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Salesforce Sales Cloud | How To Get Started The Right Way

Salesforce Sales Cloud | How To Get Started The Right Way

Your business needs to get started with the salesforce Sales Cloud the right way for your implementation project to be successful.

Unfortunately, many companies fail to do this.

The biggest single reason?

They set off on the wrong foot.

In other words, they fail to understand the core features and building blocks of the Sales Cloud.

This means they get started with the salesforce Sales Cloud in the wrong way.

Here’s what I commonly see.

Companies:

  • Quickly build custom fields, when standard fields already exist.
  • Store important data in the wrong places.
  • Confuse the purpose of important standard objects.
  • Struggle to produce meaningful reports and dashboards.
  • Suffer low user adoption because salespeople find the system cumbersome to use.

The result is everyone quickly loses enthusiasm. Then they blame the technology.

However, it doesn’t need to be this way.

The salesforce Sales Cloud is a powerful tool for managing the sales pipeline, tracking sales performance and improving salesperson productivity and effectiveness.

It can do these things in your business.

However, before jumping in, it is important to understand the core features and components of the salesforce Sales Cloud.

Fortunately, if that is your goal, you’ve come to the right place.

In this article and the accompanying video, I explain the core components of the salesforce Sales Cloud.

Understand these building blocks and you get started with the Sales Cloud in the right way.

Oh, by the way:

I also include links to multiple free resources to get you started with the salesforce Sales Cloud to gain early success!

 

The Salesforce Sales Cloud explained

The salesforce Sales Cloud enables sales teams and executives to proactively manage their sales pipeline and increase the productivity of salespeople.

It does this by providing a collection of components that store data about each aspect of the sales process.

For example, Accounts store information about customers and prospects. Contacts store data on people that work at those Accounts. Opportunities store data about each individual sales deal.

Reports and dashboard charts mean that managers and salespeople have visibility over the size, trend and quality of the pipeline and funnel.

These reports and dashboards also help identify training and coaching opportunities by analysing historic sales performance and providing forward-looking metrics.

When well configured, tools and features within the Sales Cloud increase the efficiency and effectiveness of salespeople.

These tools include workflow and approval processes. There are also third party applications such as integrated electronic signatures on sales contracts that can boost salesperson productivity further.

 

Get started the salesforce Sales Cloud

Let’s move onto how the key features and components of the Sales Cloud.

Make sure you understand these essential features and components before you jump in and start configuring the Sales Cloud in your business.

This is essential if you want to get started with the Sales Cloud in the right way. Then follow these 10 tips for salesforce project success.

 

Accounts

Let’s start with Accounts.

Accounts are organizations in salesforce. Typically, that means customers and prospects.

However, Accounts can also be other types of organization such as suppliers, consultants and partners.

Accounts are usually customers and prospects, but they can also be other types of organization such as suppliers, consultants and partners..

Use the standard Type field on the Account to identify these different organizations in your salesforce environment.

You can also record the hierarchical – or parent / child – relationship between Accounts in the same business group.

 

Contacts

Accounts have Contacts. Contacts are people that work at those Accounts.

One Account can have many Contacts. However, each Contact links directly to only one Account.

 

Opportunities

Accounts also have Opportunities. Opportunities are the most important feature of the salesforce sales cloud.

Opportunities are sales deals. One Account might have none, one or many Opportunities over time.

We can also record the relationship between Contacts and specific Opportunities using Contact Roles.

This means, for example, we can identify customer roles in the buying process such as Gatekeeper, Influencer, Decision Maker and Buyer.

 

Key Opportunity Information

Let’s talk more about Opportunities.

There might be lots of information specific to your business that you want to record about each opportunity.

However, every opportunity needs three key pieces of information. These are the Opportunity Stage, Close Date and Amount.

Here are these three fields in the salesforce Classic user interface.

Stage, Close Date and Amount displayed in the Classic salesforce user interface.

 

 

Here are the same three Opportunity fields in the salesforce Lightning interface.

