Importance of Sales Pipeline Reporting
Ah, the sales pipeline. The bane of so many sales and marketing organizations is simultaneously the primary focus. If you’re not driving pipeline, you’re not succeeding. And when there isn’t any pipeline to speak of, the Yeah Yeah Yeahs agree that heads will roll. But there is often another problem in a lot of organizations possibly more unfortunate than a lack of pipeline—a complete lack of sales pipeline reporting.
This means there might be pipeline to speak of, but no one can say for sure where it comes from. Employees are likely pulling ad hoc reports when they need the data, but there is nothing consistent (or pretty) about that reporting.
Why does this matter? Well, don’t you want to know how successful that Google AdWords campaign you’re running is? Or what about that display program where you’re testing out a new tool?
It’s time to stop measuring yourself against the leads you bring in. Leads are great because with leads, there is the possibility of driving sales opportunities. But you know what’s better than a possibility? Actual opportunities.
In this article, we’re going to discuss how to put together your pipeline reporting (in excruciating detail).
How organized is your CRM, really?
This might be a touchy subject for some Salesforce admins or sales operations. But we’ve got to ask the question: Is your CRM actually organized?
Let’s consider a few elements that could be mucking up your CRM (and consequently your sales pipeline reporting):
Out-of-date or duplicate lead sources
Anyone else have multiple versions of “Referral from Sam Smith” as a lead source? It’s tough to build a report based on lead source when you need to pull in multiple forms of the same data.
Qualified leads marked disqualified, and vice versa
If a good lead is marked as disqualified, you’ve got a serious problem. This can happen through overzealous automation or a lack of sales and marketing alignment over what constitutes a qualified lead. Get this figured out so you’re not missing out on opportunities to turn good leads into revenue.
Contacts aren’t attached to corresponding opportunities or accounts
It’s hard to close a deal when the people involved aren’t connected to the opportunity in your CRM. With so many members of the demand unit, you can’t afford to leave anyone out.
No opportunity amount
Without an opportunity amount, you can’t really report on it, can you? Even if a deal size hasn’t been discussed between sales rep and prospect, use historical data to assign a realistic value. This is necessary for getting an idea of how much pipeline you actually have.
For instance, if reps are not assigning an opportunity amount it might show you have 20 deals with $0 in pipeline. That’s not accurate, and it doesn’t tell you how you’re doing against your goals—more on that later.
Underutilization of your CRM
This is a biggie. If sales reps aren’t making notes after their interactions with a prospect, sales managers can’t go in to ascertain the status of conversations. Neglecting these types of notes also means marketing can’t see feedback on the leads they’ve brought in.
Also, it’s important to mark deals as closed with the appropriate close reason. Having closed-lost reasons as dropdowns in your CRM allows you to better understand why prospects don’t choose you as a vendor. These reasons might include:
- Went with a competitor
- Not pursuing this project
This also means you can report on your data based on these filters. If you find a large percentage of your opportunities are going with a competitor over you, you might consider targeting competitors more aggressively in your campaigns or devoting funds to comparison assets. Similarly, you can then create nurture campaigns for opportunities that did not closed based on the closed-lost reason. If they went with a competitor and you know that competitor’s average deal length, start the nurture towards the end of that deal cycle to remind them of who you are. Nurtures can also be created to check in on budget or to see if they’re finally ready to start their new project.
In addition to these dropdowns, it’s also helpful if a sales reps leaves notes about why an opportunity didn’t pan out and any follow-up actions (like specific tasks) that need to be taken. Not every closed-lost reason can fall into a few simple buckets. The more context, the better.
You also need to ensure your team converts an account into a customer when it happens. Your reporting won’t be accurate if you’re still pulling pipeline numbers that include accounts that have been converted to customers.
Those hard-to-define issues unique only to your CRM
Every CRM is different, just like every organization is different. So this is by no means a comprehensive list of every possible CRM problem that could hinder your sales pipeline reporting.
We trust that every organization has the ability to create strange and unforeseen CRM problems unique to their business. To combat this, it is so important for everyone who uses your CRM to understand their individual roles and responsibilities. Have regular conversations between marketing, sales, and sales operations team to see if new fields need to be created, or if there are ways your team can better use the CRM.
If you see something out-of-the-ordinary, speak up. Don’t let CRM issues pile up.
Before you construct your sales reports, it’s important to have goals by which to measure yourselves. That’s where KPIs come in.
KPIs (or key performance indicators) are critical indicators of your progress. For our purposes, they are quantitative goals. Often taken from historical data, KPIs should be repeatable.
