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4 Ways To Measure Revenue Against Sales Targets In Salesforce

4 Ways To Measure Revenue Against Sales Targets In Salesforce

Many executives get very frustrated, trying to measure sales versus target in Salesforce.

Perhaps you’re one of them.

Like others, you may even have searched in vain for the Targets tab. (If you’re still looking, stop now; it doesn’t exist).

Fortunately, if you want to know how to measure sales versus target in Salesforce, then you’re in precisely the right place.

That’s because I’ll show you how to answer two essential questions when it comes to quota management in Salesforce:

  • First, how do historical sales performance stack up against target? You likely need to know this for individual reps, by teams and for the overall company.
  • Second, is the funnel big enough to meet the target this month, next month, or next quarter? In other words, is there enough pipeline coverage?

Quite simply, without this information, you’re flying blind. In that case, it’s challenging to know which controls need adjusting to be sure of hitting your quota.

By the way, do you prefer to watch a video rather than read? If so, take a look at this recent webinar. I cover all the essential points and demo the GSP Target Tracker.

If not, skip the webinar recording, and jump to the next section.

What do we mean by Sales Target?

I mainly use the word ‘target’ in this article.

In your business, perhaps you prefer ‘quota.’ Or, maybe everyone refers to the ‘budget.’

Possibly, you talk about ‘hitting the number.’

Here, I assume they are all the same thing. A sales target is a dollar revenue goal over a period.

It doesn’t need to be dollars, of course.

The target may be in Sterling, Euros or any other currency. You may even have sales goals in multiple different currencies in your business.

You get the idea.

Three Types of Sales Target

We usually want to measure sales versus target at salesperson, team, territory or company.

However, in most businesses, we want to measure sales against three types of targets.

1. Historic sales targets

Historical sales targets are in the past. For example, last month, last quarter, last year.

We only need to know one thing about historic sales targets. Was the sales revenue higher or lower than the target?

Historic sales targets are in the past

Next, we need to know about current-period targets.

2. Current sales targets

These are the targets we are working to achieve right now. For example, this month, this quarter, this year.

However, we need to compare the target with two metrics.

These are the targets we are working to achieve right now

Firstly, the sales revenue already won.

Second, the size of the pipeline due to complete in the period.

In other words, pipeline coverage is an essential factor in calculating whether we will achieve quota for targets in the current period.

3. Future sales targets

These targets are in the future. For example, next month, next quarter, next year.

With these targets, there’s no won revenue because a deal can’t close successfully in the future.

These targets are in the future

In other words, pipeline coverage is king. We need to know whether the pipeline is big enough for us to meet future targets.

With that in mind, let’s look at the four ways to measure sales versus target in Salesforce.

How To Measure Sales Targets In Salesforce

There are four options for tracking performance against sales targets in Salesforce.

  1. Dashboard gauge.
  2. Forecasts tab.
  3. Lightning Home Page Performance Chart.
  4. GSP Target Tracker.

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

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

Bottom line:

If you want to cut to the chase, we believe the GSP Target Tracker is, by far, the best way to measure sales versus target in Salesforce.

Option 1 – Dashboard Gauge

This option uses a Salesforce dashboard gauge to display overall sales against the target.

Gauge displays overall sales against the target

The arrow indicator shows sales won. In the gauge, use the red, amber and green segments to define relevant breakpoints. For example, use amber to represent 80% sales target achievement and green for 100% sales target achievement.

The gauge relies upon an underlying sales report. The report summarizes the value of deals won over the relevant period.

Pros of the dashboard gauge

  • The report and dashboard gauge are simple and straightforward to set up.
  • The gauge is an easy way to understand quota performance visually.
  • It’s a quick and simple high-level summary of sales performance against target.

Cons of the gauge approach

  • The gauge is a simplistic target metric. For example, when measuring performance at the company level, there’s no visibility of individual rep or sales team sales versus target.
  • Breakpoint values need to be manually re-set for each target period. For example, if month-on-month targets are different, the breakpoints need to be changed each time.
  • There’s no visibility of pipeline deals. Unfortunately, this means we don’t know if there’s enough pipeline coverage to meet the sales target for next month. There’s nothing to tell us, for example, if winning 30% of pipeline deals means we’ll exceed the budget.

It’s the right choice if

  • You need to set up a target metric very quickly. If you need a target-tracking solution in the next five minutes, use this option.
  • You only need to measure top-level performance against sales targets. Alternatively, it’s an acceptable choice if you are prepared to invest the time to set up and maintain similar gauges for individual salespeople and each team.
  • Sales targets are the same for each period. In other words, it is not necessary to modify breakpoints each month.

A dashboard gauge is a viable option for a simple, straightforward measurement of sales targets.

Remember, use the gauge in conjunction with other dashboard charts and reports to get full visibility of sales performance and pipeline. Incidentally, the free GSP Sales Dashboard includes the target gauge and report. You can download the dashboard from the AppExchange here.

Option 2 – Salesforce Forecasts Tab

The Forecasts tab is the standard function in Salesforce for target measurement.

It’s an advanced method of comparing sales versus quota.

Forecasts tab is an advanced method of comparing sales versus quota

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

Pipeline deals also show up. Consequently, managers have valuable information on the strength of the funnel and the likelihood of achieving sales goals.

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

However, there is a downside.

Many salespeople and managers find the Forecasts tab highly involved. The functionality is challenging to use.

As such, significant training and coaching is needed to use the Forecasts tab successfully for tracking performance against sales targets.

Pros of the Forecasts Tab

  • Set sales targets at individual, team, company and product family level.
  • Tracks performance against quota based on the opportunity forecast category (won, committed, pipeline and best-case).
  • Managers can override forecasts submitted by their direct reports. Doing this modifies the expected performance against current and future team targets.
  • Reviewable history to learn from the accuracy of forecasts submitted in the past.

Cons of the Forecasts Tab

  • The Forecasts tab is hard to maintain and use compared to other areas of Salesforce functionality.
  • As such, it needs detailed training for sales reps and their managers.
  • Salespeople manually update their forecasts to make the overall sales projection more reliable. That means a high level of commitment across the team is essential to get the full benefits from the Forecasts tab.

It’s the right choice if

  • You have complex target measurement requirements.
  • In your business, managers often override the forecasts submitted by their salespeople.
  • The sales team is mature and the company has a high level of Salesforce user adoption.
  • Appropriate training for salespeople and managers is available.

The Salesforce Forecasts Tab provides robust target tracking and forecasting capabilities. However, successful roll-out and ongoing adoption need proper planning and preparation.

Option 3 – Lightning Home Page Quarterly Performance Chart

You’ve probably seen the quarterly performance chart on the Salesforce Lightning Home page.

Here’s an example.

Lightning Home Page Quarterly Performance Chart

The green line is the sales goal. The orange line shows the value of closed-won opportunities. 

The blue line shows Closed-won and opportunities over 70% probability.

However, it’s far from my favorite method of tracking sales versus target. 

Pros of the Lightning Quarterly Performance Chart

  • It’s free to use as a standard Salesforce Lightning feature. 

Cons of the Lightning Quarterly Performance Chart

  • Only the quarterly sales goal appears. There’s no monthly breakdown.
  • No drill-down to see the underlying opportunities.
  • Sales managers cannot see the Lightning Quarterly Performance Chart of their team members.
  • There’s no way to adjust the 70% setting. For example, it’s not possible to include opportunities of over 50%.

It’s the right choice if

  • You don’t like any of the other four options.

For these reasons, I don’t believe many companies use the quarterly performance goal as their main method of measuring sales quotas.

Option 4 – GSP Target Tracker

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

Keep reading or click play to see how the GSP Target Tracker measures sales performance against sales targets in Salesforce.

The Target Tracker is a managed package. As such, it is plug-and-play with any Salesforce environment.

Salespeople and managers need little training to use the Target Tracker app. The Tracker also takes away the need to adjust forecasts manually.

Closed won and pipeline deals automatically link to relevant sales targets. Consequently, it’s easy to compare sales goals with a combination of won deals and an outstanding pipeline.

In other words, everyone has full visibility of pipeline coverage.

Look at the example below. It’s the sales target for Dave Apthorp, for a single month.

We can quickly see Dave’s sales performance this month versus target:

The target tracker allows you to easily see sales performance this month versus target

The first on-page chart on the right shows Dave’s target in blue; his Closed Won deals in green and the Expected Revenue of his pipeline deals due to close this month are in orange. In other words, we can see the pipeline coverage versus target.

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

The second chart analyses the pipeline for the month. Consequently, both Dave and his manager are clear on the likelihood of hitting the target based on the pipeline deals. (Are we sure those deals in Qualification will be complete by the end of the month?).

The lower section 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.

easily view opportunities that are linked to target records

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

Target Tracker Dashboard

Dashboard charts within the GSP Target Tracker summarize company and team information.

target tracker dashboard summarizes all company and team information

The dashboard shows over / under-performance against sales targets at the company, team and individual level.

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

Pros of the GSP Target Tracker

  • It’s easy for sales reps to use. Opportunities automatically link to relevant targets.
  • There’s highly visual information on performance against target.
  • Powerful reports and dashboard charts provide information on sales goal performance at company, team and individual rep levels.
  • The quality of the pipeline and and pipeline coverage are very clear.
  • Very easy to set up. Install direct from the AppExchange.
  • Company-specific customizations are also available.

Cons of the GSP Target Tracker Tab

  • A license fee of $250 per company per month (unlimited users).

It’s the right choice if

  • Your need is for a straightforward solution that gives powerful insight into target attainment and pipeline coverage.

So, that’s our detailed explanation of the four ways to measure sales versus target or quota in Salesforce.

Of course, get in touch to talk about how to use them in your business. Or, follow the link below and test drive the GSP Target Tracker today.

Measure Sales Performance Versus Target

Download the App from the AppExchange today

Recorded webinar on Sales Targets in Salesforce

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

Got a question? Contact Us to find out more about tracking sales versus target in Salesforce in your business.

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4 Ways To Measure Revenue Against Sales Targets In Salesforce

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How To Measure Sales Pipeline Coverage With Confidence

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How To Measure Sales Pipeline Coverage With Confidence

How To Measure Sales Pipeline Coverage With Confidence

Sales pipeline coverage measures the ratio between the dollar value of your funnel and upcoming revenue targets.

For example, a sales pipeline coverage ratio of three means your total pipeline is three times your quota. In this case, you need to close 33% of the pipeline’s value to meet your sales goal.

Remember, that’s not one-third of all deals. It’s a third of the value of the pipeline. Win deals that are above average size, and you need to close fewer of them successfully.

Alternatively, if your sales pipeline ratio is one or less, you don’t have enough funnel to meet your revenue goal. Not even if you win every deal.

Managers often focus on this metric at the start of the year or quarter. They, and the board, want to know whether it’s going to be a successful period. As such, pipeline coverage is top-of-mind for many executives.

As one manager told me recently, “The board demand comfort that the sun will be shinning this summer, and there won’t be a chilly wind come the Fall.”

However, confidence in the pipeline coverage ratio assumes you have a reliable way to calculate this critical metric. Unfortunately, in my experience, the approach taken by many companies is flawed or simplistic, or both.

In this article, I’ll explain how to calculate your sales pipeline coverage ratio confidently.

1 – How Pipeline Coverage Is Usually Measured

Here’s how most companies measure pipeline coverage:

The formula explaining how to calculate your companies Pipeline Coverage

The pipeline coverage ratio equals the total value of opportunities due to close in a period divided by the target for the same period.

For example, let’s say our sales target for the year is $1M, and the pipeline for deals closing this year is $3.5M. Consequently, our pipeline coverage ratio is 3.5.

To calculate the ratio, you need a Salesforce report that measures the total pipeline size. Then divide the quota into the value of the funnel.

2 – Sales Pipeline Coverage Factor

There’s a common rule-of-thumb many sales managers apply. It’s that the pipeline coverage ratio should be between 3 and 5.

How do they arrive at this number?

Assumptions about the opportunity win rate drive the thinking. If you assume you will win one-third of deals, then the pipeline coverage ratio needs to be at least 3. Likewise, if you reckon on winning 25% of opportunities, the pipeline coverage ratio must be a minimum of 4.0.

It’s an attractive concept, not least, because it’s simple enough to do the calculation in your head often. It’s math that people frequently do in the first week of January.

However, in my opinion, it’s equivalent to asking about the summer weather on January 1. You know the jet stream is roughly in the right place, but that’s a broad brush indicator. Many other factors will influence the weather by the time you take your vacation.

Likewise, the pipeline coverage ratio is fraught with problems that often render it meaningless when it comes to predicting sales targets attainment confidently.

3 – Problems with Pipeline Coverage Factors

Here are four common problems I often see in companies using pipeline coverage ratios to understand whether they have enough funnel to meet revenue targets.

  1. The metric takes no account of opportunity stages or the customer buying cycle. For example, an extensive pipeline may contain many early-stage opportunities with a low chance of closing successfully. In this case, a high pipeline coverage ratio risks creating a false sense of confidence.
  2. Hope rather than genuine customer intention or activity exaggerates funnel size. That’s because an emphasis on pipeline coverage means salespeople are under pressure to boost funnel size. Similarly, the pipeline often contains deals that have slipped from the previous period and have little change in closing successfully. In both cases, your funnel is overstated.
  3. Measuring the total pipeline size ignores many variances between types of opportunities. For example, it’s reasonable to assume a difference in win rates between new and existing customers, business lines, and territories. There may also be run-rate opportunities for which no current opportunities exist. As such, the pipeline coverage ratio is a very broad-brush number.
  4. The metric is only meaningful at the start of a period. For example, part-way through the year, when you already have many won deals, you need to carefully compare the remaining quota with those deals well-advanced through the buying process to gauge your confidence in hitting your target. For information on exceeding quota towards the end of the year, we’ve created a collection of Q4 Sales Strategies.