Stage, Close Date and Amount displayed in the Lightning salesforce user interface.

 

Make sure you understand the crucial role of the Opportunity Stage, Close Date and Amount fields on the opportunity when you get started with the Sales Cloud.

1. Opportunity Stage

The Opportunity Stage is a picklist. It records where the opportunity is in your sales process at any point in time.

The standard picklist values for the Opportunity Stage are not ideally suited to many businesses. That’s why you will probably want to customize them.

For example, many of our customers use these Opportunity Stages: Prospecting, Investigation, Proposal Made, Negotiation, Closed Won and Closed Lost.

Either way, think carefully to avoid these three common mistakes with opportunity stages.

 

2. Opportunity Close Date

The second essential piece of opportunity information is the Close Date.

The salesperson uses the Close Date to forecast when the deal will complete. This date may change from one month to another as your sales deal progresses.

Tracking the number of times the Close Date changes is an important pipeline quality metric.

 

3. Opportunity Amount

The Opportunity Amount is the revenue associated with the opportunity. In other words, the sales value.

Where does that Amount come from?

There are two ways to enter the Opportunity Amount in salesforce.

The first is to simply type the value into the Amount field.

However, the second way is much better. That way is to use Products.

 

10 Tips For Salesforce Sales Cloud Implementation

Download our free guide today

Products

Products are the goods and services that you sell using Opportunities.

Remember, Products can be physical things.

However, Products can also be intangible items such as subscriptions or fees. Or services that you deliver through people.

In fact, a Product in salesforce is anything that generates revenue for your business.

When you add Products to an opportunity, the total value of these products becomes the Amount on the opportunity.

Using Products means the opportunity more accurately reflects the specific goods and services sold to the customer.

In turn, this means pipeline and sales performance dashboard charts are more useful in decision making about sales strategies and tactics.

 

Dashboards

Now that we have these three pieces of information – the Opportunity Stage, Close date and Amount – we can start to analyse the sales pipeline.

Dashboard charts are a powerful way to do this.

For example, using our three pieces of opportunity information, we can understand the size of the pipeline due to close each month.

In the salesforce Sales Cloud, dashboards are a powerful way to view the Stage, Close Date and Amount.

Within each month, we can analyse the pipeline each month.

Dashboards deliver great visibility of the sales pipeline and sales performance.

You can kick-start the use of dashboards in your business in two ways.

First, study this blog post, 12 Must-Have Sales Dashboard Charts. The post explains the critical dashboard charts that executives need to manage the sales pipeline effectively.

There’s even an accompanying eBook you can download.

Second, install our free GSP Sales Dashboard from the AppExchange. This dashboard contains all the charts explained in the blog post and eBook.

Together, they represent a comprehensive resource to improve visibility of the sales pipeline and sales performance in your business.

 

Campaigns

Campaigns are another key feature of the Sales Cloud.

Campaigns are marketing activities such as trade shows, adverts, emails and web forms.

A key purpose of Campaigns is to create new Leads.

 

Leads

Leads are people in the very earliest stage of the sales cycle.

Often we have very little information about each Lead. To increase this information, many businesses use marketing automation applications such as Pardot and Marketo.

These applications integrate tightly with salesforce and allow you to create email nurture programs that deepen and extend the relationship with Leads over time.

It is important you understand the difference between a Lead and an Opportunity when you get started with the Sales Cloud.

 

What happens when contacting a Lead

Suppose someone in your business telephones one of these Leads and has a conversation.

One of three things is going to happen.

First, you might find the Leads isn’t a prospective customer at all. Therefore, you update the Lead Status to Closed, and take no further action.

Secondly, the Lead is a definite maybe!

In other words, the person is interested, but not ready yet to speak to a salesperson.

This time, you update the Lead Status to Contacted. You might also record a follow up activity to contact the Lead again in the future.

The third thing that can happen is you decide the Lead is qualified. In other words, the person is ready to engage with you from a sales perspective.

Here’s what you do:

Convert the Lead into, an Account, a Contact and an Opportunity.

