+44 203 280 3665
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.

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.

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

Top 5 Usual Suspects – Opportunity Mistakes In Salesforce That Are Easy To Fix

Top 5 Usual Suspects – Opportunity Mistakes In Salesforce That Are Easy To Fix

I have reviewed hundreds of existing salesforce implementations.

And seen many mistakes.

But there are five opportunity mistakes that jump out all the time.

They are the usual suspects.

Yet the thing about them is, they are easy to fix.

Addressing each opportunity mistake alone, will:

  • Make salesforce easier to use. That improves user adoption.
  • Improve reports and dashboards. That improves pipeline management.
  • Enable more robust opportunity management. That increases win rates.

So here they are. The usual suspects. And here is how you fix these common salesforce opportunity mistakes.

Opportunity Mistake #1 – Badly designed Opportunity Stages

The standard opportunity stages in salesforce do not fit well with the sales process in many businesses.

So it is perfectly sensible to change them. But sorry to say, businesses often do it badly.

Here are the most common mistakes with Opportunity Stages.

  • Too many stages. This happens when the sales cycle is broken into a too granular series of stages. This makes it difficult to make sense of pipeline dashboard charts and reports.
  • Ambiguous stages. When opportunity stages are unclear, salespeople will not be able to update the opportunity accurately. The result is managers cannot assess the sales pipeline with any confidence.
  • Stages as milestones. This happens when stages represent a specific milestone or task (e.g. Meeting Booked, Proposal Sent). It is difficult to define a sales process or get a sense of what is happening on the Opportunity over time when this happens.

For example, here’s a real-life example. It’s a dashboard chart taken from a salesforce environment that had way too many opportunity stages.

Example of a dashboard chart taken from a salesforce environment that had too many opportunity stages.

To fix this opportunity mistake, take these actions:

  • Consolidate stages. Combine two or more existing stages into a single opportunity stage. Update existing opportunities to reflect the new value.
  • Define stages carefully. Think-through the opportunity stages and their definition. Have someone not involved directly in sales, review and challenge your stage definitions.

Here is another blog post I wrote specifically about opportunity stages. It contains additional advice on setting opportunity stage values.

3 Common Mistakes With Opportunity Stages And How To Fix Them.

Opportunity Mistake #2 – Not Using Opportunity Products

Earlier this week I reviewed an existing salesforce environment for a potential customer.

They were making the opportunity mistake common to many companies. Multiple ‘amount’ fields on the opportunity. In fact, they had created 24 fields. All to capture information about the different products and over-time revenue streams associated with an opportunity.

The page layouts are highly confusing. User adoption is a problem. And the reports are a nightmare – too complicated, no workable information.

However, it is a common opportunity mistake.

The solution is to use Opportunity Products. (In some cases, use Product Schedules as well).

Virtually every company that has salesforce should use Products (even Service companies).

A Product, in this context, can be anything that generates revenue. A day of professional services, manufactured items, maintenance contracts, license fees, widgets. They are all examples of Products.

Here are some of the benefits you get from using Opportunity Products.

  • Accurate opportunity amounts. Base the total value of the opportunity on the specific price and quantity of products.
  • Improved pipeline visibility. Monitor the size, trend and quality of the pipeline by product category.
  • Identify training and development needs. Compare average deal size, number of products and type of products across salespeople.
  • Pricing control. Use approval processes to control price discounts.
  • Forecast revenue over time. Combine products and schedules to forecast revenue over months or years.
  • Streamline processes. Re-design contract and fulfilment processes.

If you have many Products, then consider using the GSP Product Selection Wizard to make it easy for salespeople to add Products to Opportunities or Quotes.

Use the GSP Product Selection Wizard to make it easy for salespeople to add Products to Opportunities or Quotes.

Here are blog posts that give more guidance on using Products and Product Schedules.

Missing Out On The Value Of Products? Learn The Basics

5 Killer Examples Of Recurring Revenue Forecasts In Salesforce

Manage 4 Types of Framework Agreement In Salesforce

4 Ways To Manage Volume Based Pricing In Salesforce

Opportunity Mistake #3 – Not Using Contact Roles

Even a simple B2B purchase rarely involves only one person.

“The number of people involved in B2B solutions purchases has climbed from an average of 5.4 two years ago to 6.8 today, and these stakeholders come from a lengthening roster of roles, functions, and geographies.” Harvard Business Review, March-April 2017.