     

With that, you might now be wondering:

Is there a better way to calculate pipeline coverage confidently?

The answer is yes. I’ll show you two methods.

4 – Measure Weighted Pipeline Coverage

Here’s the first. With this approach, you calculate weighted pipeline coverage based on Expected Revenue.

Expected Revenue consists of two things—first, the value of won deals. Second, the value of the weighted pipeline. Add these two numbers together, and you have the Expected Revenue for a period.

To calculate the weighted value for an opportunity, you multiply the opportunity amount by the probability. For example, if the opportunity amount is $30,000, and the probability is 30%, then the weighted value is $9,000.

Compare your sales target with Expected Revenue to measure the pipeline coverage ratio.

Add up this number for all deals in the funnel, and you have the weighted pipeline.

This method means we can compare the Expected Revenue with our sales target.

Compare your sales target with Expected Revenue to measure the pipeline coverage ratio.

For example, in this case, we can see that the Target for the quarter is $100,000, and we have $40,000 in won revenue.

The weighted pipeline is $70,000. Therefore, we have enough pipeline to meet our sales target.

Using Expected Revenue rather than the pipeline coverage ratio means we are more confident in our assessment. That’s because the weighted pipeline reflects the various opportunity stages.

For example, the figure may include a deal in the Negotiation Stage at 80%. We’re confident it’s going to happen. However, deals at the Prospecting or Qualification Stages may be at 10 or 20 percent.

Likewise, opportunities for existing customers may have a higher probability that deals with new prospects. These variances are all reflected in the weighted pipeline.

In other words, the weighted pipeline is a reasonable estimate of the actual revenue we are likely to achieve from open opportunities.

Combining the weighted pipeline with won revenue means that Expected Revenue isn’t valuable only at the start of the period.

For example, if you are halfway through the quarter, the Expected Revenue is a reliable estimate of the likely sales outturn. You can be more confident in this figure than a simple pipeline coverage ratio.

I have written extensively about best practices for using and applying Expected Revenue. For example, here’s a powerful blog post on the topic:
How And Why Expected Revenue Delivers Reliable Sales Forecasts.

Here’s where you can also get advice on making sure opportunity probabilities are accurate.

5 – Measure Pipeline Coverage Using the GSP Target Tracker

Here’s the second method to measure pipeline coverage versus quota.

It’s to use an app we built specifically for the purpose. It’s called the GSP Target Tracker.

Here’s an example of the target for one salesperson. It’s for Dave Apthorp, for September.

We can see that Dave’s target is $50,000. He’s already won $23,400 this month. And the value of his pipeline due to close in September is $46,000.

That sounds great. It looks like Dave is smashing his number.

But wait.

The weighted value of that pipeline is only $16,600. That means Dave’s Expected Revenue for the month is $40,000. That figure is the sum of won deals and the weighted pipeline.

In other words, Dave has a shortfall this month of $10,000. In other words, his remaining pipeline isn’t big enough to meet his quota.

We can see that Dave's pipeline isn't big enough to meet his sales quota.

We immediately grasp this on the right-hand chart. The blue bar is Dave’s target, the represents won deals, and purple is the weighted pipeline. The variance, negative in this case, is in orange.

Don’t stop there. Look at the chart below.

This chart shows the full value of Dave’s pipeline due to close this month. In other words, the $46,000, but split by Stage.

Over 50% of the pipeline due to close this month is in the Qualifying Stage. So now, I’m even more concerned. It will be challenging for Dave to complete many of those deals if the average sales cycle is three or four months.

Further down the page, we see the opportunities that make up the pipeline.

Now, we can focus on the deals that Dave needs to work on urgently. And potentially, move some of these early-stage opportunities to later months.

6 – Sales Pipeline Coverage Dashboard

The GSP Target Tracker has a comprehensive dashboard the displays pipeline coverage for the company and all salespeople.

For example, this dashboard shows the performance of all salespeople this quarter.

We see immediately who is likely to hit their target and who needs more help.

The next dashboard chart shows the month-on-month pipeline coverage for upcoming months; and the historical performance for previous months.

Of course, you can drill down into any report to see more information.

7 – Customizing the GSP Target Tracker

The app is a powerful way to measure pipeline coverage based on the Opportunity Amount.

However, we can quickly adapt the app to use custom opportunity fields. We can also use quarterly or annual targets rather than monthly.

We even have customers linking opportunities to business line targets, and some people tracking quota against products.

All in all, it’s an excellent way to measure your pipeline coverage ratio.

It’s easy to get in touch to find out more. Or to take a free trial of the GSP Target Tracker, visit the AppExchange.

8 – Over To You 

Let us know which of the three ways of measuring the pipeline coverage ratio you prefer.

Of course, if you need advice or want to discuss the options, get in touch, and we’ll arrange a web meeting to talk through the topic. 

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5 Easy Tips That Will Make Opportunity Probability Your Trusted Friend

5 Easy Tips That Will Make Opportunity Probability Your Trusted Friend

Opportunity Probability stands in the corner at pipeline review parties.

Usually, he barely gets a second look.

Everyone knows he’s always invited. But no-one feels like speaking to him.

Sometimes, it would be better if he just went away.

Nevertheless, here’s the thing:

Opportunity Probability can be your helpful friend. He’s much more engaging than you think.

“Used in the right way, Opportunity Probability increases forecast accuracy and roots out deals that should be qualified-out of the sales funnel.”

It’s just a matter of knowing what to do with him.

So let’s understand who this Opportunity Probability chap is and why he’s undervalued.

Then I’ll explain five best practice tips that will turn him into your valuable and trusted friend.

 

Opportunity Probability Defined

Opportunity Probability is the standard field in Salesforce (or any other CRM system for that matter) that quantifies the likelihood of winning an opportunity.

If the Opportunity Stage is Closed Won, then the Opportunity Probability is 100%. If the Opportunity Stage is Closed Lost, the Opportunity Probability is 0%.

If the opportunity is still open, then Opportunity Probability is somewhere between 1% and 99%.

Why Opportunity Probability Is Disliked

There are three reasons why sales executives don’t make the most of Opportunity Probability.

Understanding why these reasons are not valid is vital to making the most of this metric.

Here they are.

 

Sales Deals Are Binary

Sometimes, salespeople win only part of the deal. For example, the customer negotiates a lower price. Or she doesn’t purchase everything on the proposal. Nevertheless, the sales process still concludes successfully, or it doesn’t.

Therefore, the binary nature of sales means some executives don’t see any value setting an Opportunity Probability for pipeline deals.

But here’s the thing. 

No-one knows the outcome in advance. If people did, there would be no point in having losing deals in the pipeline in the first place. The reality is, you will win some deals and lose others. The problem is you don’t know which ones.

That means that once there’s a critical mass of opportunities – and that number can be quite low – Opportunity Probability can calculate the Expected Revenue

Expected Revenue is a proven way to create robust sales revenue forecasts. It’s not the only way. However, using it alongside other methods, a sales forecast based on Expected Revenue stands up to inspection from colleagues and internal peers.

However, that assumes one thing: the opportunity probability is reliable.

Accurate Opportunity Probabilities

Often, there are many unknowns with sales deals.

We can’t be sure what the customer is honestly thinking. Likewise, we don’t know the moves our competitors are making. And it’s hard to know all the stakeholders involved.

That means Opportunity Probability can difficult to quantify. Or it has a spurious degree of accuracy. Is the probability of winning this deal 65%? Or 70%? Or some other figure?

However, Opportunity Probabilities should be set based on evidence from the customer. This evidence indicates that a deal is more likely or less likely. Every sales process is different, so agree on what constitutes positive and negative evidence in your market place.

More about this in Tip #2.

Opportunity Probabilities are locked to Opportunity Stages

Many Salesforce users believe Opportunities Probabilities lock to the Opportunity Stage.

They’re not. It just seems that way.

The Opportunity Probability is changed when salespeople update the Opportunity Stage. It moves to the default for that stage.

However, the default value may not be realistic.

That’s why the figure can be manually adjusted. Salespeople can override it and enter a new value. 

Therefore, use this flexibility to set a realistic Opportunity Probability on each deal.

5 Opportunity Probability Best Practice Tips

So here are the five tips that will make Opportunity Probability your trusted friend.

 

1. Adjust the Opportunity Probability On Each Deal

Too often, salespeople regard Opportunity Probability as fixed for any given Opportunity Stage.

As we’ve said already, it isn’t.

Double-click on the field or Edit the Opportunity to set the value right for the deal.

Adjusting the opportunity probability directly on the opportunity

Recommendation: Make sure salespeople understand how to adjust Opportunity Probabilities and why this is important.

Awesome Pipeline and Sales Performance Visibility

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2. Set Opportunity Probabilities Based On Evidence

Think about this situation for a moment.

Let’s say four companies are competing for a deal. They all have an Opportunity Stage of Investigation, with an Opportunity Probability of 25%.

All four companies submit their quote and move the Opportunity Stage to Customer Evaluating. Let’s assume the Stage has a default probability of 30%.

So now the combined Opportunity Probability is 120%. However, that’s silly.

The only thing that has happened is that the sales process has moved forward for each seller.

However, Opportunity Probability reflects the state-of-play in the selling process. It doesn’t say anything about the buying process.

So instead, base Opportunity Probabilities on evidence from the potential customer. Here are three examples of confirmation from the customer that might warrant an increase in probability.

  • You are get preferential access to key stakeholders to conduct discovery.
  • After receiving four proposals, the customer selects you and one other for presentation.
  • The customer Sponsor communicates to colleagues that she prefers your bid over the competitors.

Recommendation: Define and agree on the customer and buyer behaviors in your marketplace that indicates a positive intent from the prospect. Standardize and agree on these across the sales team.

Admittedly, setting Opportunity Probabilities based on customer evidence is more complicated than merely relying on the default Stage values. But it encourages salespeople to think through the sales process and to seek out customer commitment. That in itself increases the likelihood of a successful sales outcome.

 

3. Use Non-standard Opportunity Probability Values

No-one mandates that increments of 10 or 20 percent apply to Opportunity Probabilities.

Here’s what a highly successful VP of Sales at one of our customers says to his team.

“I know the chance of winning this deal is 50:50. But use your instinct. Set the Opportunity Probability to 49% or 51%. I want to know which side of the fence you’re on.”

Not every 51% deal is won, and not every 49% deal is lost. But the act of coming down on one side or the other encourages thought and analysis.

Opportunity probability over 50% on the Opportunity

In this business, managers work through each deal with the sales executives to coach them on driving the buying process forward. This dialogue – assisted by the Opportunity Probability – contributes to conversion rates well above industry norms.

 

4. Set realistic default values for each Opportunity Stage

We’ve talked about setting an individual Opportunity Probability for each Opportunity. But the default Opportunity Probabilities associated with each Stage still have a role to play.

These default values should reflect the norm for your business.

They provide a benchmark for salespeople.

If the Opportunity Probability is above the benchmark, can it be justified? If it’s below, can the sales approach be improved?

But here’s my experience.

In many cases, the default Opportunity Probabilities set for early Opportunity Stages are too low. And the default values set on the latter Stages are too high.

Recommendation: Take a hard look at the default Opportunity Probability values in your Salesforce environment. Discuss them in a team meeting. Reach agreement on the correct values for your business based on experience and input from the sales team.

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5. Automatically set Opportunity Probabilities based on historical outcomes

So far, we’ve talked about the standard Opportunity Probability field in Salesforce.

But what if you could automatically set the Opportunity Probability field based on experience?

That means the probability is automatically set based on, for example:

  • The win rate for new versus existing customers.
  • Historical performance of salesperson performance.
  • Size of the deal.
  • Region or geographical territory.
  • Products associated with the opportunity.

We are implementing this for some customers.

We have developed methods to gather statistical data from Salesforce that is not available via the user interface. 

This data means we are helping companies predict the outcome of new opportunities based on historical evidence.

Opportunity Probability and Calculated Probability highlighted on the opportunity

Customers with this approach still apply the standard Opportunity Probability field. It means the salesperson can always use their judgment.

Get in touch if you want to find out more.

“If you’ve left Mr Opportunity Probability alone in the corner up to now then this is the time to bring him out into the open.”

Used in the right way, Opportunity Probability helps salespeople to think through their opportunities. It facilitates discussion between managers and salespeople. And it enables accurate forecasting based on Expected Revenue.

Start getting to know your friend better.

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Forecast Categories in Salesforce | What They Mean and How To Use Them

Forecast Categories in Salesforce | What They Mean and How To Use Them

This guide tells you everything you need to know about Forecast Categories in Salesforce.

In this all-new guide, I explain:

1. The fundamentals of the Forecast Category field in Salesforce.
2. How Forecast Categories and Opportunity Stage fields relate to each other.
3. How to define and interpret Forecast Categories.
4. Ways you can (and can’t) customize the Forecast Category values in Salesforce.
5. Four reasons you should use Forecast Categories to improve sales pipeline reporting.

If you want to understand what the Forecast Categories means and learn how to use them, then this guide is what you need.