Now you have a new Account, Contact and Opportunity.

 

Marketing Metrics

Here’s the beauty of the lead conversion process:

When you convert a Lead in the salesforce Sales Cloud, the resulting opportunity links back to the Campaign.

This means you automatically calculate the return on investment (ROI) of your marketing campaigns.

Of course, dashboards are a great way to analyse sales performance and the sales pipeline by marketing campaign.

To get started with marketing metrics, install the free GSP Lead Conversion Dashboard into your salesforce environment.

 

More great salesforce Sales Cloud resources

This is a high level, overview of the salesforce sales cloud. However, you get started with the Sales Cloud on the right foot if you understand these key building blocks.

We have many great articles on our salesforce blog that explain how to maximize sales cloud benefits. Above all, don’t forget to download our 10 Specific Tips for Successful Sales Cloud Implementation at the foot of this post.

Here are some of my favourites:

We also have free dashboards on the AppExchange, including:

In addition, simply get in touch to find out how we can help make your salesforce sales cloud project a tremendous success.

 

10 Specific Tips For Successful Salesforce Sales Cloud Implementation

An extra bonus! Download our 10 page PDF with specific, tips for successful Sales Cloud implementation. Contains detailed advice for maximizing benefits from the salesforce Sales Cloud.

To Exceed Year-End Quota, Apply These Q4 Sales Strategies Now

To Exceed Year-End Quota, Apply These Q4 Sales Strategies Now

It’s that time of year.

Q4.

When sales teams around the world are under pressure to get deals closed to meet year-end quotas.

I have worked with many companies in that situation.

And here’s what I’ve found:

The most successful executives apply five Q4 sales strategies.

Q4 Sales Strategies Package Just $1,800* 

16 hours consultancy including:

• Dashboards and configuration specific to Q4

• Help with cleaning up out-of-date opportunities

• Recommendations on salesforce benefit quick-wins

*subject to confirmation of scope.

Q4 Sales Strategies

These sales strategies do not guarantee they hit quota. However, they do put these executives and the sales teams in with the best possible chance of success.

Here are the five Q4 Sales Strategies they use:

  1. Sort the wheat from the chaff.
  2. Determine whether there is enough pipeline to hit quota.
  3. Prioritize time and energy on high impact deals.
  4. Create a close plan for each high priority opportunity.
  5. Protect themselves against margin-eating discounts.

So here they are:

Five Q4 sales strategies you can apply right now to achieve year-end quota.

1. Sort the wheat from the chaff

Here’s the first Q4 sales strategy these executives apply.

They weed out deals that with the best will in the world are not going to close successfully in Q4.

It’s February 2017.

Sarah Jones is under pressure to boost her sales pipeline.

The pressure is coming from the VP of Sales. “Come on, Sarah, you’ve got lots of potential in that territory of yours. Let’s ramp up the pipeline.”

You can’t blame him.

The Board set aggressive growth targets for the year and expect the VP of Sales to deliver.

Sarah works through her Accounts.

She picks a prospect with whom she had a meeting three months ago. “I reckon there’s a decent chance with this one,” she thinks.

Sarah creates an opportunity in salesforce.

“It’s bound to close sometime this year,” she says to herself hopefully.

Of course, Sarah doesn’t want to put herself under any unnecessary time pressure. That means she enters the Close Date as December 31, 2017.

The pipeline has increased. Job done.

That scenario plays out in companies around the world.

There are three ways to sort the wheat from the chaff with Q4 deals.

a) Review Opportunity Stages and Get Real

In Sarah’s company, here’s what the pipeline looks like by the time we reach mid-Q4.

There's often a surge of deals due to close in December when we look at the pipeline in Q4.

There’s a surge of deals due to close in December.

But how realistic are these opportunities?

For example, if the sales cycle is typically three months, then are the deals in the prospecting and investigation stages of the sales pipeline realistically going to close in Q4?

