drivers that apply specifically to CRM projects. The things that, if you don’t do them, mean that your CRM project is likely to fail.

For that, you need to look deeper.

10 Specific Drivers Of CRM Project Success

Here they are. Based on my experience of hundreds of implementations – the specific drivers of CRM project success.

Not every driver will apply equally to every CRM project. Use your judgement. However, they do apply equally to new CRM project implementations AND benefit expansion in existing systems.

1. Re-design your Lead to Opportunity process successfully

CRM project success demands that business processes are re-designed.

Nowhere is this more important than the Lead to Opportunity process.

Unfortunately, no business process re-design effort results in more confusion, ambiguity and CRM project failure.

This process goes to the heart of CRM project implementation.

Lead-to-Opportunity represents the critical set of activities that develop good quality, sales-ready leads. This puts them in the hands of people that can execute the sales process.

However, to achieve CRM project success, there are key areas to pay attention to when re-designing your Lead to Opportunity process.

  • Do not transfer leads to salespeople too early. Salespeople will quickly start to ignore what they perceive to be poor quality leads.
  • Convert each Lead to an Account, Contact and Opportunity before transferring it to a salesperson. This is critical for accurate Campaign ROI metrics.
  • Create separate pipeline reports and dashboard charts for early-stage opportunities. If appropriate, exclude these initial opportunities from core pipeline reports.
  • Educate salespeople and managers that it is acceptable to qualify-out early stage opportunities. If you are going to lose, lose early.
  • Create a feedback mechanism from Sales to Marketing or Inside Sales. Insist on feedback from every Lead transferred to Sales. Review this feedback regularly to improve lead generation and qualification processes.

The Lead to Opportunity processes often provokes fraught discussion. In effective re-design of this process puts CRM project success at risk. Use these principles to avoid that.

Key resource

 

2. Use this four-step approach to user adoption

If users do not fully engage with your system, then no matter what else happens, your CRM project will not be a success.

Too often, user adoption equates with training. That’s a mistake. Deliver as much training as you like and you still cannot guarantee CRM project success.

Apply four steps to secure full user adoption CRM project success.

  • Create an advantage to using the system. For example, for front-line sales people, it has to be easier to do their jobs using the system, than not using it.
  • Create a disadvantage to not using the system. It has to be easier for sales people to do their jobs using the system that not using it. Conversely, it has to be harder for them if they don’t use it. In other words, continuing to work with current methods has to be more difficult than using the CRM system. This also means all pipeline reviews, 1.1s and team meetings are based on the data in the system, not separately stored on spreadsheets.
  • Measure user adoption. You cannot manage it if you don’t measure it. Collect metrics that measure user adoption in your business. By the way, login frequency isn’t one of them.
  • Proactively manage user adoption. This is why you need the metrics. Make it clear what’s expected. Use your metrics to manage user adoption the way you would for any other topic. Reward and complement people for doing well. Take remedial action with those that fall below standard.

Key resource

 

3. Install the right set of dashboards

Getting visibility of the sales pipeline and sales performance is the number one reason why companies invest in CRM projects.

Yet often, these companies fail to implement the dashboard charts and reports that deliver that visibility.

Sales dashboards must provide three things for CRM project success:

  • Visibility of the size of the pipeline.
  • Information on the trend in the pipeline.
  • Key metrics on the quality of the pipeline.

Without this information, sales managers are flying blind. That’s a guarantee of CRM project failure not success.

Addressing this key issue is relatively easy. Start by installing our free GSP Sales Dashboard from the AppExchange. It’s fully customizable so you can adapt it to the specific needs of your business.

Key resource

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE App from the AppExchange today

4. Train managers how to be a coach not a pundit

During the match, pundits sit in the TV gantry pointing out mistakes. They pore over errors. They point out the reasons for defeat. A critical eye examines performance statistics and metrics.

Coaches – at least good ones – do things differently. They explain how to do things better. They teach techniques that lead to improvement. Coaches recognize and accept that mistakes happen and that these represent learning opportunities.

Having the right set of dashboards is one thing. Knowing how to use them to drive sales performance across the team is another.

CRM project success depends upon sales managers and leaders using dashboards and reports to improve performance. It means each one has to be a coach, not a pundit.

Using dashboards as a pundit means you risk encouraging the very behaviour you want to remove. Sandbagging occurs – deals are left out of the CRM system until the sales person is confident an opportunity can be won. Dormant opportunities remain open. Updating of opportunities takes place only at the last minute.

The result? The real time, robust visibility of the sales pipeline the CRM project can deliver, goes out the window.

Effective sales leaders recognize no single chart gives the complete picture. They understand how to combine information from different dashboards charts to identify specific improvements available to each individual and team.

In many businesses, this will require a change in behavior and education of sales managers.

Do not assume this will happen automatically. In many cases, it won’t. CRM project success depends on training managers how to be coaches not pundits.

Key resource

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE eBook today from our website

5. Start as you mean to go on (avoid a soft launch)

A soft launch means making the system available to users, but not insisting they engage with it to the maximum.

Sometimes a soft launch occurs when the project team believe the system is not fully ready and perfect. They worry about the impact. After all, there is so much else going on in the business.

Don’t let this happen. CRM project success requires a hard launch.

Let’s be clear. In many businesses, a pilot with a specific group of users is a sensible thing to do. It contributes to CRM project success.

Likewise, a phased rollout is also logical. Often you simply cannot physically train all the users in one go. Instead, do it country-by-country or region-by-region. Whatever deployment plan makes sense in your business.

However, as soon as the CRM project goes live, make sure everyone understands the importance of keeping data and records up to date.