With that, let’s get started.

 

Forecast Category in Salesforce Explained

The Forecast Category field in Salesforce classifies each sales opportunity in terms of the salesperson’s confidence in winning the deal in a given period.

This classification is different from the opportunity stage field, which describes the pipeline in terms of the current position in the sales process.

That said, the Forecast Category on each deal is often determined by the opportunity stage.

However, here’s the important thing.

Opportunity owners can adjust the Forecast Category on each opportunity, based on how likely they think the deal is to close successfully. They can do this without changing the opportunity stage.

 

Forecast Category Example

Let’s say you have two opportunities. Both at the Proposal stage and you’ve presented your quote.

On the first, the customer tells you that she is still reviewing offers from several competitors.

On the second, the customer has rung you several times to check on when you can deliver. She’s arranged the training for your product for the team. You know from Pardot that she’s been checking the terms and conditions on your web site, and she’s asked for a follow-up meeting.

You might classify the first opportunity as Best Case in the Forecast Category. (I’ll explain what these terms mean).

However, you classify the second opportunity as Commit. In other words, you’re saying to your boss, “trust me, I’ll bring this one in this quarter.”

You get the idea. The Forecast Categories give us additional sales funnel insight at the individual deal level.

This insight reflects the certainty the salesperson feels in winning each opportunity.

Let’s look at a Forecast Category. Then I’ll explain the definitions.

 

Forecast Category Report

Let’s assume we are at the start of Quarter 2 (April – June).

Here’s an example of a Salesforce dashboard chart using Forecast Categories for Quarter 2.

Here’s the corresponding report.

Example sales pipeline report using Forcast Categories

$111,000 of the funnel is classified Pipeline. $60,400 in Best Case. $18,100 is in Commit. And a further $16,100 is in Closed.

Forecast Categories are valuable field in creating reliable sales forecasts. However, we need to know how to interpret the categories.

 

Forecast Categories defined

Here’s what the meaning of the categories in Salesforce.

 

Pipeline

Only a small number the opportunities in this category will close successfully within the current period. Pipeline means the customer is in the early stages of the buying process, and deals in this Forecast Category need further development.

As a guide, you should expect only a quarter of these deals to close within the quarter.

 

Best case

Best Case means there is work to do to advance these opportunities. Nevertheless, the sales deals are fully qualified, and the opportunity has an embedded Close Plan.

You should expect to win between a third and half of the deals in the Best Case category.

 

Commit

The Close Plan is going well on these opportunities. Commit means you are confident of a successful outcome, and only in exceptional circumstances do these opportunities slip from the current period. You can confidently rely on these opportunities in your sales forecast.

You should expect to win 90% of the opportunities in this Forecast Category.

 

Closed

Closed opportunities are won. No further sales effort is required to clinch the deal or be sure of the sales revenue.

Include all of the opportunities in Closed in the sales forecast for the month or quarter.

 

Omitted

Opportunities are set to Omitted when they are Lost or qualified out. However, for reporting purposes, sometimes other opportunities, renewal deals, for example, are allocated to the Omitted category.

The sales forecast excludes opportunities in the Omitted category.

 

Adjusting Forecast Categories

You pre-define Forecast Categories based on the opportunity stage. (We’ll look at how to do that in a moment).

However, for Forecast Category reports to be meaningful, the value on each opportunity must reflect the confidence of the salesperson.

Fortunately, therefore, the opportunity owner can change the Forecast Category on each deal.

However, here’s something to bear in mind.

Only the opportunity owner can do this. Salesforce doesn’t care if you are the system administrator or the CEO; it’s still only the opportunity owner that can change the Forecast Category on an opportunity.

 

Forecast Category and Opportunity Stage relationship

In Salesforce, each opportunity stage has a pre-defined Forecast Category.

The easiest way to see this is by looking at the configuration area of the opportunity stage field.

In this case, we have five pipeline stages.

The category associated with each stage is shown further to the right.

For example, we’ve grouped two opportunity stages (Value Proposition and Proposal) in the ‘Best Case’ Forecast Category.

We can easily change this. Click edit next to the stage name, and re-assign the value.

Simple as that.

However, you might be wondering:

How can I change the Forecast Category picklist values?

 

Modifying Standard Forecast Categories

You can change the terms in Salesforce, but you can’t add new values.

For example, we can change the Pipeline value to Qualifying. To do this, go to the Forecast Category field.

Then click edit and make the change.

That’s it.

However, here’s what you can’t do:

Add new Forecast Category values.

If, like me, you’d like the ability to add new values to the picklist, then you can vote for the idea here.

 

Reasons To Use Forecast Category Reports

Many companies that analyze the sales pipeline using the Close Date & Stage report also use Forecast Category reports.

Here are four reasons to use both in a Salesforce dashboard.

1. Salespeople must commit

If your sales team already uses the Commit concept then the Forecast Category is an excellent way to report on those deals.

In other words, salespeople must identify the pipeline opportunities they are very confident will close within the period.

Many businesses find this is a powerful way of making sure deals don’t slip; salespeople have to go all-out to win the sale once they’ve placed an opportunity in the Commit category.

 

2. Separating process from intent

The opportunity stage reflects your selling process. However, it says nothing about the customer buying process. Nor, indeed, does it indicate confidence in winning a deal.

Forecast Categories are a way to abstract the opportunity from the sales process.

Doing this is possible because, unlike the opportunity stage, Forecast Categories reflect confidence by the salesperson in the intention of the customer.

Consequently, in funnel reviews, managers can examine the pipeline by sales process AND salesperson confidence.

 

3. Communicating upwards

In some companies, Board and executive reporting use Forecast Categories.

The Board gets the opportunity stage concept. However, they want to know what the sales team believes will happen.

Likewise, if you have different opportunity stages for different types of deals (for example, new sales versus renewals), this is also an excellent way to summarize sales forecast reports for the senior management team.

 

4. Summarize opportunity stages

If you have more than four or five pipeline stages, then you might want to rationalize them. This article will help you do that.

Nevertheless, Forecast Categories are a way to make pipeline reports more readable and useful. That’s because each category can reflect several pipeline stages.

Likewise, if you are in the habit of changing opportunity stages regularly, then you need consistency of reporting. Forecast Categories are one way to achieve this.

 

Use The Forecast Category For Pipeline Reporting (Video)

Here’s my video answer to a question from one of our readers:

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How To Measure Sales Versus Target In Salesforce (2020)

How To Measure Sales Versus Target In Salesforce (2020)

If you want to track sales versus target in Salesforce, there’s a superb app that empowers you to do it.

It’s called the GSP Target Tracker.

Here’s a summary of the essential things the Target Tracker helps you do in Salesforce:

  • Compare rep, team, and company sales versus target.
  • Measure the pipeline coverage ratio. Expressly, understand whether you have enough funnel to meet your sales quota.
  • Conduct meaningful pipeline reviews and salesperson 1.1s.

Furthermore, the app delivers target performance metrics and pipeline visibility that you are unlikely to get elsewhere in Salesforce.

The Target Tracker app is straightforward to use for both salespeople and managers. You can customize the app within Salesforce to meet the specific needs of your company.

And here’s the best thing of all. The Target Tracker costs $250 per month per company, and there’s no user-based fee. We think that’s an excellent price.

Measure Sales Versus Target In Salesforce with the GSP Target Tracker

Here’s what we cover in this article:

  • How the Target Tracker works in Salesforce.
  • The Salesforce Target Tracker dashboard.
  • Ways you can customize the Target Tracker.
  • How to trial and buy the Target Tracker app.
  • Best practice for conducting pipeline views using the Target Tracker.

Let’s start.

Section 1

How the Target Tracker works in Salesforce

Sales rep targets in Salesforce

Here’s an example of a target record for a sales rep in Salesforce.

It’s the quota record for Dave Apthorp, for March 2020.

Dave’s quota for the month is $50,000. So far, he’s won $30,000. Consequently, he’s achieved 60% of his target.

Now let’s look at this pipeline coverage. We can also see that Dave’s pipeline for the month is $48,000. However, the weighted value of his funnel is $14,200. (Weighted pipeline is the Probability of each Opportunity multiplied by the Amount).

As a result, Dave’s Total Expected Revenue for the month is $44,200. That figure is the sum of Closed Won and Weighted Pipeline.

The result?

That means Dave’s pipeline coverage ratio is not high enough. Consequently, his Expected Variance against the target for the month is negative, to the tune of $5,800.

On the right-hand side, those numbers are all shown as percentages of Dave’s sales goal for March.

For example, Dave has achieved 60% of his target; his total pipeline is 96% of the target, and his Weighted Pipeline is 28% of his sales goal.

The chart further to the right shows Dave’s target performance.

As we can see, Dave has a shortfall against his quota.

Beneath this graph, the doughnut chart analyses Dave’s funnel for March.

As Dave’s manager, I should be concerned. That’s because more than half of Dave’s funnel for the month is still in the Qualification opportunity stage. A further quarter is still in Needs Analysis.

We need to ask:

Is it realistic these deals will close this month?

If not, then Dave’s sales performance versus target for the month is potentially worse.

 

Opportunity Conversion Rate Metrics

The Target Tracker provides valuable opportunity conversion rate metrics in Salesforce.

Conversion rates calculate by comparing the ratio of deals won to opportunities lost in the period. Here’s an example:

In this case, we can see that Dave has won three opportunities in March and lost seven.

That means his opportunity conversion rate in Salesforce is 25% by record count.

However, we also calculate the opportunity conversion rate by the value of opportunities.

For example, we can see that Dave has won $30,000. He’s lost $120,000. As a result, Dave’s opportunity conversion rate by value is 25%.

The conclusion?

Dave is successfully winning a higher proportion of large-value deals. We know this because his win rate by value is higher than his win rate by record count.

 

How Opportunities Link To Quota In Salesforce

Further down the page, we can see the Salesforce opportunities linked to Dave’s March Target.

These opportunities link automatically to the target. Consequently, everything is straightforward for the sales rep, with no additional work necessary.

If the Close Date moves, the opportunity automatically re-links to the relevant sales target. Again, no additional work for the salesperson.

Also, the Target Tracker makes it easy to see the essential, large deals that Dave must focus on to achieve his sales goal for the month.

In Section Three, we explain some of the customizations you can make to the Target Tracker. For example, you can use quarterly or annual targets. You can also use fields other than the Amount to compare opportunity revenue with quotas.

However, before that, let’s look at the Salesforce target dashboard included in the app.

Section 2

Sales Target Dashboard in Salesforce

The Target Tracker comes with a pre-built Salesforce dashboard containing twelve charts and reports.

You can modify any of these charts and reports to suit the structure of your own sales team.

Let’s look at several examples from the target dashboard.

 

Sales Rep Versus Target

You’ll recognize the first. It’s similar to the chart for Dave, showing his sales versus target for this month.

The dashboard chart compares the sales of all reps versus the target for the month.

In other words, the chart combines the quota, pipeline, and variance for all reps.

It’s straightforward to modify the report and create dashboard graphs based on territory, region, or another grouping.

In this example, we see a positive variance for two reps; and a shortfall in target performance for the two others.

 

This Month, Pipeline Analysis

This chart shows the pipeline due to close this month for all salespeople. As with the example for Dave, we can start to gauge whether the funnel is robust, and if our sales forecast is reliable.

Drilling down to the detail, we can identify opportunities that might let our sales forecast down.

Now, we can start to question these deals and potentially move them to a later month.

 

Sales versus Target This Year

This dashboard chart shows the month-on-month performance for the whole year.

It’s an effective way to know whether there is enough pipeline coverage for the upcoming months. The chart also shows clearly how your team has performed against its month-on-month sales goals.

Like all the charts and reports, you can easily fine-tune it to show information based on the individual sales rep, team, or territory.

For more information on exceeding Year-End targets, here’s an article we produced specifically on Q4 Sales Strategies

 

Sales Rep Conversion Rates

The Target Tracker captures the opportunity conversion rate for each salesperson.

The conversion rate dashboard chart shows the win-rate by value and number of opportunities. These metrics are highly-valuable for identifying training and development opportunities.

Measure Sales Performance Versus Target

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Section 3

Tailor the Target Tracker to your business

Here are some of the ways to can adapt the GSP Target Tracker to the specific needs of your business.

  • Monthly, quarterly, or annual sales targets.
  • Use a custom field instead of the Amount.
  • Exclude certain types of opportunities from the target roll-up.
  • Modify the reports and dashboards based on your sales structure.

We explain each one below.

Incidentally, if you have a business need that we haven’t listed here, then what you should do is very simple: get in touch to talk to us about it.

 

Monthly, Quarterly or Annual Sales Targets

By default, the Target Tracker uses monthly sales quotas. Remember, reports and dashboard charts can summarize monthly targets for each quarter and year.

However, you can instead set the Target Tracker to use quarterly, or even annual quotas, if that’s how sales performance measures work in your business.

It’s a simple process to make this change. We explain the steps very clearly in our setup guide.

 

Use A Custom Field Rather than Amount

Not all companies use the Amount field on the opportunity to measure the size of a deal.

For example, Annual Recurring Revenue (ARR), Monthly Recurring Revenue (MRR), and Margin are all examples of fields that represent the value of a deal.

In these cases, it’s the value in the custom field that must be compared with the sales target.

The Target Tracker can do this.

We need to adjust some settings within the app and modify the reports and dashboards. We offer a free service to make these changes for you. Simply get in touch, and we’ll identify what you need.