In other words, the first step is to review deals by Stage and Close Date. Remove dormant deals from the pipeline. Move deals that still have legs, but realistically won’t close in Q4, to a later date.

b) Review Opportunities by Created Date

Here’s another way to assess the strength of the Q4 pipeline.

Look at deals due to close in Q4 by Created Date.

If the sales cycle is 3 months, carefully examine deals that have been open substantially longer as part of your Q4 sales strategies.

Again, if the sales cycle is 3 months, carefully examine deals that have been open substantially longer.

Shake them out of the tree if they’re unlikely to close this quarter.

c) Analyse Pipeline Quality Metrics

In addition to the age, two other deal metrics provide insight on pipeline quality.

  • Number of Close Date month extensions.
  • Days since last Stage change.

This dashboard table highlights these quality metrics for deals due to close in Q4.

This dashboard table highlights these quality metrics for deals due to close in Q4.

We can see, for example, the Oxted Manufacturing opportunity has been open 237 days, the Opportunity Stage was last updated 100 days ago and the Close Date has moved four times from one month to another.

I don’t know about you, but those figures do not give me a great deal of confidence that the deal will close in Q4.

So that’s the first of the Q4 sales strategies:

Sort the wheat from the chaff.

Doing this will help hugely in subsequent recommendations.

By the way, an easy way to obtain these reports is to download the free GSP Sales Dashboard if you are not already using it.

 

2. Determine whether there is enough pipeline to hit quota

This Q4 sales strategy recommendation is critical.

The answer to the question of whether you have sufficient pipeline to hit quote is a major influence on your Q4 sales strategy.

But first:

How do we know if the pipeline is big enough?

One option is to take the deals you have already won and add the full sales value of the pipeline.

That’s likely to give you a positive feeling. The two added together will likely exceed target.

Unfortunately, it’s not realistic. I doubt you are going to win 100% of your sales pipeline.

A more pragmatic way is to set a realistic probability of winning each deal. Then use this to calculate the Expected Revenue of the pipeline.

Remember, in salesforce you do not have to accept the default probability associated with each Stage. Modify these probabilities on individual opportunities.

An essential Q4 sales strategy is to determine whether you have enough pipeline to meet year-end target.

Then, to determine whether you have enough pipeline to hit Q4 target, create a report based on Expected Revenue. Include both Closed Won and pipeline deals.

Compare the total value in the report with your target.

Now you have a choice:

  • If the Expected Revenue exceeds target, focus on closing the deals you already have.
  • If the Expected Revenue is smaller than your target, you need to decide if it is realistic to increase the pipeline with deals that will close in Q4.

Q4 sales strategies are influenced by whether there is enough funnel to meet quota.

It may not be easy to find deals that realistically will close in Q4.

The circumstances will be different for every business. However,

  • Are there existing customers to whom repeat sales are possible?
  • What about upgrades?
  • Can you make cross sales to customers that bought certain products?

Only you know the answer to these questions.

However, in my experience, it’s a mistake to seek-out new pipeline with smaller prospects.  Often, there’s an assumption these lower value deals will close more quickly.

However, it often takes as long to close a smaller customer opportunity because the relative importance of the deal is greater.

Ideally, don’t leave it until the very end of the year or Q4 to measure pipeline against target.

The GSP Target Tracker is a powerful way to compare won and pipeline deals with target throughout the year. For each month and quarter, it gives a clear indication of whether you have sufficient weighted pipeline to achieve quota.

 

3. Prioritize time on high impact deals

The third of the Q4 sales strategies sounds obvious:

Focus time, resources and energy on opportunities that make the most significant contribution to quota.

However, there are three dimensions to prioritizing Q4 opportunities:

  • The sales value of the deal.
  • The probability of winning the deal, and
  • Whether multiple small opportunities can combine into one larger deal.

You can prioritize on the first two dimensions by creating a report that lists the opportunities by Stage, Amount and Probability:

You may also want to adapt the report to show the pipeline by customer type.

As part of your Q4 sales strategy, prioritize opportunities by stage, amount, probability and customer type.

