How can I estimate the success rate of my Sales Cycle?
I have a sales cycle with various stages. How can I estimate and encode the success rate for each stage?
In order to achieve a true win-win outcome, you’ll need to make sure you can create a fit between your solution and what your customer seeks to fix, accomplish, or avoid in the sale.
Let’s say, for example, that you’re trying to sell someone a coaching program that costs €1000. A lead comes to your blog, likes a post, and signs up for your mailing list. If your first e-mail is a sales pitch for your coaching program, how many people will buy it? A small percentage, to be sure, especially if your blog posts are directly related to coaching program. However, by adding a few more steps, you can more easily encourage a sale.
In an ideal world, your sales funnel is an ongoing reporting of the sales opportunities you are working on. You separate these opportunities based on the likelihood that they will close, and then you arrange each category by the date that they will close.
The stages of your sales funnel might instead look like this:
1. Sign up for your list
- Revenue €0
- 0% probability
2. Dowload your free ebook
- Revenue €0
- 25% probability
3. Share your ebook
- Revenue €0
- 35% probability
4. Buy your basic course
- Revenue €19
- 50% probability
5. Buy your advanced course
- Revenue €197
- 75% probability
6. Enter the coaching program
- Revenue €1000
- 100% probability
You can break down the probability that the opportunity will close however you want.
In this scenario, you’re asking people to take little steps, instead of going right from “mailing list sign up” to “spend €1000″. Downloading a free ebook isn’t a big step. Once you’ve done that, sure, why not share? Hey, if the info was valuable in the free book, the info in a €19 book is probably great! Oh, there’s a €197 program? Yes, I would love to join, because I already got more than that much value from your lower-cost items. Spend €1000? Sure!
As you progress in your sales cycle, and move from one stage to another, you can expect to have more precise information about a given opportunity.
For example, when setting an opportunity as Qualified, you may decide that the salesman has to enter the Expected Revenue and the Expected Closing Date. To keep track of the coming sales pipeline, you should in that case enter the expected closing date for each opportunity. By doing this, from the Opportunities screen you can easily group your pipeline by Expected Closing. This is a clear way to forecast the planned revenues. Simply by adding an expected closing date, the sales team can manage the sales process more efficiently and effectively. The expected (or planned) revenue is a weighted value, a multiplier applied to the expected (or probable) revenue of a prospect based on the probability of closing the sale.
To make sure the results for each stage are quickly available to all sales, you can attach a Google Document with the complete description. With the Document Management installed, you can attach any document to any object.
Make sure to enter the expected closing date, i.e. the date you estimate the opportunity will close. Your sales funnel is a personal tool that you use to expand your customer base and grow your revenue. Use your company's sales funnel, and make it as simple to use as possible. The more organized you are, the more effective you will be.
Sales cycles can range from one hour to a year or more. Every sales professional needs to know their sales cycle before they can assign prospective closing dates to sales funnel leads.
Once you know your sales cycle, assigning a prospective closing date to each lead is simple. If the sales cycle is one month and your closing probability is 50 percent, then set a closing date that is two weeks away. If your closing probability is currently zero percent because you just started working with the lead, then your prospective closing date would be one month away. It is that easy.
Your sales funnel is your sales to-do list, but it is always going to be an estimate. When you move an opportunity to a 75 percent probability, then you are just waiting on the purchase order. Sometimes that wait can be weeks, or even months. The sales cycle is an average, but it is all you have when you are estimating prospective closing dates.
Combine these data with list segmenting, and you’ve got quite the sales tool on your hands. Yes, it can be complicated to organize and track, but if you do, you can increase your sales drastically.
Leads are generally handled by the dozen, with the automation of certain responses or emails.
Opportunities, on the contrary, are usually tracked one by one by the salespeople, because an opportunity involves a negotiation process with the customer to be.
With opportunities, you can manage and keep track of your sales pipeline by creating specific customer- or prospect-related sales documents to follow up potential sales. Information such as expected revenue, opportunity stage, expected closing date, communication history, next action date, next action, and much more can be stored.
Opportunities can be connected to the email gateway: new emails may create opportunities, each of them automatically gets the history of the conversation with the customer. You and your sales team(s) will be able to plan meetings and phone calls from opportunities, convert them into quotations, manage related documents, track all customer-related activities, and much more.
By default, you can keep attachments in Odoo to make sure all linked documents are directly accessible. At the right side of the screen, under Attachments, click the Add button to start linking documents to your opportunity. With the Browse button, you can search for the file to be attached in your directories. You can add attachments in the same way for leads, for instance. If you also want those documents to be indexed (not for pictures), you should install the Document Management App.
If you use the Internet to generate leads then a conversion may be a completed lead form or an online sale. To measure your conversion rate, use Google Analytics, which is capable of tracking a lot more than just people visiting your website; including each step of your transaction process when set up correctly. Once you have your tracking system in place, use the reports it generates or this simple formula to calculate conversion rate:
[ Number of Sales (or Opt-ins) / Number of People (or Visits) ] * 100 = Conversion Rate
Once you have identified the estimated success rate for a stage, you can have the probability changed automatically when changing stages, by selecting the Change Probability Automatically checkbox and entering the expected success rate in the Probability (%) field. If checked, Odoo will set the probability of the opportunity to the probability defined in the stage. If you set a probability of 0% (Lost) or 100% (Won), Odoo will assign the corresponding stage when the opportunity is marked as Lost or Won. The probability allows you to get a weighted value for your revenue.
From the Opportunities Analysis report, display all opportunities that are won. Odoo's CRM app will show every opportunity you turned into an actual sales according to the corresponding stage.
From this dashboard you will get good insights in your sales funnel, by filtering and grouping data the way you want. Both tables and graphs are available!
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