This article shows how the On2Biz pipeline report tracks various sales metrics that go far beyond the conventional target tracking to measure sales performance.

The pipeline report metrics

On2Biz automatically generates a sales pipeline report based on values entered in sales projects. Let us look at a sample pipeline report generated by On2Biz:

This is a pipeline for one month for a particular sales person. The metrics that are shown in the report above are:

1. Milestone – Milestones indicate the stage of sales in the sales process.

2. Pipeline – Pipeline indicates value and number of projects that are currently at various milestones.

The number of projects in the pipeline should be highest at the lead stage, and gradually reduce towards the bottom. In the example above, there are not enough projects at the beginning of the pipeline. This may hamper sales flow in the following period.

3. New – Indicates the number of new projects that have arrived at the corresponding milestone in the report period selected (1 month).

Each milestone should have some new projects each month. No new projects indicates that the sales process may be taking too long, or that there is not enough activity.

4. Inactive – Indicates the number of projects that are inactive for more than 1 week (or period specified in configuration) at the time the report is generated.

This column has two numbers shown as X / Y, where X are projects that are inactive due to lack of any sales activity, wyile Y are projects that may have activity, but have not shown any progress in milestones. Ideally, X should be low or zero, indicating enough sales activity is being carried out. Y indicates lack of progress.

5. Average Project Value – Indicates the average value of projects at the corresponding milestone.

The average value gives an indication of the size of orders that are being worked on. When comparing pipelines of sales persons, one can find out which sales persons are working on smaller value projects, but may have larger number of projects, and which sales persons are working on fewer, hopefully larger value projects.

6. Weighted Pipeline Value – Indicates the value of projects at the corresponding milestone, based on the probability of conversion.

The probability of conversion is automatically calculated by On2Biz, based on the history of conversion of the particular sales person, product category or sales team for which the pipeline report was generated. Ideally, the weighted value should be equally distributed in all the milestones, which ensures smooth sales flow. Lack of enough weighted value at any critical stage is an early warning for potential trouble to come.

7. Funnel – The funnel shows a cumulative performance of all projects in the selected category and period. It shows the total number of projects that have passed the corresponding milestone in the period for which the report was generated.

The shape of the funnel indicates the rate of conversion of projects along the different milestones. The funnel should be consistently tapering down, indicating healthy sales conversion.

8. Conversion Ratio – Indicates the rate at which projects are getting converted with respect to the total number of projects in the funnel.

The critical conversion ratios to watch are the top and bottom – conversion of leads to opportunities, and order conversion. If the conversion of leads to opportunities is not high enough, it indicates that the quality of leads being captured may not be good enough. Order conversion should be consistent, as per benchmarks of the particular industry or market. A low order conversion ratio indicates lack of sales effectiveness. However, if the order conversion ratio is too high, it may not necessarily be good. It may be a sign of under-utilization of sales resources – you may be playing too small a game.

Drilling down from the pipeline report

One can drill down from this report to the list of projects for the following metrics:
1. Click on the pipeline value to get a list of projects that are currently at that milestone
2. Click on the number of new projects to get details of the projects
3. Click on the Inactive projects X / Y to get the corresponding projects that are inactive. Both X and Y are separate links.

Key Performance Indicators

To understand how the above metrics can be used as key performance indicators, let us see another example of a pipeline report to compare with the previous one:

Let us compare the above pipeline with the one previously shown:
1. Shape of the funnel – Firstly, the shape of the funnel now looks warped. Compare this with the previous report, where the funnel was gradually tapering. The bulge in the middle indicates that this sales person has projects that have directly entered the quotation stage and not as converted leads. This is likely because these may be repeat orders by existing customers (one can see the details of the projects by clicking on the corresponding pipeline value). So the sales person may be overly dependent on repeat orders and not putting enough effort on new leads – or in this case, just sitting on the leads without working on them.

2. Distribution of Weighted Pipeline Value – Compared to the previous example, this report shows a different distribution of the weighted value. There is a larger weighed value of the top, and smaller weighted value at the bottom. However, if one looks at the new and inactive columns, it shows that these leads may be all old, and lying around without any progress. Hence if there is any deviation from a uniformly distributed weighted value, it could be a sign of trouble.