 

Exclude Certain Types of Opportunity

Sometimes, not all opportunities should count against the sales target.

For example, perhaps renewal opportunities are not included in measuring sales versus target.

You can do this quickly in the Target Tracker. All you need to be able to do is set up a workflow rule in Salesforce. Again, we explain step-by-step how to do this in the setup guide.

 

Modify the Salesforce Target Dashboard

Many sales teams organize by territory, region, or another segment.

However, the pre-built reports and dashboard charts measure sales versus target for all salespeople. In other words, the charts are at the company level.

That’s because we can’t predict or foresee how each sales team is setup.

Fortunately, that’s no problem. You can easily modify the standard reports and dashboards to reflect your sales team structure. Simply create a copy of the report (using the Save As function) and adjust it based on the sales team organization in your business.

Section 4

How to buy the GSP Target Tracker for Salesforce

Here’s how to take a free 14-day trial of the Target Tracker. You can try it for yourself to see the sales management benefits your business.

All you need to do is visit the AppExchange Listing for the Target Tracker.

Click the Get It Now Button and follow the instructions. 

From the Listing you can also:

  • See what other people think about the app.
  • What a video showing how the app works. 
  • Set more screenshots showing the Target Tracker in action.
  • Read the setup guide.

Don’t delay, take a trial today!

 Any other questions about the GSP Target Tracker?

Get In Touch Below

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How Expected Revenue Delivers Reliable Sales Forecasts (2020)

How Expected Revenue Delivers Reliable Sales Forecasts (2020)

Expected Revenue delivers a reliable forecast of future sales in many companies.

It’s a sales forecast you can defend in front of the board.

Unfortunately, however, some executives dismiss Expected Revenue in Salesforce as irrelevant.

That’s a pity because not having an accurate revenue forecast is the bane of many sales managers’ lives.

After all, your gut instinct won’t cut it.

Nor will a top-down percentage applied across all open opportunities due to close this month.

However, when used correctly, Expected Revenue delivers a sales forecast report that stands up to detailed analysis and scrutiny.

Nevertheless, here’s the rub with Expected Revenue.

If the Opportunity Probabilities are wrong, then so is your Expected Revenue report.

And unfortunately, Opportunity Probabilities ARE usually wrong.

Here’s why:

They are inaccurate because, in most Salesforce implementations, the probability links directly – and only – to the Opportunity Stage.

As such, the probability reflects how far the Opportunity is through the sales process. However, that doesn’t say anything about the chances of winning the deal.

Fortunately, you can reduce the dependency upon the Opportunity Stage. It’s even possible to set opportunity probabilities automatically, based on proven historical evidence.

If you do this, then the Expected Revenue report is a realistic revenue forecast and a key sales performance indicator.

Let’s dive in.

 

What is Expected Revenue?

Expected Revenue is the Opportunity Amount multiplied by the probability. That gives a dollar value for each Opportunity.

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

Whatsmore, using Expected Revenue you can measure sales targets at the rep, team, and company level. This analysis tells you whether you have enough pipeline coverage to hit your sales quota.

Consequently, decisions that drive sales team behavior are better informed.

For example, if the Expected Revenue is higher than the sales target, then focus heavily on closing the remaining pipeline deals.

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

 

How is Expected Revenue different from Weighted Pipeline?

The Weighted Pipeline is the value of each open Opportunity multiplied by the probability of successfully winning the deal. Expected Revenue includes the Weighted Pipeline plus won deals at 100% probability.

The two concepts are, therefore, related. Expected Revenue includes won and pipeline opportunities, whereas the Weighted Pipeline refers to open deals only.

If you want to predict your sales revenue for the month, run an Expected Revenue report. Alternatively, if you’re focusing on the funnel only, run a pipeline report.

 

Why is Expected Revenue sometimes dismissed?

Here’s the view some sales executives take:

Deals are binary. The outcome of each Opportunity is a win or a loss. You win the full value of the Opportunity, or you win nothing.

Expected Revenue, these managers say, is irrelevant because it doesn’t reflect this binary result. Instead, the Expected Revenue report includes a figure for each pipeline opportunity, that will never materialize.

For example, let’s say you have a pipeline opportunity for $1,000. If you win the deal, it’s worth $1,000. Alternatively, if you lose the deal, it’s worth zero.

However, the Expected Revenue report will include a figure for this pipeline opportunity somewhere between $1 and $999, depending on the probability. Whatever the number is, it’s not an amount the customer is ever going to pay.

But wait a moment.

 

Why is Expected Revenue a powerful metric?

Let’s say you have 50 deals due to close next month or this quarter.

You know you will win some and lose some.

But here’s the problem:

Unfortunately, you don’t know which you will win and which you will lose. Crystal balls, after all, are in short supply.

However, suppose you knew this information in advance. Then you would do two things.

First, your sales forecast will take 100% of the value of those opportunities you will win. Likewise, you will apply a zero amount for the deals that will be lost.

Second, you wouldn’t bother chasing the opportunities that you will lose, would you?

However, life isn’t like that, unfortunately. No matter how good your qualification process, we all know it’s hard to predict the outcome of a sales deal.

Nevertheless, we are still under pressure to produce reliable sales forecasts, despite the uncertainty.

Fortunately, Expected Revenue is a powerful tool for creating robust revenue forecasts. However, here’s the catch: it relies on setting realistic probabilities for each pipeline opportunity.

 

What’s the problem with Opportunity Probability?

The Opportunity Probability is wrong on many deals because it relates directly and only to the Opportunity Stage.

In other words, if the Stage moves forward, the probability automatically increases. That happens irrespective of whether your chance of winning the deal has increased.

An example:

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. So far, so good.

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

The chance of any sales team winning the deal has not changed. There are four of them left. So, all things being equal, each still has a 25% chance of winning.

However, in each company, the Expected Revenue of the deal has increased. And the combined Opportunity Probability has also increased – to 120%.

That doesn’t make sense, of course.

What does this mean?

It means that to produce a reliable Expected Revenue report, we need a better way to estimate opportunity probability.

Awesome Pipeline and Sales Performance Visibility

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What is the probability of winning a sales deal?

For any company, the probability of successfully closing an Opportunity depends on many factors.

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

Nevertheless, one factor common to most businesses is this: whether you are selling to a new or existing customer.

Usually, the chance of winning a deal is significantly higher with an existing customer, compared to a new prospect.

However, in most Salesforce implementations, the Opportunity Stages are common to both new and existing customers. Consequently, the opportunity probabilities are identical for any given stage.

That contradicts what we know – that the probability is normally higher for deals with existing customers.

So here’s what you do.

Manually adjust the opportunity probability.

Not many people realize you can do this. That is, override the opportunity probability associated with each Stage.

Nevertheless, if you take this simple step, then opportunity probabilities will be more accurate. As a result, your Expected Revenue report will be more reliable.

Next time you do a pipeline review or conduct a salesperson one-to-one, check that where appropriate, the opportunity probabilities reflect your best judgment on the likelihood of winning the deal. In other words, use human judgment to update the opportunity probability.

That’s a simple step that has a high impact. You can, however, get more scientific.

 

Historic Opportunity Conversion Rates

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 ratios. We can use that to our advantage.

Specifically, we can gather information on those factors that help us set realistic opportunity probabilities.

In other words, by reviewing the opportunity probability from similar historical deals, it’s possible to forecast the future. That means we can predict the Expected Revenue with even more confidence.

 

New versus Existing Customer conversion rates

For example, look at the report and dashboard table below.

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

The report and chart provide information about conversion rates for existing versus new customers. Specifically:

  • 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 passed through the same Stage for new customers.
  • 76% of Opportunities with existing customers that entered the “3. Proposal Made” Stage closed successfully. This compares with 65% of Opportunities that went into this Stage for new customers.
  • 92% of Opportunities with existing customers that entered the “4. Negotiation” Stage were won. This figure compares with 79% of Opportunities that entered this Stage for new customers.

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

This information is an excellent starting point for creating accurate Expected Revenue forecasts.

 

Salesperson conversion rates

Now, let’s consider the difference in opportunity 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. You can see this in the “1 Prospecting” row.

Look at other rows in the report. They tell us the Opportunity Conversion rate 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 Reports

Our customers use the information in these reports to calculate the 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.

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

That figure automatically enters our custom Opportunity Probability field. Now the Expected Revenue becomes $7,050.

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.

In other words, a realistic Opportunity Probability, based on historical conversion rates, automatically populates for each Opportunity. Consequently, this produces a more realistic (and in this case, higher) Expected Revenue.

 

Accurate Forecasts Using Expected Revenue

Expected Revenue calculates by multiplying the opportunity probability with 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 also 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.

Accurate Expected Revenue reports mean accurate sales forecasts.

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

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Nothing is more useful to a sales manager than a pipeline report and dashboard chart that gives full visibility of the funnel.

That’s why this article has everything you need to know about the best sales pipeline report and dashboard chart to deliver funnel visibility in Salesforce.

I’ll explain how the report and chart look. I’ll also show you how to get both items into your Salesforce environment quickly and easily.

And most importantly of all, I’ll demonstrate EXACTLY how to use the report and chart to achieve accurate revenue forecasting and robust pipeline management.

Bottom line:

If you want to get more benefits from Salesforce dashboards, you’ll love this pipeline report and chart. It’s my favorite in our 12 Must-Have Salesforce Dashboard Charts.

Don’t have time to read the whole article right now?

No problem, download the PDF by completing the form below.

Here’s what we are talking about:

The Best Pipeline Report and Dashboard Chart

The Pipeline by Month and Opportunity Stage report is the best tool for accurate forecasting and effective sales management. It shows the value of Opportunities due to close each month. Within each month, the report splits the amount by the various Opportunity Stages.

Consequently, the report provides essential information for accurate forecasting, managing the sales pipeline, and tracking sales versus target.

Here’s what it looks like on a Salesforce Lightning dashboard chart.

We can see, for example, $60,000 of the pipeline is due to close in October. Of that, $11,000 is in the Negotiation Stage.

Drill down from the chart to see the exact numbers in the pipeline report:

If you’re using the Salesforce Classic interface, then the pipeline chart is going to look pretty similar:

However, in Classic and Lightning, Salesforce reports are often built differently. As a result, the Classic pipeline report might look like this:

In other words, in Classic, the months usually go on the horizontal axis. Lightning prefers them vertically.

Nevertheless, although the reports look slightly different, the principles of using the information to achieve robust pipeline visibility and accurate revenue forecasting are precisely the same.

How to get this pipeline report and chart

You might be thinking:

How do I get my hands on this pipeline report and dashboard chart?

You have two options.

1. Build it yourself. Use a straightforward Opportunities report, grouped by Stage, displaying the Amount field.

2. Install our free GSP Salesforce Dashboard. You can download it from the AppExchange Listing. The dashboard contains all 12 of my recommended Salesforce sales pipeline charts and reports.

So, no excuses for not having this pipeline report and chart at your fingertips. 😊

Impressive Pipeline and Sales Performance Visibility

Download the FREE Dashboard from the AppExchange today

How to use the pipeline report in the current month

Let’s assume it’s the middle of October right now. Also, let’s say our average sales cycle is three months or thereabouts.

What do the report and charts tell us?

We can see that in our current month (October), there’s $60,000 of Opportunities due to close.

Furthermore, this value splits by the various Opportunity Stages. In Salesforce, hover over each stage for additional detail.

As a sales manager looking at my October projected revenue, I want to know: just how robust is the October pipeline?

Here’s what to do. Expand the report so that it shows the names and owners of the individual opportunities. Click Edit on the report, then check the Detail Rows option.

Think about the deals in each stage.

For example, those deals that are in Prospecting:

If our average sales cycle is three months, you need to be confident those deals will close this month.

Ask yourself, should some of these opportunities be at a more advanced stage? Do the close dates need to be moved to a later month? Have the close dates on some of these opportunities already slipped from one month to another?

That’s because if the answer to any of these questions is yes, it means you do not have a robust pipeline nor an accurate forecast for the current month.

The same with the Investigation and Proposal Made stages. Are we going to close these opportunities this month? If not, then it means our October pipeline is significantly over-inflated.

Here’s something that happens time and again with deals due to close in the current month. They slip from one month to the next.

This post isn’t an article on how to manage that problem, but this is.

You might want to bookmark it to read later.

Or watch this video on pipeline quality metrics.

Key point:

Go through the deals due to close this month and make sure the opportunities are at the right stage and have a realistic close date.

December pipeline strength

Let’s look at another month in the sales pipeline chart: December.

What about those deals in the Negotiation stage?

Are they at the correct stage? If so, is it going to take us three months to close these deals? Is there anything we can do to bring them forward?

Looking at the December pipeline report here’s what I notice:

There’s a lot of funnel due to close at the end of the year.

Are these deals in December because the financial year of many customers ends that month? If so, we can legitimately expect many deals to complete in the run-up to Christmas?

Likewise, see if any of the opportunities closing in December been sitting in the pipeline for a long time.

For example, were salespeople under pressure earlier in the year to boost the size of the pipeline? If so, salespeople may have entered December as the close date on the basis that (hopefully) the opportunity is “bound to close sometime during the year.”

If that is the case, it means the December pipeline is nowhere near as reliable as we hope. So take a hard look at it.

Tip: this blog post explains how to get pipeline metrics that reveal how long the deal has been open and the number of days since the last opportunity stage change. Use these metrics to identify opportunities that have an increased chance of slipping to another month.

