Sales pipeline is the journey a prospect takes from being aware of your product or service to becoming a paying customer. It typically has several stages, each representing a different level of engagement with your product or service.
Having a sales pipeline is one thing; tracking its performance and optimizing it along the way is another. You need to regularly analyze your pipeline to keep up with changes and adjust accordingly to maximize your sales performance.
This article will walk you through sales pipeline analysis and how you can do it the right way.
What is Pipeline Analysis?
Sales pipeline analysis is the process of evaluating your sales pipeline and determining where leads are falling off. By understanding why your churn rate is high (or low), you can adjust your sales process to improve conversions and close more deals.
Additionally, analyzing your sales pipeline can give you insight into which stages are most important and where you may need to focus your efforts.
Pipeline Analysis Goals
The goals of this analysis will depend on a business’s needs, but some common goals include:
- Identifying opportunities in the pipeline to create more revenue.
- Informing where resources should be allocated to maximize sales.
- Finding out how well current strategies are working.
- Understanding where and how sales reps spend their time.
- Discovering which prospects are more likely to buy to put more focus on.
- Detecting if there’s anything preventing sales reps from closing deals with the best prospects.
Pipeline Analysis Metrics to Track
There are a few key metrics that you should track when doing a pipeline analysis:
- Number of opportunities in your pipeline
- Value of opportunities in your pipeline
- Number of new opportunities added to your pipeline
- Number of closed/won deals
- Number of closed/lost deals
- Average deal size
- Average sales cycle length
- Win rate
- Conversion rate
- Average time to close
For more information, you can refer to this article: Sales analytics metrics to track.
By tracking these metrics, you can better understand your sales pipeline and how it’s performing. This, in turn, will allow you to make necessary changes and improvements to ensure your pipeline is as efficient and effective as possible.
How to Make Pipeline Analysis
To make a pipeline analysis, first, you’ll need to collect data. This data can come from various sources like looking at historical performance, asking your sales reps, or surveying your customers. Ensure your data is accurate and up-to-date. Once you have it, organize it into a format that’s easy to work with.
You may also need to adopt a tool for pipeline analysis. Of course, you can manually analyze your sales data using spreadsheets, but it takes a lot of time and effort. That doesn’t mention you might miss critical data or make wrong calculations. Using a pipeline analysis platform powered by artificial intelligence like Revenue Grid can make your life easier.
For example, Revenue Grid can display all of your data across channels on a unified dashboard. You can see a complete picture of your pipeline’s performance without having to change screens. You can also visualize data to identify the trends and compare performance by time ranges.
Better yet, Revenue Grid provides valuable insights into deal risks, deal loss, opportunities, and actions. Your sales reps will receive revenue signals promptly, so you can be sure they’ll never miss out on any potential revenue.
How to Improve Pipeline Analysis with Revenue Grid
1. Use Pipeline Management to Track the Status of Your Deals
With pipeline management tools, you’ll know exactly which deals are moving quickly through the process and which ones have stalled out or are at risk. You can also immediately see the status of each deal and the reasons behind it. Easy to get a bird’s-eye view of the entire sales process from beginning to end, allowing you to make informed decisions about where to focus your efforts.
2. Use Sales Pipeline Tracking to Detect any Significant Changes in Your Pipeline
With this tool, you can set up alerts for any metrics you want to track—like deal size, close date, and score—and get notified right away when there are significant changes in those areas. You can also track how much time each rep spends communicating with prospects and how many calls they make each week. Doing so helps you evaluate if your reps are spending enough time on prospecting activities.
3. Spot Risks and Stalled Opportunities With Opportunity Scoring
Opportunity scoring determines how likely a deal is to close based on many factors.
When you score opportunities, you can identify risks and stalled opportunities at a glance. Then use that insight to coach your reps on deals and help them improve their forecast accuracy.
Pipeline Analysis FAQs
1. Is Your Sale Pipeline Healthy?
There are a few key indicators that can help you determine whether or not your pipeline is healthy.
First, look at the number of leads in each pipeline stage. If you’re generating a lot of new leads, but they’re all falling off at the top of the funnel, that’s a sign that something needs to be tweaked in your marketing efforts. On the other hand, if you have a healthy mix of leads at each stage, that’s a good sign that your pipeline is flowing smoothly.
Second, check conversion rates at each stage. If you’re seeing a high drop-off rate at any particular stage, something can’t be working right. Maybe your sales team isn’t following up effectively, or there’s a disconnect between your marketing and sales efforts. Either way, it’s important to identify the problem so you can fix it.
2. How Often Do You Need Sales Pipeline Analysis?
You should perform pipeline analysis at least once a month. Data in your sales pipeline can change frequently. Hence, if you don’t analyze it regularly, you’ll miss out on opportunities to close deals or improve your sales process.
Ready to Make a Pipeline Analysis?
Now that you’ve understood how a sale pipeline analysis can be used to track the status of your sales leads and opportunities, it’s time to put that knowledge into practice.
Analyze your sales pipeline with Revenue Grid