However, not using Contact Roles is another common opportunity mistake in salesforce.

It’s not perfect. On the other hand, it is a standard feature that is easy to configure and use.

Contact Roles is a standard salesforce feature that is easy to configure and use.

The benefits you will get from using Contact Roles include:

  • Increased rigour in managing opportunities. The simple act of populating Contact Roles, forces salespeople to think about their stakeholder management approach.
  • Improved management team contribution. Often it is hard to define the decision maker, versus an influencer versus the financial approver. Yet surfacing this information in Contact Roles promotes healthy debate about the role played by each individual.
  • Improved long-term visibility. Using Contact Roles makes it significantly easier to identify the stakeholders that keep cropping up over time.

There is more on Contact Roles, including advice on the Role picklist values, in another of our blogs:

The Right Way And The Wrong Way To Track Opportunity Stakeholders

Opportunity Mistake #4 – Not using Chatter on the record

On any major deal – and even on many small ones – there will be a lot of communication between internal stakeholders.

Pricing, strategy, pre-sales demonstrations, stakeholder management and lots more. They are all the subject of extensive discussion.

However, managing that internal communication by email is a common opportunity mistake.

Using email for this dialogue means:

  • It’s difficult to revisit important discussion e.g. on discount decisions.
  • Important dialogue about the opportunity is dis-jointed.
  • Less clogged up inbox. Surely, we all want that!

Indeed B2B pricing consultant, Tony Hodgson, attributes many needless price discounts to email.

“Let’s say you give a 10 percent discount to the customer first time around. The dialogue around the internal justification and approval will nearly always be by email. A year down the line, the customer asks for a further discount. Chances are they are going to use the same justification in their argument that they used previously. Yet you consumed that justification in the original discount. But unfortunately, everyone will have forgotten and it’s virtually impossible to find the documentation.”

Far better, says Hodgson, to use Chatter, directly on the Opportunity.

Use salesforce Chatter directly on the Opportunity.

“Conducting the internal dialogue on the Chatter Feed within the Opportunity leaves no doubt as to where the justification and documentation resides. It’s there forever and a day. Maybe you’ll still agree to the discount – but at least you’re doing it with full knowledge of what went before”.

10 Expert Tips To Give Away Smaller Price Discounts

Opportunity Mistake #5 – Close Dates in the past

Unless you have a time turner, opportunities will not close in the past.

However, this is a very common opportunity mistake. An open pipeline that contains deals with a close date earlier than today.

In fact, many pipelines contain deals that are months out of date. This is a real-life example of what that looks like in a dashboard chart.

Pipeline has lots of opportunities with close dates in the past.

The impact of having out-of-date opportunities in the pipeline includes:

  • Poor quality pipeline visibility.
  • Inaccurate performance metrics e.g. errors in win-rate percentages.
  • Inability to forecast reliably.

The way you fix this problem depends on the scale of the situation and the resources at your disposal. You have the following choices:

  • Sweep the problem under the carpet.
  • Fix the problem yourself.
  • Get the sales team to fix the dates.
  • Take broad-brush approach with a mass update of opportunities.
  • Adopt a hybrid approach incorporating several of the above.

This is such a common opportunity mistake that I have written an entire blog post about it. It describes each approach to solving the problem in more detail and explains when they are appropriate.

Don’t Let The Best Dashboard Chart Look Like A Bedraggled Washing Line

So there they are. The top five opportunity mistakes in salesforce. Go ahead, and fix the usual suspects in your business.

Make It Fast & Easy To Add Product To Opportunities Or Quotes

Download the FREE App from our website today

Related Blog Posts

5 Compelling Ways To Increase Your Salesforce Benefits in 2016

5 Killer Ways To Increase Your Salesforce Benefits

If You Only Build One Salesforce Pipeline Chart In 2017 – Make It This One!

3 Common Problems With The Opportunity Sales Stage And How To Fix Them

10 Illuminating Ways To Measure Closed Won Deals

10 Illuminating Ways To Measure Closed Won Deals

It is often surprising how little effort goes into measuring closed won revenue.

I guess that after all, what’s happened has happened.

In most businesses, much more focus, energy and effort is directed towards building the sales pipeline.

But wait a moment.

We can learn from the past. And we can get insights that will help turn pipeline deals into future closed won opportunities.

It’s just a question of looking for those insights in the right places.

So here are 10 dashboard charts that will help you gather information from the past that you can apply today to increase closed won revenue.