January pipeline strength

The sales pipeline chart shows there’s a dip in the size of the funnel in January.

Perhaps this dip is due to a legitimate seasonal variation. Alternatively, maybe it’s right to expect a slow start to the new year.

On the other hand, is it something about which we should be concerned? The pipeline report may be telling us we may need to start organizing marketing campaigns now, to boost the pipeline three or four months from now.

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Deals due to close in earlier months

Let’s stick with our assumption that right now, we’re in the middle of October. Consequently, what are these deals doing here on the sales pipeline chart? These, closing in September.

Unless you have a time turner, those deals aren’t going to close in September.

But we see this very often. In other words, open opportunities with close dates in the past. Either those deals are closed, and the opportunity stage is not up to date. Or, the close date needs to move because the opportunities are still open.

Unfortunately, both circumstances mean the pipeline forecast is not accurate.

A case in point:

Colin Parish, VP of Sales at Moderna, downloaded the GSP Sales Dashboard from the AppExchange. However, Colin’s pipeline report didn’t look like our beautiful example.

That’s because Colin’s funnel was full of opportunities with close dates in the past. It’s such a common problem we gave it a name: The Bedraggled Washing Line Pipeline Report.

See what I mean?

Fortunately, there are five things you can legitimately do if your best pipeline report looks like a bedraggled washing line:

  1. Go through the opportunities one by one yourself and update them.
  2. Get salespeople to update their opportunities.
  3. Update all the opportunities to Closed Won or Closed Lost en masse.
  4. Mass update all opportunities with close dates in the past to a future date.
  5. Sweep the problem under the carpet.

Yes, you read that last one right.

I explain exactly why and when you should use each course of action in this post:

Don’t Let Your Best Pipeline Chart Look Like a Bedraggled Washing Line

Don’t hog it, get your team using the best pipeline report

The sales pipeline chart and underlying report give sales managers robust visibility of the funnel. It does this in a meaningful and useful way.

However, like any other pipeline report, it doesn’t just need to be visible to managers.

Salespeople can manage their pipeline using this same pipeline chart. Filter the report to show ‘My Team’s Opportunities.’ In other words, the pipeline report contains the opportunities belonging to each team member.

Tip: check that your Role Hierarchy is accurate to make sure My Team reports show accurate pipeline information. That’s because Salesforce uses this configuration feature to define what My Team means for each person.

Now, each team member can take responsibility for managing their pipeline.

Best sales pipeline report video

In the video below, I demonstrate exactly how to use the sales pipeline report and the dashboard chart.

Create the Opportunities by Close Date and Stage report

Remember, you can install the GSP Sales Dashboard from the AppExchange. That’s the quickest way to get the Pipeline by Close Date and Stage report and dashboard chart. You will, of course, get all the other pipeline reports we recommend as well.

Related Sales Pipeline Blog Posts

Want even more pipeline visibility? Try these blog posts:

Awesome Pipeline and Sales Performance Visibility

Download the FREE Dashboard from the AppExchange today

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3 Killer Pipeline Quality Metrics That Highlight When To Be Skeptical

3 Killer Pipeline Quality Metrics That Highlight When To Be Skeptical

Often skepticism is deserved when it comes to pipeline quality and the accuracy of the revenue forecast for this month.

That’s because deals that we assume will close this month, sometimes slip to the next month.

That’s painful if it’s unexpected.

Of course, in an ideal world, we can confidently rely upon every opportunity that is due to close this month.

In that world, close dates are always accurate. Customers sign agreements when we expect. Moreover, this months’ revenue forecast is invariably spot-on.

Unfortunately, life is not that simple.

It’s inevitable that sometimes deals slip. Often through no fault of the salesperson. It’s just the way life is.

However, that means we need pipeline quality metrics to help us decide which opportunities to question. These metrics highlight which deals we can be confident will close this month and which we should examine more deeply.

In other words, these funnel metrics tell us the pipeline opportunities about which we need to be skeptical.

They highlight when you should ask questions about deals due to close this month or quarter.

Impressive Pipeline and Sales Performance Visibility

Download the FREE GSP Dashboard from the AppExchange today

Pipeline quality metrics

The challenge is to use pipeline quality metrics to identify deals that have a high risk of slipping.

These are the deals that you need to question.

Sales managers should ask about these deals when tracking sales versus target. However, salespeople should also use these pipeline quality metrics to scrutinize and self-manage their pipeline.

These are the three key pipeline quality metrics:

  1. Number of Close Date Month Extensions.
  2. Number of Days since the last Stage Change.
  3. Number of Days the Opportunity has been Open.

No single pipeline quality metric dominates the others. Use the metrics in conjunction with each other.

Working together, these are the three pipeline quality metrics that highlight deals that have a high probability of slipping.

Bottom line: use these pipeline quality metrics to get a more robust sales forecast.

 

Robust Sales Forecast

The pipeline quality metrics allow you to accurately assess whether you have enough reliable deals to meet your sales quota. That’s because they help you identify the dormant deals that are over-inflating your sales funnel.

Think about it for a moment:

Let’s say your average sales cycle is three months.

You have a deal due to close this month. It’s making an essential contribution to your revenue forecast.

Now, suppose the Close Date has already slipped from one month to another four times. It’s in the final Negotiation Stage, but it’s been there for over two months. The Opportunity has been open a total of 180 days.

You’re probably right to question the close date of this month. It’s potentially a deal that should not be in your sales forecast for this month.

 

Displaying the pipeline quality metrics in dashboards

Here’s an example of these pipeline quality metrics on a single salesforce dashboard table.

In our example, the table shows deals that are due to close this month. However, the period can be anything you choose.

The key message is that these pipeline quality metrics are an excellent way to gauge the reliability of your revenue forecast for the period.

Watch this video to see me demonstrate the pipeline quality metrics in a salesforce dashboard.

Pipeline quality metric #1 – Number of Close Date Month Extensions

There’s a statistically robust way to forecast tomorrow’s weather.

Whatever is happening today, predict that’s what the weather will be like tomorrow. You’ll be right more often then you are wrong.

It’s the same with opportunities. If a deal slipped last month, there’s an increased chance it will move again this month.

The Number of Close Date Month Extensions gives us this data. This pipeline quality metric counts the number of times the Close Date has slipped from one month to another.

Close Date changes within a month don’t matter. Nor do changes that make the Close Date earlier. This metric tracks how often the opportunity Close Date has moved from one month to another month.

 

Pipeline quality metric #2 – Days Since Last Stage Change

This pipeline quality metric counts the number of days since the Opportunity Stage was last updated.

Life is not linear. Opportunity Stages don’t change at regular, pre-determined intervals. However, a lengthy period without a change – in the context of your average sales cycle – is a sign of a dormant deal.

Let’s say the Opportunity Stage hasn’t changed for a significant period. The deal has slipped from one month to another month several times. Then you are probably right to question the close date of this month.

 

Pipeline quality metric #3 – Number of Days Open

This pipeline quality metric counts the number of days that the opportunity has been open. When the deal reaches Closed (Won or Lost), the clock stops ticking.

This pipeline quality metric is valuable in its own right. Nevertheless, the primary purpose is to put context into the other quality metrics.

Deals that have had a significantly longer than average sales cycle have a lower chance of closing successfully this month. Particularly if the opportunity has already slipped from one month to the next several times. Of course, that’s especially true if it’s quite a while since the deal was last updated.

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Pipeline quality metrics underlying report

Here’s the underlying report that shows the three pipeline quality metrics for all opportunities due to close this month. Click on the image of the report to enlarge it.

We added conditional highlighting to the report to help focus the eye on the deals we might want to question.

In our case, for example, three or more Close Date Month Extensions are shown in red and two in amber. One or zero values for this pipeline quality metric are not highlighted.

If you download our free GSP Sales Dashboard from the AppExchange, then you can set the conditional highlight to whatever values you choose. Set threshold values that are right for your business.

The report shows the pipeline quality metrics for all the deals due to close this month, grouped by Opportunity Stage.

It also separates the opportunities into those relating to new customers – and those for existing customers.

This separation is because – as a rule of thumb – deals with new customers will take longer and can be subject to more uncertainty than deals with existing customers.

To emphasize, it’s not about one single pipeline quality metric. It’s about understanding the context. However, the report and dashboard chart draw the eye to the deals about which you might need to question.

To demonstrate, let’s take some examples from our report. Remember, each of these opportunities is due to close this month in the sales forecast.

 

Green Brothers

This Opportunity is in the Prospecting Stage, which immediately makes me nervous about whether it will close this month. (We’re assuming here, of course, that the opportunity is in the correct Stage and that there isn’t a case of sandbagging going on).

The Number of Days Open and Number of Days since Last Stage Change are the same because the opportunity has not progressed from the date it was first opened.

The opportunity hasn’t slipped from one month to the next. However, given that this is a new customer and the opportunity Stage hasn’t advanced, I’m doubtful the deal will close this month.

One that has a good chance of slipping, I’d say.

 

Greengate Hotel

The deal has slipped once already. It’s been open for over two months. We’re still only in the Investigation Stage and it’s due to close this month.

The opportunity is for a new customer. Again, another one to question. At least as far as a successful close this month is concerned.

 

Brown Estates

The opportunity has been in Customer Evaluating for over two months. The Close Date has twice moved from one month to another. Presumably, at some point, the salesperson thought it will close long before now.

This deal is for an existing customer. On the face of it, that gives us more confidence the deal will close successfully.

What do we know about Brown Estates? Are they a high-quality customer that has purchased from us many times before? How long do they usually take to make a decision? Do we have a relationship with the customer that allows us to have a straight dialogue about whether the deal will close successfully this month?

The answers to these questions may give us assurance the deal is likely to close this month. Again, it’s a matter of context. However, overall, the pipeline quality metrics may make me doubtful about including this deal in my revenue forecast.

 

Guilderland Court

Take a look at the pipeline quality metrics on this one.

The deal has been open for four months and the opportunity has moved from one month to another four times. It’s for a new customer and has sat in the Negotiation stage for over two months.

I’m certainly questioning this one!

 

High Hill Estates

Does this deal look better? Quite possibly.

The deal is 48 days old. The Days Open pipeline quality metric alone might make me doubtful about the close date of this month if our average sales cycle is 90 days. On the other hand, it’s for an existing customer, so a shorter sales cycle is a reasonable possibility.

The opportunity hasn’t slipped from one month to another. It was updated to Negotiation 4 days ago. If I look at the opportunity itself, are there planned actions that will expedite the negotiation? As the sales manager, do I know our trading history with High Hill Estates? Based on previous experience and my knowledge of the context of the deal, am I confident in the close date?

 

Install the pipeline quality metrics

You don’t have to create these pipeline quality metrics yourself. There’s a much easier way:

Install the GSP Sales Dashboard from the AppExchange.

The dashboard also contains 15 other components that allow managers to track the size, trend and quality of your sales pipeline. Together they give tremendous visibility of the funnel and sales performance.

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

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Many sales managers are deeply frustrated when it comes to Salesforce dashboards.

After all, dashboards are often the most compelling reason the company invested in Salesforce in the first place.

Executives expected the dashboards to give full visibility of the sales pipeline; they assumed inaccurate forecasts would be a thing of the past; and detailed metrics would highlight when and where to manage, coach, and develop the sales team.

Unfortunately, that’s not how it always works out.

Often, managers still do not have useful information on the size, quality, and trend in the sales pipeline. Consequently, their ability to manage and coach effectively is restricted.

Likewise, they cannot look back at historical sales metrics to gain insight that guides improvement in future sales performance.

Here’s another thing:

In many performance reviews and sales team meetings, more time is still spent arguing about the numbers than discussing how to increase revenue.

However, if you’re looking for practical advice on Salesforce dashboards, then you’ll love this blog post.

We’ve also recorded a webinar where we covered the same topic. You can find that webinar recording just below.

Recorded Webinar | 12 Must-Have Sales Dashboard Charts In 2019

Salesforce Dashboard Template

This article has examples of the 12 charts that should be on every sales manager’s Salesforce dashboard. It’s a dashboard-lovers template for success.

These dashboard charts (together with their underlying reports) deliver tremendous visibility into the sales pipeline and sales performance.

Moreover, I give examples of how to use the information in a practical way to drive sales improvement.

Not only that:

For each dashboard chart, I also point you to a dedicated blog post I’ve written.

Each of these supporting posts gives additional in-depth information and a video demonstration.

By the way, in the interests of brevity, I’ve ignored variants of these charts.

These variations can provide extra insight for your business by analyzing sales performance by product, campaign, territory, and customer type.

In other words, these twelve recommended charts are a Salesforce dashboard template. Use this template as a building block to create your organization-specific dashboard and reports.

With that, here are the 12 must-have Salesforce Dashboard charts I recommend:

12 Recommended Salesforce Dashboard Charts

1. Closed Won Opportunities by Month.
2. Pipeline Deals by Close Date and Opportunity Stage.
3. Traditional Funnel Chart.
4. Top 10 Pipeline Customers and Prospects.
5. Long-term Pipeline Trend.
6. Open Opportunities by Created Date.
7. Pipeline Quality Metrics.
8. Opportunity Conversion Rates / Win Rates.
9. Average Size of Closed Won Deals.
10. Completed Activities per Salesperson.
11. Leaking Funnel Report.
12. Sales Performance versus Target.

Let’s start.

Awesome Pipeline and Sales Performance Visibility

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1) Closed Won Opportunities by Month

We all want to know the figure for sales revenue won in the year.

