So, Ronan, an issue I have always struggled with is knowing how much I need in my sales pipeline to hit my company sales targets. What are your thoughts on this? Well, firstly I am delighted that you are thinking about it as a metric. Most salespeople and business leaders don't actually measure sales pipeline. Or focus on it as a priority. But, it is critical if you want to generate More Sales. More Consistently. In Less Time.

So, Ronan, an issue I have always struggled with is knowing how much I need in my sales pipeline to hit my company sales targets. What are your thoughts on this?

Well, firstly I am delighted that you are thinking about it as a metric. Most salespeople and business leaders don’t actually measure sales pipeline. Or focus on it as a priority. But, it is critical if you want to generate More Sales. More Consistently. In Less Time.

What would you guess is needed?

Probably twice our annual target at least.

It does depend on a couple of factors. So, let’s look at each one. First, what is your company sales target?

We are targeting €5,000,000 this year Ronan. That is a 25% increase over current business levels.

OK, do you know you strike rate from an opportunity created to a closed sale? I am assuming a sales opportunity has been qualified and is a “live sales deal”.

I’m not 100% sure Ronan, to be honest.

Ok, so let’s assume you have a 25% strike rate from sales opportunity to closed sales deal. That means you need 4 sales opportunities for every closed sale.

I’m going to apply a straightforward formula to use for calculating sales pipeline needed.

Divide your sales target by your conversion rate to get your sales pipeline target.

Your Sales Goal divided by your conversion rate. In your case

€5,000,000/25% = €20,000,000

Your quarterly pipeline target is €5,000,000 and, you need 4 opportunities for every sales deal.

That is a bit scary looking, Ronan.

Well, remember if you increase your strike rates you reduce the level of sales pipeline needed. It is a great incentive. For example, if you doubled your strike rate to 30%, you would reduce the required sales pipeline to €16,666,000. Now, that is no easy task I know. But it is a huge incentive to drive improvements in closing rates.

You can also focus on shortening your sales cycle time.

So, do you suggest we measure sales and sales pipeline both Ronan?

Absolutely. I suggest that once a month you analyse some of the numbers we discussed.
– Strike rates
– Cycle times
And get your team to calculate their sales pipeline requirement. You can ensure ongoing pipeline health, by measuring pipeline growth.

Ronan, I thought you said this would be easy.

Not me. Simple, but never easy. But let’s not make it any harder by neglecting to measure the right numbers.

Right, I’m off to break the news to the team that they have two sales targets they should be focusing on. I love this job!!

 

Regards Ronan

Call me on +353(86) 7732201

Ronan Kilroy | Insthinktive Sales Leadership Ltd. | Blanchardstown, | Dublin 15, | Office 01 8220523

www.insthinktive.com

More Sales, More Consistently, In Less Time

 

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