1. Closed Won by Month and Territory / Salesperson

This is the starting point for analyzing closed won opportunities and revenue. It’s Chart #1 on our list of 12 Charts That Should Be On Your Salesforce Dashboard.

Measure closed won deals by territory on a salesforce dashboard to track sales performance.

In this example we are showing closed won opportunities for the current financial year. The chart and underlying report give immediate feedback on sales achieved for each territory.

Businesses with smaller sales teams will want to display the information by individual salesperson on the dashboard. Those with larger sales teams should have a dashboard for each territory that summarizes the information at an individual level.

Closed Won opportunities by individual salesperson by month.

With either chart, we have immediate information on the most important sales metric of all in terms of Closed Won opportunities. The level of total sales by person or team.

Based on our understanding of the environment in which team and salesperson operate, we can use the chart to identify potential areas for improvement.

All other things being equal, our chart tells us that we need to identify ways to increase revenue in the West Territory.

In the individual salesperson chart, Dave Apthorp is the top performer. Can Dave’s experience and know-how be shared across the team, particularly to help Shaun increase his sales performance? Are there other coaching, training and support activities that will boost Shaun’s figures?

Before starting that process however, there are other dashboard charts and sales metrics we can use to analyse closed won opportunities. These will help us be more specific and targeted in delivering activities that will increase revenue.

2. Closed Won by Customer Type

Generally it’s quicker and cheaper to sell to existing customers. Yet every business needs to sell to a combination of both existing and new customers in order to grow.

The Closed Won by Customer Type dashboard chart tells us whether we have the right mix for closed won deals in our company.

Examine closed won revenue by customer type to understand the mix between new and existing customers.

The chart shows that we have a weighting towards existing customers for closed won deals. Is this healthy?

Only the business strategy relating to our particular business can tell us that. However, having this information about closed won deals means that we can make judgments that will inform the future sales and marketing approach.

At a more specific level, we can re-format the chart to examine closed won deals by territory or salesperson. This might give us further insight on the best way to increase revenue in the West territory or to help Shaun increase his revenue.

3. Closed Won by Account

In many businesses there is one customer that contributes a disproportionate amount of revenue. In other companies, sales income is more evenly spread.

In either case, knowing your largest 10 customers by closed won deals is essential to implementing your key account management strategy in salesforce.

This dashboard table provides that information.

The top 10 Accounts by closed won revenue is a major factor in improving key account management.

The same table can be used to show the top 10 customers for each Territory or salesperson. This is a great input in defining local key account strategy.

In our example the University of Arizona contributes nearly twice as much revenue as the next customer. Probably everyone knows that is the number one customer already.

But it is likely that there would be less consensus on the other top customers. The closed won by Account dashboard table gives us hard facts that will influence account management and business development.

4. Closed Won by Product

This dashboard chart shows how our closed won revenue is split by product family or product category.

(If you are not using Products in salesforce then there is a very good chance that your pipeline visibility and closed won reporting would be much improved by doing so. Bring Your Opportunities To Life With Products).

Track closed won revenue by product family to identify ways to increase sales.

The chart shows that Generators dominate closed won revenue in our business.

Can revenue be increased for other product categories? It’s likely we want to drill down to the underlying report and see the closed won product information by salesperson, territory and customer. Then we can initiate specific, targeted management interventions to boost revenue for other products.

We might also want to get further insight by looking at the average deal size information shown in the dashboard chart below.

5. Average deal size for closed won opportunities

Analyzing closed won sales by average deal size gives insight that can be used to identify development needs.

This is especially the case if we add additional information to the dashboard chart that digs below the initial surface.

Use a dashboard chart showing the ratio of optional to core products.

In this example, Dave Apthorp consistently has the highest average deal size for closed won revenue.

The value of opportunities based on Dave’s ‘Core’ products is only marginally higher than his colleagues. Where Dave Apthorp really scores is by adding Optional products. Dave is significantly boosting his revenue and average deal size through the inclusion of optional products.

For full advice on the average deal size metric and how to apply it to increase revenue, read Why You Need To Measure Average Deal Size.

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE eBook today from our website

6. Conversion / Win Rates

Opportunity conversion rates (or win rates) compare the ratio of closed won to closed lost deals for a given time period.

The chart below shows the company conversion rate for both the number and value of closed won opportunities.

Opportunity conversion rate dashboard chart in salesforce.

In our example, in the first two months, the win rate by Amount was higher than the win rate by Count. This means we successfully closed a higher proportion of larger opportunities.