That’s what the Closed Won Opportunities by Month dashboard chart tells us. It shows how much sales revenue the company achieved during the financial year.

In this example, the dashboard chart and underlying report summarize the information by each salesperson. If you have a larger sales organization, then group the chart by team, country, or territory.

The dashboard chart and report deliver essential insight into sales performance.

In our example, Dave Apthorp is consistently the top performer. Sarah has improved her performance after a poor start to the year. Peter, in particular, needs help to boost his performance.

Combine this information with your knowledge of each team or individual. Do this to get a quick overview of sales performance across the company.

Then use the rest of the dashboard template (for example, conversion rates, average deal size) to determine specific coaching and management actions.

Watch this video for a demonstration of the Closed Won Opportunities Dashboard Chart in action

Link to video demonstrating how to use the Closed Won Opportunities salesforce dashboard chart.

 

 

More blog posts related to the Closed Won salesforce dashboard chart:

10 Illuminating Ways To Measure Closed Won Deals. Examples of other ways to analyze historic sales performance.

Of course, the Closed Won Opportunities by Month dashboard chart doesn’t tell us anything about future revenue performance. That’s where the next pipeline chart I recommend comes into play.

Here it is:

 

2) Pipeline Deals by Close Date and Opportunity Stage

If you decide to use only one Salesforce dashboard chart to manage the sales pipeline, then make it this one.

That’s how useful it is.

The chart shows the value of opportunities that are due to close each month. Within each month, we can see the deals in terms of the opportunity stage.

Stacking the chart by opportunity stage gives visibility of the overall size and health of the funnel.

The Pipeline Opportunities By Close Date and Opportunity Stage dashboard chart delivers vital information needed to manage the sales funnel. Sales managers and executives can use this chart to assess the size of the pipeline and to begin forecasting future revenue.

This dashboard chart also tells us whether the pipeline is sufficiently mature this month and next month to achieve revenue targets. Consequently, managers and salespeople have an early warning that highlights when remedial action is necessary.

For example, let’s assume we are in January right now.

There’s a substantial amount of pipeline due to close this month that is still in Prospecting and Investigation. If, for example, our typical sales cycle is three months, are we confident these deals will close in January? Are they at the right Opportunity Stage? Should these opportunities be scheduled to complete in a later month?

Also, what about the deals in April that are in the Negotiation Stage? Is it going to take four months to close these opportunities? Maybe. Alternatively, are there steps we can take to bring these deals forward?

 

Pipeline By Owner

Here’s an incredibly useful variant of this dashboard chart: Pipeline Opportunities by Close Date and Owner.

You can use this chart to zone-in on the opportunity owners with most deals due to close this month.

Whatsmore, use the summary by opportunity owner to identify teams and salespeople that have a pipeline shortfall in the medium and longer-term.

I explain how to use this chart and report in this video:

Link to video demonstrating how to use the Opportunities by Close Date and Month salesforce dashboard chart.

 

Also, here are not one, but two blog posts with much extra information.

If You Only Create One Dashboard Chart Make It This One gives many examples of how to use this essential chart and report.

Some readers will also need this post:

Don’t Let The Best Sales Dashboard Chart Look Like A Bedraggled Washing Line. It explains the steps to take when out-of-date pipeline opportunities make it impossible to get accurate funnel visibility.

Now, what do you think about the traditional funnel chart?

 

3) Sales Funnel Chart

I believe the traditional sales funnel dashboard chart is relevant to look at – once a week.

Therefore it should be on your dashboard. However, here’s the thing about this chart:

The shape never changes.

That makes it hard to interpret.

It doesn’t matter how big or how small your pipeline is. The outline funnel will always be the same size and shape on your Salesforce dashboard.

So why bother with it?

Well, the answer is because of the value of the information the segments within the funnel give you.

Perfect Funnel Shape

If the sales funnel is in perfect shape, the value of the pipeline in each segment gets progressively smaller.

However, that’s not always the case.

Many Sales Funnel Shapes

Look at the example below. The $ value of deals in the Investigation stage is less than the $ amount of opportunities in Proposal Made. In other words, the later opportunity stage has more pipeline than the earlier stage.

Look also at the Prospecting Stage. Should it be larger? Is the funnel lacking early-stage opportunities?

In other words, the chart is warning that our pipeline may be out of kilter.

Potentially we need to initiate marketing campaigns to boost the size of the early-stage funnel. We may also need to examine our qualification and investigation processes to move deals more effectively through the sales cycle.

Is the shape of the sales funnel chart in your business a cause for concern? If it is, there’s probably no immediate quick-fix. You need to take steps that require thought, preparation, and planning.

That’s why it’s imperative to look at the traditional funnel dashboard chart once a week.

Link to video demonstrating how to use the sales funnel salesforce dashboard chart.

 

Want to learn more? Use this blog post to review four power charts that focus on dashboard size.

Big is Beautiful: 4 Easy Charts To Measure Pipeline Size.

Next up: which customers and prospects should we prioritize?

4) Top 10 Pipeline Accounts

In most companies, salespeople can immediately name their two one or two prospects.

However, what about the top 5? Or the top 10?

This Salesforce dashboard chart shows the customers and prospects ranked by total pipeline.

This information helps managers and salespeople prioritize their time and attention. It means salesperson effort, time and other resources are focused on areas where they are likely to have the most significant impact.

Displaying the information on a dashboard table is an excellent way of focusing attention on the top Accounts. Limit the dashboard table results to the top 5, 10, or 15. Then on the underlying report, list all Accounts with Open Opportunities.

In our example, High Hill Estates has the highest value of sales pipeline. Indeed, it has twice as much funnel as the next nearest Account.

Are we proactively managing the relationship with this critical customer? For example, is there a robust account management plan in place? Do we understand their buying process? Have relationships been established at multiple levels?

Indeed, if the CEO has time to visit only one prospect, let’s make it this one.

The underlying report shows the constituent Opportunities for each Account. Can a single, large-scale deal be done if the report reveals the total figure for High Hill Estates consists of multiple, separate opportunities?

In short, the Top 10 Pipeline Accounts dashboard table and report provide the essential information that helps executives prioritize the companies’ sales, account management and business development activities.

Top Accounts At Each Level

Don’t forget:

like any other dashboard chart you can replicate the table for each territory, team and individual salesperson. Therefore, the report is a practical tool for focussing attention on critical customers and prospects throughout the company.

Link to video demonstrating how to use the Top 10 Accounts salesforce dashboard chart.

 

 

 

After you have reviewed the dashboard table in your company, take a look at these two blog posts:

How To Build Key Account Plans In Salesforce. Step-by-step advice on delivering a structured approach to account management in Salesforce.

Stop Guessing, Start Measuring Key Accounts. Reports and salesforce dashboard charts that measure account performance.

Now, let’s look at something different:

 

5) Long-Term Pipeline Trend

The Salesforce Dashboard pipeline charts we’ve looked so far describe the funnel as it stands right now.

However, what about the trend in the size of the sales funnel over time? Is the pipeline getting bigger or smaller?

The Sales Pipeline As-At dashboard chart gives us the answer.

It measures the size of the pipeline on the 1st of each month. As such, it shows the long-term trend in the size of the sales pipeline.

Grouping the information by the Historical Stage gives additional insight into the make-up of the sales pipeline. It allows us to understand the overall trend by Opportunity Stage.

In our example, the pipeline has been growing over recent months. This trend is mainly due to a significant increase in deals in the Prospecting Stage.

That’s good news.

However, do we understand why it has happened?

We should also investigate why the size of the pipeline in the Customer Evaluating and Negotiation Stages has declined. Are the sales team having trouble moving deals through the sales process? Was the pipeline created over the last few months of the right quality?

The As-At Long-Term pipeline chart and report give the big picture. In other words, they tell us whether efforts to grow the pipeline in the long-run are successful.

Link to video demonstrating how to use the Pipeline Trend salesforce dashboard chart.

 

For more examples of how to measure the trend in the sales pipeline over the long and short-term, use this blog post:

Measure The Trend In Your Sales Pipeline.

However, we all know that size isn’t everything. Quality matters too.

That’s why this next dashboard chart is essential.

 

6) Open Opportunities by Created Date

Here’s a simple but effective way to assess pipeline quality. It’s the Open Opportunities by Created Date dashboard chart.

The chart shows the existing funnel, summarized by Created Month and current Stage. You may also want to create a similar report and dashboard chart that displays the information by Created Month and Opportunity Owner.

The chart tells us two things. First, how much pipeline was created each month. That’s important because all other things being equal, more pipeline means increased future revenue.

Secondly, the dashboard chart is a pipeline-quality reality check.

For example, let’s say it typically takes three months to close a deal in your business. If there are a significant number of opportunities open much longer than this, then are these genuine, viable deals?

In other words, the chart and underlying report give executives the information they need to start the process of validating the sales pipeline.

In our example, let’s assume it is January 2019 and that our sales cycle is typically three months.

Those deals opened in February, March and April 2018 – are we confident they are still legitimate opportunities?

Have the Close Dates regularly shifted on these opportunities to maintain the size of the pipeline? If not, what action can we take to bring these deals to fruition?

Building New Funnel

Reviewing the pipeline by Created Date is an easy but effective way of identifying potentially dormant deals in your pipeline.

However, at the same time, it also gives valuable information on how successful we are at building the pipeline.

For example, look again at our chart.

Less pipeline was created over the last three months of the year. Should we be concerned about this? Perhaps it’s due to the sales team focussing on closing existing deals before the end of the year.

On the other hand, it may be an early warning that we do not have enough pipeline to meet our sales targets in Q1 2020.

Either way, we may need to commence marketing and business development initiatives to correct the trend.

Link to video demonstrating how to use the Open Opportunities by Created Date salesforce dashboard chart.

 

 

 

Here’s the blog post you need to discover more about using the Opportunities by Created Date dashboard chart:

How To Tell If Your Sales Funnel Is Emitting Warning Signals. salesforce dashboard charts that indicate the pipeline may contain ageing deals of low quality.

Now it’s time to dig deeper into pipeline quality.

We love to talk about your ideas, so get in touch!

Just fill in the form on our Contact Us page

7) Pipeline Quality Metrics Table


If you want to predict tomorrow’s weather here is the most statistically reliable way to do it.

Whatever the weather is like today, forecast that is how it will be tomorrow.

It’s the same with sales deals.

Deals that are stuck today will probably be stuck tomorrow. Opportunities that slipped last month are the ones most likely to move this month.

Here are three pipeline quality metrics that are a barometer for managers and salespeople.

1. Close Date Month extensions. Counts the number of times the Close Date on each opportunity has shifted from one month to another.

2. Days Since The Last Stage Change. Tracks days since the opportunity stage was last updated.

3. Days Open. Counts the days the opportunity has been open. Stops counting when the deal is Won or Lost.

Display the information in a dashboard table. In our example, we show the metrics for the top 10 deals due to close this month, ranked by the number of days they have been open.

Using The Pipeline Quality Metrics

There’s high impact information in this table.

That’s because the dashboard table is a powerful way to rapidly identify deals due to close this month that need scrutinizing.

Are we relying on deals that have already shifted several times to hit our sales quota this month? How confident are we that each opportunity will not slip to another month again?

Likewise, for those deals not updated for a long time – will the sales cycle complete successfully before the end of the month? In many cases, that will be unlikely.

Use the table to improve the accuracy of sales forecasts. The three pipeline quality metrics do not state that a deal will not close this month. However, they give you a strong hint towards deals you cannot rely on in your sales forecast.

Link to video demonstrating how to use the Pipeline Quality Metrics salesforce dashboard chart.

 

 

This blog post gives more examples of how to use these three pipeline quality metrics to identify deals that might let you down in your forecast:

3 Killer Pipeline Metrics That Highlight When To Be Sceptical.

Now, let’s talk win rates.

 

8) Opportunity Conversion Ratios / Win Rates

A small increase in Opportunity conversion rates has a disproportionately high impact on overall sales revenue.

That’s why measuring opportunity conversion ratios (or win rates) is critical.

(Report continues with later months in the chart)

The Opportunity Conversion Ratio / Win Rate chart measures the percentage win rate over time. However, it does this in two ways:
· Win Rate by Amount.
· Win Rate by Count.

Measuring the win rate in both ways means we understand whether salespeople are more effective at successfully closing higher value or lower value deals.

In our example, the win rate by $ Amount is higher in most months. In other words, we successfully closed a higher proportion of large value deals compared to smaller opportunities.

In September and October, the situation reversed. The sales team successfully closed a higher proportion of lower value deals.

Did the sales team lose focus on the higher value deals? Did we discount more heavily during these months? Perhaps we had new joiners that had less experience with large transactions?

Opportunity Conversion Rate Report

The underlying report details win rates at the individual salesperson level. This report provides crucial information for identifying coaching, training and support needs.

Nevertheless, be careful.

An over-emphasis on win rates can have unwanted consequences. You don’t want salespeople leaving opportunities out of the pipeline until they are confident a deal is on the table. Don’t encourage sandbagging, in other words.

On the other hand, don’t discourage salespeople from setting opportunities that no longer have legs to Closed Lost. You need an accurate pipeline, not one full of dormant deals that salespeople are afraid to close-out.

Link to video demonstrating how to use the Opportunity Conversion Rate salesforce dashboard chart.

 

More blog posts related to the Conversion Rate salesforce dashboard chart:

How To Use Opportunity Conversion Rates For Superior Results.