3. Lead Qualification Ratio – This report shows only 73% leads are being qualified, while in the previous report, 92% leads were being qualified. This may indicate that leads being captured are not good enough, or as in this case (evident from the inactive projects), the sales person is too lazy to work on the leads.

4. Order Conversation Ratio – This report shows an extraordinarily high order conversion ratio of 67% – a sure sign of trouble!!! A high order conversion ratio is a sure indication of under-utilization of sales resources. The earlier report showed only 7% conversion, but all other KPIs were good.

Had we used the conventional method of measuring performance only on value of orders converted, the second sales person would have been considered a better performer than the first. On2Biz pipeline report therefore simplifies the performance management by using a broader set of Key Performance Indicators, which ensure consistent sales effectiveness across the entire sales team.

Related posts:

1. Sales Cycle Time – a critical metric for measuring performance
2. Managing a Complex Sales Process
3. Feature Changes: Workspace dashboard menu with Activity List and Pipeline

The objective of this modules is to ensure that we are prioritizing our activity across our entire database of companies. Usually activity gets prioritized based on immediate need. However, with the relationship management module, You can grade companies based on level of attention required, and On2Biz will automatically bring to your attention those companies that need to be attended to out of turn. In addition, you can now track activity that is not necessarily related to any open or active project. Hence you can create tasks, appointments, calls, notes and files for companies even if they do not relate to any specific active project.

A. Creating a new customer / company

Usually a new company is created when you add the first project for the company. With relationship management activated, a new link appears in the workspace to create a new company. To view or edit the company details, you can click on the company name in the project to view the company page.

The company page contains the following details:
1. Company Name – as entered in the project
2. Company Code – you can use this to assign a unique accounting code to the customer, so as to match your internal accounting code for the company
3. Type – this specifies the relationship of the company – default relationships are End Customer, Distributor, Consultant etc. These can be customized to your requirement.
4. Account Manager – The account manager is automatically set to the project manager of the first project created for that customer.
5. Grade – You can assign a grade to the customer. Default grades are A,B,C,D. Grades correspond to a rating of the importance of the customer for your company. You can grade the customer based on any factor such as potential of business value, strategic importance of the relationship for entering a new market segment, possibility of repeat business, etc. For each customer grade, you can specify a default frequency of contact. For example, you can specify that A grade customers should be contacted every week, B grade customers every month, C grade customers every two months, and D grade customers every quarter. These are the default grades and periods. You can change these for your company’s requirements.
6. Company Website – the address(URL) of the company’s web site
7. Scale – Large scale, medium scale, small scale or professionals – can be used to segment customers
8. Industry Type – containing a choice of various types of industries – used to segment customers
9. Project List – showing a list of projects that relate to this company (as end customer or other company role). You can also create a new project from here. Clicking on the project title opens the corresponding project page.
10. Contacts List – list of contact persons with contact details. You can add or edit contact persons from here.
11. Address List – list of addresses or locations at which the company has presence. You can add or edit one or more addresses.
12. Tasks – tasks related to the company but not to any individual project. You can add tasks for the company or for the project, but only company related tasks are listed here. Project tasks are listed in the project page.
13. Appointments / Calls – appointments related to the company but not to any individual project. You can add appointments/calls for the company or for the project, but only company related calls are listed here. Project calls are listed in the project page.
14. Files – files related to the company but not to any individual project. You can add files for the company or for the project, but only company related files are listed here. Project files are listed in the project page.

B. Customer Activity in Workspace menu

The relationship management module introduces a few new entries in the workspace menu for managing company relationships:
1. Active Companies
a. by Activity – lists customers that have some activity(calls/tasks/notes) in the last 1 week
b. by Calls – lists customers that have been called (not tasks / notes) in the last 1 week
Note: The above should actually show customers who have been attended to in the period as defined by their grade. However, since in the beginning, no customers have been graded, we are starting with 1 week.
2. Inactive Customers
a. by Activity – lists customers that have NO activity(calls/tasks/notes) in the last 1 week
b. by Calls – lists customers that have NOT been called (not tasks / notes) in the last 1 week
Note: The above should actually show customers who have been not been attended to in the period as defined by their grade. However, since in the beginning, no customers have been graded, we are starting with 1 week.