In September the position was reversed. A greater proportion of lower values deals were set to closed won.

Is the switch in September due to a short-term change in pricing strategy? Did we experiment with changes in remuneration and commission structures? Can the trend be attributed to marketplace dynamics?

Of course, drilling down to customer type, territory and salesperson level will give us further insight.

But the key thing is that now we are aware of this trend through the dashboard chart. This means we can investigate further and take action if necessary to influence the future sales approach and strategy.

For complete guidance on using Conversion / Win Rates in salesforce review How To Use Opportunity Conversion Rates For Superior Results. 

7. Closed Won by Campaign

The primary purpose of most marketing campaigns is often to produce sales-ready opportunities. Those opportunities then need to be converted successfully into closed won revenue.

The Closed Won by Campaign chart tells us how well each marketing campaign performed in generating sales revenue.

Track closed won revenue by campaign in order to make marketing activities more effective.

The Spring Trade Show and User Conferences were the two marketing campaigns that yielded the most closed won revenue.

As such the chart is a key way of gathering the information that will influence future marketing and business development strategy. It gives great insight into the campaigns we should continue, expand or stop.

Remember that the lead management and conversion process is critical here. If Leads are being converted without creating an Opportunity, then potentially the data for this valuable metric is lost.

Review this blog post for advice on lead management and conversion steps including downloadable process diagrams.

8. Key Sales Metrics for Closed Won Deals

These metrics are powerful ways of assessing the quality of the sales pipeline. In particular they help salespeople and managers identify deals that have a high risk of slipping from one month to the next.

Here are two of the key metrics:

  • Number of Close Date month extensions.
  • Age of the opportunity.

For example, if an opportunity has already slipped from one month to another an excessive number of times, we might question whether it’s correct the deal has a close date for the current month.

Likewise, if we perceive that the average sales cycle is 90 days, should we question a pipeline deal that has been open 120 days? What if the close date has slipped twice already?

But how do we judge if the number of month-on-month slippages or days open are warning signals?

The answer is to look at the key sales metrics for closed won deals.

Looking at key sales metrics for closed won deals can improve forecasting and pipeline management.

The chart gives insight that we can use to manage the sales pipeline effectively going forward.

For example, it shows that the average sales life-cycle for closed won deals is around 90 days (the left axis). The average number of times a closed won deal moved from one month to the next is around 1.5.

Some good news. The number of times the close date slipped from one month to the next for closed won deals is on a downward trend.

It’s a metric we are likely to want to track. All other things being equal, it implies the sales team are becoming more effective at forecasting and predicting when deals will close successfully.

9. Closed Won dashboard gauge

There’s no Target tab in salesforce.

But here’s the easiest way to compare sales versus target in salesforce. It’s a dashboard gauge.

Using a dashboard gauge is one way to track closed won sales versus target.

The gauge shows the value of deals that have been closed won for a given period of time – this financial year in our example. It gives a clear indication of our performance against target.

Similar gauges can be maintained for individual territories and salespeople.

The upside of this way of comparing closed won revenue against target using the gauge is that it’s quick and simple to set up.

The downside is that it requires manual effort to maintain the red, amber and green settings. It also gives no information on the contribution of the pipeline to current or future sales targets.

Here is more information on the 3 Ways To Measure Sales Versus Target In Salesforce.

10. Stage Movement for Closed Won deals

This dashboard chart gives valuable insight into how our deals arrive at the Closed Won opportunity Stage.

It shows the ‘From’ and ‘To’ opportunity Stage movement. In this case, the ‘To’ is filtered to include only the Closed Won stageThe stage movement report shows how opportunities have arrived at the closed won opportunity stage.

The chart shows that 5 opportunities moved directly from Prospecting to Closed Won. 11 deals moved from Negotiation to Closed Won. 3 even went from Closed Lost to Closed Won!

The first value, the one with no ‘From’ Stage, means that 3 deals were introduced into salesforce and went directly to the Closed Won Stage.

What can we infer from these numbers?

A disproportionate number of deals jumping from early Stages to Closed Won may mean that salespeople are not maintaining the accuracy of their pipeline opportunities.

It may also mean that deals are being deliberately held back until the salesperson is confident of a successful outcome. Sandbagging, in other words. This means sales managers are missing out on pipeline visibility.