This helps you prioritize deals with existing customers that despite their Stage may have a higher probability of a successful outcome.

Consider also, whether there are Accounts with multiple opportunities.

In the GSP Sales Dashboard, we include a table and report that shows the pipeline by Account.

In the GSP Sales Dashboard, we include a table and report that shows the pipeline by Account.

In the GSP Sales Dashboard, we include a table and report that shows the pipeline by Account.

In this example, High Hill Estates has opportunities due to close in Q1 AND Q2. Is it possible to amalgamate these deals into one larger opportunity, with a successful close in Q4?

Easily identify the deals you and your team will focus on using a separate field “Q4 Focus” field.

As part of your Q4 sales strategy, focus on deals that will have a high impact on year-end revenue.

Having done this analysis, the goal now is to stick to your higher priority deals. Don’t get distracted!

4. Create a Close Plan for each high priority opportunity

Many businesses will create a Close Plan for important deals.

The Q4 sales strategy brings this to a head.

However, there’s no need to overdo it.

Create the close plan using a simple rich text field on the Opportunity.

Alternatively, enter it into the Chatter feed for each Opportunity.

This is the approach used by many of our customers has the advantage that managers, colleagues and other internal stakeholders can comment and collaborate on the close plan.

Here’s another common element of this Q4 Sales Strategy:

Agree a Go / No Go Date with the customer.

This is not the date you expect the deal to close. Nor is it a commitment by the customer that you will win the deal.

Rather, it is the deadline date by which you and the customer will aim to close the deal. One way or the other.

This date for example, might be 15th December.

The outcome may be a win or a loss, we don’t yet know. The Go / No Go date is the point at which you both agree the deal cannot be closed in Q4 and you will instead revisit the opportunity in the New Year.

In salesforce, record these dates in a custom field. Track them through a report and Q4 dashboard chart.

The previous Q4 sales strategies are about identifying realistic deals, prioritizing effort and achieving a successful outcome.

The final Q4 sales strategy takes a different approach.

 

5. Protect yourself against damaging discounts

We all know discounts and volume related deals are sacrificed in return for Q4 close dates.

Indeed, many companies have inadvertently trained their customers to leave purchases to the end of each quarter.

However, this Q4 sales strategy is to keep track of the rationale for each discount and give-away.

For example, you give a discount or preferential terms because the customer agrees to buy 100 units over three months (e.g. in a framework agreement).

Keep a record of the rationale for the discount or special terms.

That’s because, let’s say, it turns out the customer only ever orders 80 or 90 units.

You won’t always go back and negotiate a retrospective price increase. However, this information is invaluable when negotiating future discounts.

Use this information now when the customer is putting you under pressure on a Q4 close.

Look back over historic deals. Did the customer fulfil their side of the bargain? If not, use this information to strengthen your negotiating hand.

The Chatter feed on each opportunity is a good place to record the rationale for discounts and other terms given away in return for customer commitments.

That’s the fifth of the Q4 sales strategies that successful executives apply:

Keep track of the rationale behind the agreement and make it easy to find when you are under pressure.

Our blog post, 10 Expert Tips To Improving Discount Control gives more advice on avoiding unnecessary give-aways.

If you think others will benefit from reading this blog, please share on LinkedIn or Twitter.

Getting Started With The GSP Sales Dashboard

The GSP Sales Dashboard contains the core set of dashboard charts and underlying reports that give executives great visibility of the sales pipeline and sales performance.

System administrators around the world have installed the dashboard over 500 times.

The blog post explains the simple getting started instructions for the GSP Sales Dashboard. Follow these simple steps to maximize your sales visibility using the Dashboard.

Step 1: Select the correct GSP Sales Dashboard version

The GSP Sales Dashboard comes in two flavours: the version for Enterprise Edition and above and an alternative version for Professional Edition.

The only difference between the two is the Short Term Pipeline Trend Chart.

The short term pipeline trend report requires historical trending to be enabled in salesforce.