For example, one of the biggest sins in pipeline visibility is opportunities with an out of date Close Dates. This distorts the accuracy of future revenue the CRM project aims to deliver.

In the first week, the first month, the first quarter, track down these opportunities. Don’t stand for them being out of date. Zone-in on salespeople that need to update their deals.

Here’s another example. Tracking the buying center on a B2B deal is often critical to success. So in the CRM system, make sure the stakeholders on the customer side are recorded as playing a role on the opportunity.

Here’s the thing. If you tolerate sloppiness in the early days, your business will find it mighty hard to recover the situation.

Instead, make it clear from day 1 what is expected. CRM project success in your business means you start as you mean to go on.

 

6. Include Target Tracking in the solution

Targets are key to salespeople.

There isn’t a salesperson worth her salt that doesn’t measure her performance against target each month or quarter.

Yet very often, sales performance versus target is tracked outside the CRM system. This waters-down the importance and usefulness of the CRM system to salespeople and managers.

Incorporate target tracking directly into your system. It’s a core component of CRM project success.

However, that can be more difficult than it seems.

For example, in salesforce CRM, many businesses find the Forecasts tab difficult to use.

Alternatively, if targets you base targets on scheduled revenue over time, then the target tracking mechanism needs to be more sophisticated.

In both cases, the target tracking mechanism needs to reflect both historical performance and compare future potential revenue against quota. In other words, it must compare pipeline and weighted pipeline with the target for next month or next quarter.

Fortunately, there are ways to do all of these things in salesforce and other CRM systems. Follow our recommended resources below for more information.

Key resources

7. Create a robust, scalable architecture

The best thing about CRM systems such as salesforce is that it’s easy to add a field.

The worst thing about CRM systems such as salesforce is that it’s easy to add a field.

Over-enthusiastic creation of fields and other features quickly swamps salespeople and other users. Be judicious.

Think about it like this. If you are writing a 20-page slide deck, it’s best not to start by typing the first bullet point into slide 1.

Instead, get a sheet of paper and plan your presentation. Start with the end in mind – the key message you intend to deliver. Work backwards, structuring your slides and specific points within this context.

CRM project success requires the same approach. The best starting point for a CRM architecture is not the creation of the first field.

Better by far, to stand in front of a whiteboard with the project team and plan out your architecture. Think about improving your processes. Translate this business architecture into a system design that is robust, scalable and meets the objectives.

One more point on this. When the design of CRM projects goes wrong, it goes wrong at the start.

It may not be immediately obvious, but the underlying architecture of CRM systems like salesforce is logical and robust. Work with this architecture, don’t fight it.

Key resource

If you are in any doubt about how the core architecture of salesforce works then call us. We will jump on a web meeting and I’ll explain it to you.

 

8. Import (reasonably) clean data about at the outset

Your business already has a myriad of data about leads, contacts, customers, prospects, current and past opportunities.

This data may currently be in a legacy CRM system. Perhaps it all currently sits in spreadsheets or Outlook folders.

In either case, for CRM project success, import this data into your new system before you go live. If you leave it until later, it will never happen.

Here are examples of the benefits of importing this data at the outset.

  • User adoption will improve significantly. Salespeople (in particular) and other users will not want to enter data that already exists elsewhere. They will quickly revert to using their existing tools.
  • Productivity and efficiency is increased. For the same reason – manually typing large volumes of data is not a good use of anyone’s time.
  • Realize marketing and customer communication benefits from the outset. No need to wait until there is a critical mass of data.

One other key reason.

This is an excellent opportunity to clean up and consolidate the data. In fact, that’s an imperative before you import the data. The result doesn’t have to be perfect. However, CRM project success demands an intensive effort on data improvement and migration to bring it to an acceptable level.

Key resource

 

9. Use Products (irrespective of what you sell)

This is not an article on CRM features or functionality.

Nevertheless, there’s one feature that successful CRM projects consistently use.

Products.

It doesn’t matter whether you sell physical items, services or something in between. Using the Products feature has multiple benefits. It:

  • Turns bland opportunities into specific deals. This means visibility of the sales pipeline and sales performance is dramatically improved.
  • Improves management reporting and analysis. For example, margin and average deal size analysis.
  • Opens the door to multiple other benefits. For example, discount control, electronic signatures, streamlined fulfilment processes.
  • Increased pricing flexibility. For example, tailor prices to specific customer segments, geographical areas and distribution channels.
  • Improved forecasting of scheduled revenue over time. This means understanding how committed and pipeline scheduled revenue compares to target.

However, Products is also one of the more complex functional areas to set up in CRM systems. That is especially true if you already have an ERP or other back-end system that controls pricing, availability and fulfilment.

Nevertheless, the extensive range of benefits makes it worth it. Successful CRM projects invariably use Products.

Key resource

 

10. Get independent help

You would say this, wouldn’t you, Gary?

Well yes, I would.

I started implementing cloud-based CRM systems in the late ’90s. Just as the concept of business web computing was taking hold.

At that time, CRM systems such as salesforce were simple, uncomplicated. They offered rudimentary sales force automation and customer support features. Businesses implemented them as tactical solutions, to solve specific issues in sales or customer service.

Now things are different.

Today salesforce is gargantuan. There’s a wealth of features. Companies implement CRM for strategic and compelling benefits.

Ironically, that means full benefit realization is harder to achieve. However when you do, the benefits are so much bigger.

To secure those benefits, CRM project success requires independent expertise, experience, advice and guidance.

You’ve read the 10 specific drives of CRM project success. For further advice on how to make your CRM project successful, then please, don’t hesitate to get in touch.

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