Either way, the dashboard chart is giving us useful insight into the transition of opportunities into Closed Won revenue. Further analysis, at the territory or salesperson level may identify specific trends that will help to boost sales revenue and pipeline visibility in the future.

The past is the past. But students of history know there’s much that can be learned from the past. Start studying your closed won deals today to increase sales tomorrow!

Get the free pipeline management dashboard

Coming soon – a fully configured FREE dashboard that gives tremendous visibility of the sales pipeline and sales performance.

You will shortly be able to download and install this dashboard into your very own salesforce environment from the AppExchange. Then modify or customize the filters and conditional highlighting as you see fit.

The dashboard will be free. Register here for advanced notification of its availability.

Related Blog Posts

12 Must-Have Salesforce Dashboard Charts | With Video And Examples

3 Ways To Measure Performance Against Sales Target In Salesforce In 2017

Link Close Dates To Product Schedules To Avoid Warped Forecasts

Big is beautiful: The 4 easy dashboard charts you need to measure pipeline size

Why You Need To Compare Average Closed Won Opportunity Size

Why You Need To Compare Average Closed Won Opportunity Size

Recent research by GSP with one of our customers showed a 65% difference in the average closed won opportunity size.

That’s a huge variation.

All salespeople are working comparable territories. Selling the same products to similar customers.

So the variation represents a potential weakness in the sales process of some salespeople. And that’s a major opportunity.

So here’s a summary of the investigation.

Average Closed Won Opportunity Size

The first step was to create an Average Closed Won Opportunity Size report.

Tip: To do this, start by creating a matrix report. Assign Opportunity Owner to the left column. Place Close Date (grouped by month or quarter) across the top. Then add the Amount field to the main body, summarized by Average.

To register for a free dashboard that includes the Average Closed Won Opportunity Size report complete the form at the foot of this blog post.

Here’s what the resulting salesforce dashboard chart looks like.

This dashboard chart shows average size of closed won opportunities in salesforce.

And here’s the underlying report.

This salesforce report shows the average size of closed won deals.

The report shows that Dave’s average closed won deal size is $58K. This compares to $35K for John. That’s a 65% difference.

Average Closed Won Opportunity Size Compared to Total Sales

Let’s put some context on the figures. A large average deal size is no good if total sales are low.

Here’s the comparison.

Closed won opportunity revenue per salesperson.

Now we can see that Dave not only has the highest average closed won opportunity size. He’s also the top sales person. To find out the full story on this, read the blog Dave Apthorp: The Best and the Worst Salesperson.

John is the lowest performing salesperson and has the lowest average closed won opportunity size.

The overall sales performance of Sarah and Shaun is roughly in line with average deal size.

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE eBook today from our website

Average Number of Products per Opportunity

We spoke to the team manager, Colin Parish. Colin speculated that the average closed won opportunity size is closely correlated with the number of products sold on each opportunity.

In particular, Colin believed that the high performers sold more optional products.

Let’s see if he’s right.

The chart shows the proportion of the average opportunity size in terms of Core and Optional products.

Salesforce dashboard chart that shows the contribution of optional products to the average closed won opportunity size.

The split between Core and Optional is made using a custom field with these picklist values on the Product.

We can see that a significant proportion (over 35%) of Dave’s average deal size is made up of Optional products. In other words, Dave is doing a great job of adding ancillary products and services to his opportunities. That’s boosting his average closed won opportunity size.

Sarah is ranked third in terms of average closed won opportunity size and second in overall sales. Yet we can see the small contribution – less than 5% – that optional products make to her deals. Coaching Sarah in this area is likely to produce a direct increase in deal size and revenue.

“Sarah has one key challenge – she needs to add more optional products to her opportunities. She’s spending two days with Dave Apthorp, learning from his expertise.”

The chart is less conclusive for John and Shaun. They have some way to go to achieve the same ratio as Dave. But perhaps there are other factors also at play? Let’s examine that in a moment.

One final point on adding optional products before we move on.

Many salespeople find it difficult using the standard user interface in salesforce to find the right products to add to opportunities. It’s a common problem. Take a look at the product selection wizard to make it easy to identify and add products to opportunities.

Price Discount Impact on Average Opportunity Size

John sure is the leader on one dashboard chart. He gives away a higher proportion of revenue in discounts than anyone else!

salesforce dashboard chart that shows the amount of discount given away by each sales rep.

Dave and Sarah give away the least amount of discount in percentage terms. If Sarah can up her game in terms of the number of optional products per opportunity she’ll be at Dave’s level of sales performance.