The report for this chart uses a feature called Historical Trending. This feature is only available in Enterprise Edition and above.

Therefore, the first step is to select the correct version of the dashboard: Enterprise or Professional Edition.

Step 2: Enable Historical Trending

The step applies only if you are installing the Enterprise Edition of the GSP Sales Dashboard.

The Historical Trending feature must be enabled to install the dashboard successfully. If you get this error message when installing the GSP Sales Dashboard then Historical Trending is not enabled in your salesforce environment.

This error message when installing the GSP Sales Dashboard means historical trending is not enabled.

Fortunately its simple to enable Historical Trending.

1. Go to Setup.

2. In the Setup search box, type Historical.

3. Click on Historical Trending.

Search for historical trending in setup.

 

4. Select Opportunity. Check the box marked Enable Historical Trending and Click Save.Check the box to enable historical trending in salesforce.

You are now good to install the Enterprise version of the GSP Sales Dashboard.

For more instructions on the dashboard installation process, including enabling Historical Trending, play this video.

 

 

Step 3: Set the Close Date Change Counters

One of the most powerful features of the GSP Dashboard is the table that tracks the number of Close Date month extensions.

The table shows deals that are due to close this month.

salesforce dashboard chart that shows pipeline quality metrics such as the number of close date extensions.

The table presents the Opportunity Name along with three pipeline quality metrics:

  • Number of Close Date month extensions (the number of times the Close Date has moved from one month to another)
  • Number of days since the last Stage change, and
  • The Age of the opportunity.

3 Killer Pipeline Quality Metrics That Highlight When To Be Sceptical gives great advice on how to use this information to get more accurate sales forecasts.

After you have installed the dashboard, the table will track these metrics for all new opportunities created from this point forward.

However, with a few simple steps you can also get the metrics to track existing opportunities.

This short video shows exactly what you need to do.

Additional Resources

12 Must-Have Charts Blog Post

The 12 Must-Have Charts Blog Post is a comprehensive resource that explains how to use each of the dashboard charts to boost pipeline visibility.

The also contains links to additional videos and articles that provide even more details

12 Must-Have Charts eBook

Download our eBook to read about our commentary on each of the charts. Contains examples of how to use each chart for sales performance visibility.

GSP Salesforce Apps

We have a range of apps that extend salesforce functionality in key areas.

These include:

Salesforce Implementation Services

We have a range of implementation services that can help you maximize your benefits from salesforce.

Simply get in touch to find out how we can help you.

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.

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE eBook today from our website

 

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.

Webinar | Power Metrics For Lead Conversion Success

Webinar | Power Metrics For Lead Conversion Success

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

We promise you 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

We will demonstrate how to:

• Implement a robust lead management process.
• Measure the revenue contribution of converted leads.
• Track key metrics to improve lead performance.
• Compare win rates on opportunities created from converted leads.
• 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 also, 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.

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

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.

Want to create these dashboard charts in your business. Easy.

Simply install the free Lead Conversion Dashboard From GSP directly from the AppExchange.

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

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.

To create the charts described in this blog post, simply download the free Lead Conversion Dashboard From GSP from the AppExchange.

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.

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.

Install the Lead Conversion Dashboard From GSP for free from the AppExchange.

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.

Lead Conversion Metrics Webinar Recording

Watch this video with myself and Dan Bailey to see the lead conversion metrics in action. Dan and I also discuss best practices for converting leads and methods for getting feedback from sales to improve alignment with marketing.

 

GSP Lead Conversion Dashboard

To implement the dashboard charts and underlying reports described in this video and the webinar recording, simply install the free Lead Conversion Dashboard from the AppExchange.

There are some simple actions to activate the dashboard after you have installed it. Follow the step-by-step instructions in one of these videos to get this powerful dashboard working for you in your business:

Getting Started with Lightning Setup.

Getting Started with Classic Setup.

And, of course, if you have any questions or need advice then Get In Touch. Without doubt, we’ll help you out.

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.

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