Let’s look at some of the KPIs you should be using. You’ll need to determine your expected:
- Total opportunities created per quarter (or the value of opportunities created per quarter)
- Ratio of AQL to MQL to SQL
- Total number of AQLs that turn into qualified leads
- Percent of closed-won deals
- Time to closed-won
- Number of demand unit members to target per account
In cases where you’re light on organizational data (whether because you’re a new business or because you’re making big changes to sales and marketing), you might refer to industry benchmarks instead.
Now for the fun part: pipeline reporting
Now that you’ve got all of your CRM issues fixed and KPIs in a row, it’s time to build reports. First, make your sales reports graphical and easy-to-read. Don’t pull a spreadsheet from your CRM and call it “good enough.” If someone needs to spend 10 minutes going through a spreadsheet to get to the information they’re interested in, your reporting is not effective.
There are a few helpful reporting best practices to abide by. Your reporting should be:
- Easily comprehensible at-a-glance: Try stepping away from your computer and ask yourself if you still understand what it means from a distance.
- Simple: Don’t go layering metrics on top of metrics. If it’s important enough to build a report around, strip it down to the essentials. You can always create other reports for those finer details.
- Relevant: Don’t build reports for meaningless data. Make sure what you’re doing holds business value and sheds light on your sales pipeline stages or sales process.
- Pretty: Let’s get a little creative, people. No one wants to look at the same monochrome bar graph for every metric you’re reporting on.
Now that we know what our reports need to look like, what types of reports should we be building?
Sales pipeline and opportunities
This is what it’s all about, right? You need to create a report that represents your sales pipeline at this moment in time. Metrics to include are your total sales pipeline in addition to pipeline that is marketing-driven, sales-driven, and marketing-influenced. Include both the number of opportunities and the corresponding value.
Go over this report regularly, and don’t forget to compare the actual amount to your goal KPIs. How close are you to reaching your goals? And what can you change to achieve those goals?
Sales might need to change its approach to inbound leads, while marketing may need to alter the characteristics of inbound leads they’re bringing in.
Getting your pipeline where you want it needs to be a total team effort.
When did a lead come in, when were they converted to an opportunity, and where are they in the conversation? And when do you expect them to close?
This is an important (and often difficult) aspect to track in your sales pipeline reporting. Knowing when a deal might close, and how well it is going, gives you a better idea of expected revenue.
Discussing the timeline between sales and marketing allows marketing to step in and assist with the deal. After all, you want to be as aggressive as possible with those deals that are close but need a little help.
It could be that sales need to reach out to particular leads more often to stay top-of-mind. Maybe this contact needs a nudge in the form of some more sales collateral. Perhaps there’s a sales cadence or email nurture they can be entered into to help with conversion. Or maybe they should be retargeting in your paid ad campaigns so they see your brand more often in their day-to-day lives.
At the end of the year, how many deals have you closed? How many deals fell through, and why?
Putting together closed-won and closed-lost data side-by-side can help you optimize your sales process by understanding which types of deals convert and which ones don’t. What is impacting your team’s sales performance?
For instance, maybe you find that one of your offerings is a harder sell than another. Does this mean you need to better educate prospects who are a fit for that offering through sales cadences, email nurture, blog content, and webinars? Or does it mean you should focus on the offerings that are more successful? To draw these conclusions, you need to look at your opportunities as a whole.
Other data to consider adding to your report (and please, remember to keep it simple and only include one additional element at a time if possible) includes industry, number of demand unit members included in opportunity, primary contact titles, and length of time it took to go from opportunity to close.
While we want to focus on opportunities in our sales pipeline reporting, bringing leads into the discussion means we can measure our efforts based on who we are attracting from the beginning. This is where reports based on lead source will come in handy. What lead source is creating the most opportunities? Track this from AQL to MQL to SQL for a clearer picture of your pipeline. This will give you a good idea of where to place campaign budget and what types of programs need a little more work.
A review of titles, industries, and company revenue compared with types of leads that become opportunities (and subsequently types of opportunities that become closed-won) will allow you to better refine your targeting. This exercise is also important for optimizing your buyer personas—or for creating them in the first place.
Your pipeline is going to be light on opportunities if the leads you’re bringing in don’t match the titles that are moving to closed-won.
If that is the case, what do you do? Review good conversations between prospects and sales reps. See what collateral those contacts are asking for and what language they’re using. What problem are they looking to solve? Speak to those issues first and foremost when bringing in leads so you have a better chance to convert them to opportunities later on.
One last thing
Just like every other facet of business, your sales pipeline reporting will evolve over time as your goals (and organization) change. And part of that evolution is driven through your existing pipeline reporting. Your goals will likely become more aggressive over time and you’ll need to adjust KPIs to stay inline with your new initiatives.
But you will always need to report on opportunities, timelines, leads, and closed deals. That needs to be a constant.
Regular sales pipeline reporting helps keep sales and marketing on the same page. It’s also a great reminder that we’re all working towards the same goal: driving opportunities that lead to revenue.