Shaun and John can improve in terms of both optional products and discount giveaways. Colin is spending time with both, coaching and supporting them to improve their overall sales performance.

One final thing on price discounts. We recently interviewed pricing expert Tony Hodgson. for ideas on how to avoid giving away excessive margin through discounts.

“Most companies can increase profit by between 2 and 4 percent by doing nothing other than getting a grip on price discounts.” Tony Hodgson, Pricing Solutions.

Here are the 10 tips for controlling price discounts that Tony gave us. Colin is already implementing most of them!

Lessons learned

Here are the five lessons Colin says he has learned from looking at average closed won opportunity size.

How many can be applied to your business?

  1. Average closed won opportunity size is an essential sales metric that gives powerful insight.
  2. The metric can’t be used in isolation. Other reports add meaning to the figures.
  3. Tagging products Core and Optional is a really useful way of understanding how effective sales people are at up-selling.
  4. It’s important to measure price discount giveaways. The 10 pricing tips is a great resource for managing discount amounts.
  5. Have a range of sales metrics about closed won opportunity size gives managers the essential information they need. With these metrics, rep-specific coaching, training and support interventions can be made.

When all is said and done, there are only three ways to increase sales revenue. Increase the size of the pipeline, improve opportunity conversion rates, and increase average closed won opportunity size.

Go out and boost your revenue 🙂

Complete the form below to obtain a FREE SALESFORCE DASHBOARD that includes the opportunity conversion rates shown in this blog post.

Related Blog Posts

12 Must-Have Salesforce Dashboard Charts | With Video And Examples

3 Killer Pipeline Quality Metrics To Highlight When To Be Sceptical

How to use opportunity conversion reports for superior results

5 Easy Tips That Will Make Opportunity Probability Your Trusted Friend

How to use opportunity conversion reports for superior results

How to use opportunity conversion reports for superior results

How well do you know the opportunity conversion rates in your sales team?

Because when all is said and done, there are only 3 ways to increase sales.

  1. Grow the pipeline.
  2. Increase average deal size.
  3. Increase the opportunity conversion rate.

They’re all important.

“In most businesses, a small improvement in the opportunity conversion rate will yield a disproportionate increase in sales revenue.”

Measuring opportunity conversion rates (or win rates, if you prefer) helps identify ways to increase sales. And that’s a good thing.

Like many other salesforce dashboard charts, the opportunity conversion rate graph doesn’t give you the answer.

Rather, it tells you what questions to ask.

But be careful.

An over-emphasis on opportunity conversion rates can actually reduce your salesforce benefits. And that’s a bad thing.

So, here’s the right way to measure opportunity conversion rates in salesforce.com and here’s how to use those reports.

(Before we get started, here’s the dashboard chart that shows whether your pipeline is growing. We’ll cover average deal size next week.  If you haven’t already done so, register for updates here).

How to measure opportunity conversion in salesforce

Let’s take an example from one of our customers (the sales reps names have been modified). It shows how to report on the opportunity conversion rate.

Opportunity conversion rate dashboard chart in salesforce.

The dashboard chart shows the conversion rate in two ways.

  • Won % (Count). This is the percentage conversion rate in terms of the number of opportunities.
  • Won % (Amount). This is the percentage conversion rate in terms of the total value of opportunities.

Here’s the key thing about the chart. It shows the percentage won as a proportion of the total opportunities closed in each month (i.e. won and lost). It doesn’t calculate the proportion of deals won as a percentage of the total open pipeline. Doing the latter produces double-counting and incorrect metrics.

The chart shows that in three months – July, August and October – the conversion rate by Amount was higher than the rate by Count.

That’s probably a good thing. It implies that a greater proportion of high value opportunities are being successfully closed compared to lower value opportunities.

In September the trend is reversed. It appears more low value opportunities were closed successfully. That’s something we’ll want to investigate.

The overall opportunity conversion rates are around 35% in this company. Two months – July and October – exceed 40%. That’s quite high. Is it a good thing? Perhaps. Let’s investigate further.

12 Must Have Charts For Your Salesforce Dashboard

Download the FREE eBook today from our website

Opportunity conversion rate salesforce report

Here’s the underlying report for the chart.

Opportunity conversion rate report in salesforce.

In addition to the Won % (Count) and Won % (Amount), the report shows:

  • Sum of Amount. The total value of Won and Lost deals in the month.
  • Sum of Amount Won. The value of Won deals in the month.