How To Measure Opportunity Win Rates Across Teams.

Now it’s time for:

9) Average size of Closed Won Deals

Research with one of our customers shows a 65% variation in average deal size between salespeople in one team.

That is a vast range.

All salespeople work in comparable territories. They’re selling the same products to similar customers.

Increasing the average deal size for salespeople at the lower end of the scale was a business development priority for this company. Addressing this issue resulted in increased sales revenue without any increase in the number of deals in the pipeline.

Many things explain variations in average deal size. These include differences in experience between salespeople, changes in the average number of products sold per opportunity and different levels of discounting by sales teams.

These are challenges our customers address successfully through training, coaching and personal development.

Nevertheless, unless you quantify this essential metric, you will lack the information needed at the salesperson level to identify the right course of action to boost revenue.

Link to video demonstrating how to use the Average Deal Size salesforce dashboard chart.

 

 

 

This blog post explains more about measuring the average deal size in Salesforce dashboards:

Why You Need To Compare Average Closed Won Opportunity Size. Additional information on using average deal size metrics to identify potential improvements in sales performance. Includes examples of how Opportunity Products can be analyzed to understand which salespeople need to add more optional or non-core products to their deals.

12 Must-Have Charts For Your Salesforce Dashboard

Download the FREE eBook from our website today

10) Completed Activities per Salesperson

Tracking the number of completed sales Activities can provide valuable insight to explain varying levels of sales performance.

Review Activity reports in conjunction with the other dashboard charts to analyze trends and variations in sales performance.

In our example, there is an upward trend in the number of Activities completed by the sales team. That’s a positive sign. Indeed, the increase in Activity volume by Sarah may be a strong reason for the improvement in her sales performance that we saw on other charts.

However, we can also see that there are variations in the number of Activities completed by each salesperson. Shaun and Peter have recorded much lower levels of activity compared to Sarah and Dave.

I recommend you measure Activity levels by salespeople in several different ways. For example, compare activity with new customers versus existing customers. Doing this shows whether the activities undertaken by salespeople are consistent with the overall sales strategy.

However, you can improve the value of this dashboard chart by making two small changes in salesforce.

Due Date and Activity Type fields

First, modify the Activity Type picklist to values that suit your business. I also recommend making this field mandatory. This way, you get additional insight into the type of activities that salespeople are completing.

Second, make the Due Date mandatory. The result is that activities will always be associated with a date. Doing this is essential for producing dashboard charts that accurately count the number of activities completed each month.

Link to video demonstrating how to use the Activities salesforce dashboard chart.

 

This blog post explains how to use Activity Reports and dashboard charts to identify key accounts that need a renewed focus.

How To Spot Key Accounts You Should Be Focusing On. Now, every sales funnel leaks. That’s the nature of the game. However, you might be wondering, what’s the best way to measure pipeline leakage?

 

11) Leaking Funnel Report

The Leading Funnel report helps sales managers answer two critical questions:

First, is the funnel leaking excessively?

Second, is it leaking in the right place?

The Leaking Funnel report tells you both of these things.

The dashboard chart describes the ‘From’ and ‘To’ opportunity stage movement.

In our chart, it does this for deals set to Closed Lost in the last 120 days. In other words, it shows how often opportunities have moved to Closed Lost from each prior opportunity stage.

For example, the dashboard chart shows that eight opportunities have moved from Prospecting, directly to Closed Lost.

All other things being equal, it is good that the first opportunity stage has the highest number of opportunities that move to Closed Lost.

It implies we are qualifying-out deals we are unlikely to win. It means salespeople are not wasting time, effort and resources chasing deals when there is no clear competitive advantage.

In other words, if you’re going to lose, you might as well lose early.

However, look at the Negotiation Stage. Five opportunities went directly from Negotiation to Closed Lost.

Again – all other things being equal – that movement in Opportunity Stage is not good news.

It means we invested time and effort in moving the deal through the sales cycle, only to lose the opportunity at the last moment.

Of course, we need further investigation.

Is the shift from Negotiation to Closed Lost attributable to new versus existing customers? How does the data compare between salespeople? Does it apply only to opportunities with certain product groups?

Link to video demonstrating how to use the Leaking Funnel salesforce dashboard chart.

 

 

 

Here’s the blog post that tells you more about taking the right action:

3 Steps To Plug A Leaking Sales Funnel In The Right Place.

Which leads us onto the last of our 12 must-have dashboard charts.

12) Sales Performance versus Target

You might be wondering:

Where’s the Target tab in Salesforce?

Well, there isn’t one. That’s unfortunate because measuring sales performance against targets is a fundamental aspect of managing a sales team.

So how do you measure sales versus target or quota? There are three ways to do this in Salesforce:
· Use a gauge on a dashboard. This is included in our free GSP Sales Dashboard.
· Use the Forecasts tab.
· Use the GSP target tracker solution.

Here’s an example of the first of those options.

The dashboard gauge runs from a report that measures Closed Won opportunities. Manually calibrate the red, amber and green settings within the dashboard chart settings.

The dashboard gauge option is quick and easy to implement. The downside is that it provides no insight into whether there is sufficient pipeline to meet the sales target next month or this quarter.

Also, separate gauges are needed to track performance versus target for each salesperson and sales team for each month.

So it’s an easy but simplistic and high-maintenance option.

The Forecasts Tab is the standard Salesforce feature for target tracking. It includes the ability for managers to override their team members’ targets. Unfortunately, the Forecasts function is complex; salespeople and managers need significant training to use it effectively.

The GSP Target Tracker App is the most intuitive but most effective option. It contains easy-to-understand charts and metrics to measure sales versus target. Most importantly, it avoids the need for salespeople to create or update manual sales forecasts.

The App also allows sales managers and salespeople to quickly see whether there is enough pipeline to meet the target for this month and future months.

Link to video demonstrating how to use the Target gauge salesforce dashboard chart.

 

 

Want to know more about the three options: Here’s the blog post you need:

3 Ways To Measure Sales Versus Target in Salesforce.

Also, this post describes how to measure your pipeline versus quota:

Is Your Sales Funnel Big Enough To Make Your Revenue Target.

Measure Sales Performance Versus Target

Interested in this app? Get in touch with us today

What to do now

Here are the three things I recommend you do now:

1. Install the GSP Sales Dashboard. It’s free and it contains all the charts described in this blog post. You can customize each dashboard chart and report to fine-tune them to your business.
2. Download the eBook. After you’ve installed the dashboard go through each chart using the eBook as a guide.
3. Take a trial of the GSP Target Tracker. Measuring revenue and pipeline versus quota is critical. We make it super-easy and practical with this App.

You’ve read the blog, now watch the movie:

Recorded Webinar | 12 Must-Have Salesforce Dashboard Charts

Join Gary Smith, CEO of The Gary Smith Partnership and Senior Consultant Dan Bailey. Gary and Dan demonstrate the 12 charts in action and explain the contribution each makes to sales performance improvement and pipeline management.

Related Blog Posts

4 Ways To Measure Revenue Against Sales Targets In Salesforce

4 Ways To Measure Revenue Against Sales Targets In Salesforce

Many executives get very frustrated, trying to measure sales versus target in Salesforce. Perhaps you're one of them. Like others, you may even have searched in vain for the Targets tab. (If you're still looking, stop now; it doesn't exist). Fortunately, if you want...

How To Measure Sales Pipeline Coverage With Confidence

How To Measure Sales Pipeline Coverage With Confidence

Sales pipeline coverage measures the ratio between the dollar value of your funnel and upcoming revenue targets. For example, a sales pipeline coverage ratio of three means your total pipeline is three times your quota. In this case, you need to close 33% of the...

Popular Apps

GSP Target Tracker

Track targets in Salesforce including won and pipeline deals

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Download The 12 Must-Have Dashboard Charts

This fully-illustrated 27 page ebook shows you the 12 Killer Sales Charts for your Dashboard and explains How to Read Them and When to Use Them.

Related Blog Posts

 

If You Only Use One Sales Pipeline Chart In 2017, Make It This One!

 

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

 

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

 

Why You Need To Compare Average Closed Won Opportunity Size

Your Sales Forecast Is Probably Wrong (So I’ve Written This Guide To Getting It Right)

Your Sales Forecast Is Probably Wrong (So I’ve Written This Guide To Getting It Right)

Many sales managers struggle to create reliable sales forecasts.

In fact, many forecasts are wildly inaccurate.

Even (or especially) when the sales team is using a CRM system such as salesforce.

The trouble is gut feel just won’t cut it.

Nor will simply applying a top-down win rate to all opportunities.

Instead, what’s needed is a sales forecast that is robust and can stand up to scrutiny.

That’s because often the sales forecast is shared with the company leadership, finance, peers and back-office colleagues. Other people depend upon a reliable revenue projection to do their own jobs properly.

Being wrong, month after month, doesn’t help anyone.

That said, sales forecasts don’t need to be perfect. But in many businesses, they need – and can – be a heck of a lot more reliable than they are at the moment.

Don’t have time to read the entire Blog Post right now?

No problem.

You can download the entire “Your Sales Forecast Is Probably Wrong” eBook for free by completing the form below!

About This Guide To Sales Forecasts

This guide is the most comprehensive online resource to creating reliable sales forecasts.

In this expert-written guide you’ll learn:

• Section 1: Why sales forecasts are often unreliable.
• Section 2: How to create a sales forecast report in salesforce.
• Section 3: How to improve forecasting accuracy using three key reports.
• Section 4: Which three opportunity metrics help identify the deals most likely to slip from your sales forecast.
• Section 5: Where to get the sales forecast template, reports, dashboard charts and metrics highlighted in this guide, all for free.

So, if you’re looking to improve the sales forecasting process in your company, you’ll love this guide.

By the way:

You don’t have to be using salesforce to get tremendous value from this guide. We are experts in salesforce so naturally, that’s what I’ve used to create the examples. However, you can apply the exact same sales forecasting methods to the CRM system in your business.

We recently hosted a webinar on the same topic. There’s a recording of that webinar just below.

1.     Why Sales Forecasts Are Inaccurate

A sales forecast is an informed prediction of the revenue a sales team will achieve in a given period (e.g. the current month or quarter). It reflects the deals already won in the period plus an estimate of the sales pipeline that will close successfully in the time remaining.

But why do we go to all the trouble of creating sales forecasts in the first place?

It’s because reliable sales forecasts:

• Provide the executive team with advance information on the health of the business.
• Tell sales managers whether they have enough pipeline to meet quota.
• Help fulfilment, order processing, manufacturing and other teams to plan and operate efficiently.
• Enable finance executives to project capital requirements and cash flow with confidence.

Doubtless there are many other reasons, specific to your company.

However, in many businesses the revenue forecast is taken with a pinch of salt by the leadership team.

Often even the VP of Sales doesn’t believe them (although she wishes she could). And embarrassingly, she struggles to explain why they are so inaccurate.

 

Why many sales forecasts are unreliable

Here are the three most common reasons I’ve found that explain why many sales forecasts are unreliable.

• Deals slip from the forecast. Often this happens at the last minute. Sometimes the same deal has slipped at the last minute more than once.

Sometimes this occurs because salespeople are optimists. Deals they thought would happen, don’t.

Furthermore, in many businesses, salespeople are under pressure to maintain the size of the pipeline. Setting deals to Lost or removing them from the funnel, contradicts this pressure. Consequently, deals that no longer have legs stay in the pipeline but slip to the next month.

Unfortunately, sales forecasts are usually submitted before the month end. This means the forecast often contains many unreliable deals that end up slipping after the forecast is created.

• Deals appear out of nowhere. Sometimes this saves our bacon. Other times it simply makes the sales leader look silly.

In other words, sandbagging. Salespeople go out of their way to avoid management pressure on deals. For example, by keeping an important deal under the radar for as long as possible.

However, these deals simply don’t figure when creating the forecast.

• There’s no crystal ball that tells us which deals we’ll win and which we won’t. Or indeed when we’ll win them. After all is said and done, customer decision making is out of our hands.

If we knew in advance which deals we will win and which deals we will lose, then we’d save ourselves a lot of trouble. Unfortunately, no matter how hard we try we’re still left with customer-driven uncertainty.

Sometimes we attempt to mask these uncertainties by asking salespeople to ‘Commit’ to deals. However, that’s like asking a soccer centre forward to commit to scoring a goal. We all know he’s trying. But there’s still a chance he’ll miss (a pretty good chance if he’s the centre forward on the team I support!).

If we want reliable sales forecasts we have to address these sources of unreliability in other ways. That’s what we’ll cover in Sections 3 and 4.

Before that, let’s examine how best to create a sales forecast in CRM systems such as salesforce.

2.     How To Create A Sales Forecast In Salesforce

What’s the best way to create a sales forecast in salesforce?

Answer:

Use an Expected Revenue Sales Forecast report.

An Expected Revenue Sales Forecast report combines the revenue from Won deals with the weighted sales value from pipeline opportunities.

Sometimes the report includes filters that exclude certain deals (for example, those at a very early stage).

 

How the Expected Revenue Sales Forecast reports works

The report combines Won and Pipeline Opportunities.

For Won deals, 100% of the revenue contributes to the sales forecast.

For pipeline deals, however, the sales value of each opportunity is multiplied by the Opportunity Probability.

For example, a deal for $10,000 at 40% will have an Expected Revenue of $4,000. A Won opportunity for $20,000 will have an Opportunity Probability of 100% and an Expected Revenue of $20,000.

