The Marketing Department carries out systematic work aimed at improving the efficiency of interaction with clients at all stages of the sales process. For example:
To attract customers to your commercial offer, you can provide a free useful e-book as an additional bonus.
During the product presentation, you can provide specific examples of the product being used by other contractors who have demonstrated their success.
To encourage quick contract stockholder database conclusion and payment, you can offer a small discount or bonus, but these should only be available for 1-2 days to create a sense of urgency.
Sales pipeline coverage
SPC (Sales Pipeline Coverage) is a metric that allows marketers to estimate the number of qualified contacts needed to achieve planned sales. The SPC coefficient is calculated using the formula:
SPC = (Average number of days for 1 sale, Average Sales Days : 90 days) : (100% : Close Rate, %)
For example, if it typically takes 90 days to close a sale and the closing rate is 20%, this means that the SPC ratio is 1:5. This can be expressed through the formula:
(90:90):(100%:20%) = 1:5.
Based on this value, sales managers and marketers can conclude that the sales volume in the pipeline must be 5 times greater than the sales volume planned for the current quarter in order to meet the set goals.
Typically, the SPC ratio is considered normal at 3:1. However, this depends on the specifics of the business and the number of deals that need to be closed.
To ensure a stable value of the SPC coefficient in the sales process, 3 KPIs are used to help optimize it:
number of transactions in the process of being concluded;
average percentage of successfully closed transactions over a given period;
the average time it takes to close a deal.
To ensure the stability of the SPC ratio, any metric that is related to the pipeline should be improved and its consistent analysis and optimization should be carried out in order to achieve overall goals.
Sales pipeline coverage
Managing a Sales Department with a Pipeline
Sales Pipeline Management includes managing the sales process at each stage of the deal life cycle. This is done by a senior manager or department head who controls each step, analyzes the efficiency of employees and makes changes to the action plan. The main task of the manager is to reduce the time to close a deal and increase sales volume.
Pipeline management occurs in 3 stages:
Analysis of performance indicators and profit forecast, planning of salespeople's activities and redistribution of tasks taking into account the experience and competencies of employees, including attracting more experienced workers for complex transactions, and drawing up a work schedule for the day and week with the establishment of priorities.
Working with clients. The manager searches for problems that prevent employees from closing deals, and then finds ways to solve them. If one manager cannot complete a transaction at the negotiation stage, he offers a solution to the problem by teaching the employee the skills of successful negotiations and improving the quality of work with documents.
Analyzing the results. The manager evaluates the work of managers to determine which indicators need to be improved for more effective functioning. If there are problems, the manager determines the actions that managers must take. For example, increase the number of clients in the sales funnel. The manager sets specific goals for managers to achieve success.
Read also!
"How to Calculate Conversion: 3 Proven Options"
Read more
To ensure effective pipeline management, managers must adhere to the following principles:
Formalize the sales process by developing clear rules, scripts, and instructions for employees at all stages so that they can take the necessary steps to achieve the set goals. This will help measure the work of managers more accurately using metrics from the pipeline.
Hold regular meetings with managers to analyze sales and discuss examples of successful and unsuccessful work. Daily planning meetings will help employees learn, develop and find solutions to complex problems, which will increase the efficiency of the department's work on the pipeline.
Create a mentoring system to help managers learn to identify customer needs at the initial stages of sales.
Download a useful document on