These metrics are useful because they put the opportunity conversion rates into context.

For example, Shaun Yates has a 100 percent opportunity conversion rate for October. On the other hand, the Amount Won is only £5,000 – that’s small compared to the total value won by other salespeople in the month.

How to interpret the opportunity conversion report

Like any other salesforce report, we need to know how to use it. Here are 5 insights we can gain from the report above. Don’t forget, we need to validate each insight through further reports and investigation.

  1. Dave Apthorp focuses on higher value deals. Dave’s Won % (Amount) is consistently higher than the Won % (Count). Actually a previous blog post tells us why that is. Dave featured in the post, The Best and the Worst Salesperson on the salesforce dashboard. It turns out Dave puts all of his eggs in the two or three biggest deals each quarter and virtually ignores all the rest.
  2. John Davies has the lowest opportunity conversion rates.On the face of it, John will benefit from coaching that will improve his win rates. But we need to check that there isn’t more to it than just that. Is John focused more on new rather than existing customers? Is he operating in a new market? Or is he converting Leads into Opportunities much earlier than other salespeople and then qualifying them out at an early stage?
  3. Sarah Watson focuses on lower value deals. Sarah’s opportunity conversion rate is much better in terms of Count than Amount. Potentially she needs guidance on her approach to opportunity prioritization. Or she needs coaching and more experience in handling larger deals.
  4. Shaun Yates has consistently the highest opportunity conversion rates. Does this mean Shaun is a superstar salesperson? Perhaps. But his full-year conversion rate of 55% is suspiciously high. Potentially Shaun is keeping opportunities out of the pipeline until he’s confident that a deal is on the cards. Reviewing the time in stage velocity metrics will help determine this.

Gotchas to watch out for with opportunity conversion

Analyzing opportunity conversion rates is an effective way of identifying the actions that are needed to increase sales performance.

 

“Take care to use other reports and metrics to validate the insights you gain. Be sure you are not stimulating adverse behavior.”

  • Sandbagging. Are sales people deliberately keeping promising deals out of the sales pipeline? Do some deals only get introduced to the pipeline when the salesperson is confident an opportunity will be won? We already suspect Shaun of sandbagging. The impact is to boost opportunity conversion rates. But it also means managers lack full visibility of the sales pipeline and sales performance.
  • Pipeline over-inflation. This is the opposite of sandbagging. Deals that are well past their sell-by date never get closed. There are many reasons why deals do not get closed out of the sales pipeline. Over optimism that a deal, one day, will be done. Repercussions when deals are closed out. And even an over-reliance by the management team on opportunity conversion metrics.

Avoid these issues by using opportunity conversion rates in conjunction with other measures. For example, track average deal size, deal quality metrics and sales velocity measures.

Use opportunity conversion to increase sales revenue

So let’s say we’ve done our investigation. We’re happy with the numbers.

Here are seven ways that opportunity conversion rates can be used to boost sales revenue.

  1. Opportunity qualification. Low conversion rates are not necessarily a bad thing. As Bud Suse points out, there’s no point expending a lot of time and effort on a deal only to come a close second. Far better to create opportunities at an early stage whilst you investigate them. Then qualify-out those where you have a low chance of winning.
  2. Share and learn. Identify the salespeople with high opportunity conversion rates and share and learn from their experience and expertise across the team.
  3. Teach. Train and coach individual reps on how to improve their opportunity conversion rates.
  4. Territory analysis. Compare conversion rates across territories. Identify the systemic lessons that can be shared across regions and territories.
  5. Customer types. Optimize sales revenue by adjusting the balance of effort between new and existing customers.
  6. Value proposition. Test the impact of different marketing campaigns and go-to-market strategies.
  7. Funnel leakage. Use conversion rates in conjunction with Leaking Funnel reports to understand how and why deals are being lost from the sales pipeline.

Opportunity conversion rate is a powerful sales metric. Use it (just don’t abuse it) to increase sales revenue in your business today.

Complete the form below to obtain a FREE SALESFORCE DASHBOARD that includes the opportunity conversion rates shown in this blog post.

Related Blog Posts

12 Must-Have Salesforce Dashboard Charts | With Video And Examples

Why You Need To Compare Average Closed Won Opportunity Size

5 Easy Tips That Will Make Opportunity Probability Your Trusted Friend

How To Stop ‘Closed Lost’ Screwing Up Salesforce Dashboards