In other words, the Expected Revenue of any specific deal is the weighted value of the opportunity.

Incidentally, in some businesses the sales forecast does not reflect the total, gross value of the sales deal. That’s because the revenue from the deal spreads over time. The sales forecast is therefore the amount of scheduled revenue that will be achieved in the period.

If this is the case, then you need the GSP Scheduled Revenue app. However, the principles of Expected Revenue apply equally to sales forecasts based on scheduled revenue.

 

Why include Won deals in the forecast

Most sales forecasts relate to the current period; for example, this month or this quarter.

As such, the sales revenue we can expect is a combination of deals we’ve already won during the period; plus deals we expect to win.

That means we need to include won opportunities in the forecast.

 

Why use the Expected Revenue of pipeline opportunities

Some salespeople don’t like the idea of the Expected Revenue (or weighted revenue) of pipeline deals.

They argue opportunities are binary. We’ll either win it or we won’t. Take 100% of the sales value or zero dollars.

However, here’s the thing:

In any given period, you don’t categorically know which deals the sales team will win and which deals they will lose.

Let’s face it, if you knew which deals you were going to lose, you wouldn’t bother with them in the first place.

So it’s logical to take the weighted value of pipeline opportunities. That way we get a reliable total value of forecast sales.

Providing of course, the opportunity probability is reliable.

 

Entering reliable Opportunity probabilities

In salesforce, as with most other CRM systems, there’s a default Probability associated with each Opportunity Stage.

In other words, the probability is set automatically when the Stage is set.

 

Manually adjust opportunity probabilities

However, here’s something not everyone realises:

The Opportunity Probability can be manually adjusted. This is as true in salesforce as it is in all other CRM systems.

This means the salesperson can override the default probability for the Stage.

The Opportunity Probability can be manually adjusted. This is as true in salesforce as it is in all other CRM systems.  This means the salesperson can override the default probability for the Stage.

For example, the default Probability for Proposal Made might be 35%. Salesforce will automatically set this value for ALL opportunities at this Stage.

However, in reality the probability for a new customer might be lower. The probability for an existing, long-term strategic customer may be higher. So, we can manually adjust the probability when the default value isn’t appropriate.

 

Use workflow to adjust opportunity probabilities

Here’s another option.

Automatically adjust opportunity probabilities using pre-defined rules.

For example, use workflow rules to set the opportunity probability for strategic customers to 40% at the Proposal Made stage.

Naturally, you’re assuming the probabilities you pre-define in this way will be more accurate than those set by the sales team.

That may well be true for an inexperienced team. Or if you’re not confident salespeople will adjust the probability where appropriate.

 

Use the GSP Probability App

We’ve figured out how to get historic opportunity probability and velocity data out of salesforce.

In other words, we can retrospectively analyse all opportunities and calculate two things:

1. How long each opportunity spent at each stage. In other words, stage-by-stage pipeline velocity.
2. The percentage of all deals won or lost once they reached a given stage.

This is valuable information.

For example, at one manufacturing client we discovered that 23% of deals in Investigation were closed successfully for new customers. Yet for existing customers it was 33%.

Furthermore, we identified that these figures varied by +/- 6% across territories and individual salespeople.

The outcome is that in this company, opportunity probabilities are defined tightly now based on accurate, reliable historical statistical data.

This improvement led to a step-change in the reliability of sales forecasts.

If you want to measure pipeline velocity or analyse historical probability data in your company then get in touch.

 

How to get the Expected Revenue Sales Forecast report

You might be wondering:

Is there a simple way to get the Expected Revenue Sales Forecast report?

The easiest way is to install the GSP Sales Dashboard.

This free package includes all of the reports and sales metrics highlighted in our Sales Forecasting Guide.

Awesome Pipeline and Sales Performance Visibility

Download the FREE Dashboard from the AppExchange today

3.     Improve Sales Forecasting Accuracy

Three reports significantly improve the process of sales forecasting because they give robust visibility of the pipeline.

So use the information contained in these reports to achieve a step-change in forecasting reliability.

(We’ll talk about additional metrics in Section 4).

However, before we start there’s a critical prerequisite of robust pipeline visibility: unambiguous Opportunity Stages.

 

Opportunity Pipeline Stages

High-quality visibility of the sales pipeline leads to vastly improved sales forecasts.

However, in turn funnel visibility depends upon everyone understanding, and agreeing, on the meaning of the Opportunity Stages.
Unfortunately, very often that’s not the case.

In salesforce it doesn’t help that the default Opportunity Stages aren’t well understood. Nor particularly useful in many businesses.

So do two things:

First: change the Opportunity Stage picklist to values that have meaning in your business. This blog post will help you define the right values.

Second: make sure everyone understands and agrees on the meaning of each Opportunity Stage.

Those two items are critical to using the most important pipeline review chart.

 

Report 1: Pipeline by Stage and Close Date

This simple report and chart is the starting point in reviewing and analyzing a sales forecast.

That’s because what the chart and underlying report often reveal, is that any sales forecast based on the opportunities in salesforce is immediately going to be way off base.

However, get the underlying information right and you’re well on your way to a reliable forecast.

Let’s take an example.

Based on this example, here are the primary areas to investigate that improve our chances of getting a reliable sales forecast.

 

Deals with Close Dates in the past

This is a common problem.

So much so, in fact, I’ve published a blog post specifically on the steps you should take when you’re funnel looks full of out-of-date opportunities.

In this case, it’s not too bad.

What are those deals doing in previous months? Are they still open? If so, will they close in the current month? Or are they deals that are no longer viable and should be removed from the pipeline?

Addressing this is the first step to getting a reliable sales forecast for the current month or quarter.

Pro Tip

Drill down to the underlying report.

Here’s a great feature of Lightning reports in salesforce.

Click on the number within the report that you want to investigate. Now we can see the specific deals that make up the number.

Right click on the Opportunity Name to open it in a separate tab.

Update the Opportunity by changing the Close Date and / or Stage.

Repeat this step until you no longer have Opportunities with old Close Dates.

 

Deals with unrealistic Opportunity Stages

Let’s look at the current month (I’m assuming it’s May 2019 for the purposes of this demonstration).

Many B2B companies have a sales cycle of three to four months. Some much longer.

So how realistic is it that deals with an Opportunity Stage of Prospecting or Investigation will close this month?

In fact if we are mid-month (which is often when we are producing sales forecasts), then even many deals in Proposal Made may not close successfully this month.

So here’s what you do.

Same as before, look at the underlying detail.

Review the early stage opportunities. There’s three possible scenarios for each one:

1. The Close Date and Stage are accurate.

Perhaps it’s an existing customer with a strong purchasing track record that has told us he’ll definitely be ordering this month.

2. There’s a reliable Close Date but the Stage is wrong.

In other words, the Opportunity is more advanced in the sales cycle. Assuming you’re confident in the Close Date, update the Stage.

3. There’s a reliable Stage but the Close Date is wrong.

Perhaps this deal was originally anticipated to close this month. But now it’s not. Move the Close Date so that your forecast for this month is more robust.

Of course, there’s also the possibility that both the Stage and the Stage need updating.

So go through the funnel opportunities in your sales forecast and make sure you are happy with the Close Date and Stage in every case.

Pro Tip

Managers with large sales teams and / or lots of opportunities can’t go through every deal this way. One technique to avoid this is to manage by exception, using the metrics explained in Section 4.

Create a version of the Close Date by Stage report to run on My Team. Have sales leaders to go through the same pipeline validation process with their team members.

And then go a step further. Providing the Role Hierarchy is correct, when individual salespeople run the My Team report, they will see only their own deals. Train and educate each salesperson on using the report to check and validate their personal pipeline.

Unlikely funnel spikes

In many businesses there’s a determined sales drive at certain times of the year. In particular, to close deals in the last month of the financial year or quarter.

Here’s the Funnel by Close Date and Stage chart I saw recently.

Can you guess when their financial year ends?

You’re right. December. And of course that means there’s an additional quarter-end in March, June and September.

So why the spikes?

The reason is that in this business, salespeople are under top-down pressure to meet revenue expectations from internal and external company stakeholders.

Consequently, hopeful Close Dates are assigned to many opportunities. These are based not on the customer buying process, but on the desire to assuage other pressures. “It’s bound to close sometime this year, I’ll put in the year-end”.

In reality, how many deals do you know that close on December 31?

The same thing happens with the quarter-end.

The result?

The sales forecasts reflect funnels containing artificial peaks in the number and value of opportunities that will be won. Consequently, these sales forecasts are almost always unreliable.

So, review your longer-term pipeline. Validate that peaks in the value of deals to be closed accurately reflect sales effort and marketplace conditions rather than the need to satisfy non-customer stakeholders.

Otherwise?

You’re simply kidding yourself.

 

Pipeline by Created Date

Reviewing the pipeline by created date is another way to validate funnel quality.

This chart shows deals due to close this month (and therefore in our current sales forecast) by created date.

Does your sales forecast contain many deals with a longer-then-average sales cycle?

It looks like it here.

Potentially, these are deals that consistently move along in order to maintain the size of the pipeline. If you’re reliant upon these deals to meet your sales quota, you may be on wafer-thin ice.

Same steps as before.

Drill down to the underlying deals.

Assess the viability of these deals. Do this to gauge reliability of your sales forecast.

 

Conversion Rate Report

You might be wondering:

How does a report that shows opportunity win rates (conversion rates) help us assess the reliability of a sales forecast?

Well, take a look to check that historic opportunity conversion rates are realistic.

First example.

Let’s assume that in your business, instinct and experience tell you the opportunity conversion rate should be around 30%.

So, how do we explain a conversion rate report in salesforce that shows the win rate is 70%?

Two possible reasons.

 

Opportunity sandbagging

Not all deals enter the pipeline immediately. In other words, only when the salesperson is confident of a successful outcome is it entered in salesforce. It’s called sandbagging.

On the one hand, this means your sales forecast might be pessimistic. This is because there are deals out there being worked on, some of which may come to fruition. It’s simply that you don’t have visibility of them.

If this genuinely is the case, your revenue forecast is still going to be pretty inaccurate. Only this time the forecast will be too low.

And as the VP of Sales it doesn’t exactly give the impression you’re on top of what’s going on.

 

Deals in the pipeline too long

Deals that no longer have legs are not moved out of the pipeline.

The result?

The funnel contains many deals that are unlikely to close successfully any time soon (if ever).

Some of these deals may be in your current sales forecast. Consequently, the forecast probably overstates revenue. In any event, it’s not built on solid foundations.

Which explanation applies in your business if the conversion rate is artificially high? Sandbagging or dormant deals? Or both?

Well, instinct and anecdotal evidence might be enough.

But to be sure, take a second look at the Pipeline by Created Date chart.

If there’s a significant number of deals open much longer than seems reasonable then it’s probably the second explanation. Dormant deals aren’t removed from the funnel.

Take a good look at these deals. Weed out those that undermine your sales forecast.

4.     Pipeline Quality Metrics

The reports and dashboard charts we’ve looked at so far are an excellent way of validating the sales forecast top down.

But you might be thinking:

How do I manage by exception? What are the metrics identifying specific deals that potentially should not be included in the sales forecast?

There are three deal metrics we can use to surface deals that have an increased chance of slipping from the forecast. Deals that will potentially leave egg on our face.

Here they are:

1. Number of Close Date Month Extensions. This is the number of times the Close Date on the Opportunity has moved from one month to another.

2. Number of Days since the Last Stage Change. This tracks how long it is since the Opportunity Stage was last updated.

3. Age of the Opportunity. This is the number of days the Opportunity has been open.

Use these metrics to manage by exception.

In other words, they help sales managers quickly and easily identify high-risks deals.

You can do this using a dashboard table.

The table shows deals due to close this month. So they’re all potentially in your sales forecast.
But can you rely upon them?

Well, the Oxted Manufacturing Opportunity has been open over 200 days. It’s 100 days since the Opportunity Stage was last updated. And the Close Date has moved from one month to another 4 times already.

Not exactly a banker, I’d say.

Perhaps this deal WILL finally close this month.

But you get the idea.

These sales metrics and the accompany dashboard help rapidly identify deals we must investigate further.

5.     Get Free Salesforecasting Resources

Here are free resources that will radically improve the sales forecasting method and technique in your company.
• GSP Sales Forecast Template.
• 30 minute web meeting with me.

 

GSP Sales Forecast Template

This free dashboard has been installed over 1,000 times. You can find it on the AppExchange here.

The package contains:
• All the reports described in this sales forecasting guide.
• A comprehensive dashboard with drill-down to all reports.
• The three deal quality metrics and dashboard table that help you manage by exception.

There’s even a configuration guide that explains how to adapt the sales forecast template to the specific needs of your business.

Apply for the 30 minute web meeting

Each week I hold four free one-to-one meetings lasting 30 minutes.

The discussion is private and specific to your company. You decide the specific topic to discuss so that you get maximum benefit from the discussion.

It doesn’t have to be about sales forecasting. Here some recent examples of other topics I’ve covered recently. How do I:
• Adapt salesforce to the specific needs and processes of my business?
• Embed robust forecasting and pipeline management techniques across my sales team?
Track revenue versus quota and know whether there is sufficient pipeline to meet target?
• Increase salesforce benefits and the investment ROI?
• Manage framework agreements and other non-standard opportunities?

Good luck and happy forecasting!

Apply For A 30 Minute Web Meeting With Gary Today

Just complete our Contact Us form by following the link below 

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