C. Customer Analytical Reports

1. Customer Coverage Analysis in Pipeline Report – The pipeline report will contain a new section called customer coverage analysis which shows how well the user/group/category covers the customer base. For each grade of customers, it will show:
a. Total customer base – the number of customers in that grade, who have account managers as the selected user/group
b. Customers in pipeline – the number of customers who have active projects in the pipeline
c. Other customers – the number of customers who do NOT have active projects in the pipeline
d. Customers with completed calls – the number of customers who have been called in in the period specified
e. Customers with completed tasks – the number of customers who have completed tasks in the period specified

These metrics indicate the extent of coverage of the customer base by the pipeline and by activity. If the number of customers in the pipeline at any customer grade is too small, it shows that we are not covering enough customers of that grade. Then, we can see whether there is adequate activity for that grade of customer. If there is not enough activity, then we can re-focus activity for that grade of customer.

2. Company Listing Reports
In addition to the new section in the pipeline report, we also have a companies list report which can list out customers by various search criteria:
a. Company Name
b. Company Grade
c. Industry Type
d. Company Scale

With this module, On2Biz introduces an easy-to-use mechanism to add relationship management facilities, without adding any significant overhead of effort for users.

Related posts:

1. Why do you need a CRM or Sales Force Management System?
2. Feature Changes: Workspace dashboard menu with Activity List and Pipeline
3. The Secret behind Effective Sales Management

• Workspace – where the user manages and reports activities and processes
• Reports – where the user analyzes performance through various types of reports

Each of these sections have the corresponding menu, which acts like a dashboard for quick access to the facilities in the section.

We review here, the Workspace dashboard menu, and the changes we have implemented based on feedback from users.

The workspace menu consists of the following facilities:

1. Activity List

a. Scheduled Appointments – lists the appointments that are due today or overdue
b. Pending Tasks – lists the tasks that are due today or pending from before
c. Unread Notes – lists notes that have been added in projects where the user is an project manager or project team member
d. Active Projects
- by Milestone – lists projects that have shown progress in milestones in the last 1 week
- by Activity – lists projects that have shown some activity (calls/tasks/notes) in the last 1 week
e. Inactive Projects
- by Milestone – lists projects that have shown NO progress in milestones in the last 1 week
- by Activity – lists projects that have shown NO activity (calls/tasks/notes) in the last 1 week

2. Projects Pipeline

The projects pipeline shows the number of projects that are currently at various milestones. Previously we used to show all projects where the current user has permissions to view. Hence, a user will see all projects where:
a. The user is a project manager
b. The user is a project team member
c. The user is a category manager for a product category which is being sold
d. The user is a member of top management (and will see ALL projects for all users)

So for individual users who are not category managers or members of top management, the pipeline shows projects where that user is a project manager or a project team member.

While for managers, it would show all projects where they have permissions to view, which include projects that they are themselves project managers/project team members, as well as other users’ projects.

Some of the managers who are using On2Biz have brought to our notice that it is difficult for them to view their own projects from the workspace pipeline. If they want to view projects belonging to their subordinates, they can use the reports, where one can choose the user and see the sales pipeline in detail.

This made sense to us, so we have now created an option in the user preferences, to indicate whether the workspace pipeline should show subordinates pipeline or only the user’s own pipeline.

Hence if you are a manager, and you set your preference “show subordinates pipeline in workspace” to no, then your workspace pipeline will show only projects where:
a. The user is a project manager
b. The user is a project team member

This will affect the number of projects that appear in your pipeline if you are a category manager or a member of the top management.

By default, the workspace pipeline will include your subordinates projects. To see only your individual projects in the workspace pipeline, change your preferences “show subordinates pipeline in workspace” to yes.

Related posts:

1. Customer / Partner Relationship Management facilities in On2Biz
2. Using the sales pipeline report for key performance indicators
3. Managing a Complex Sales Process