How to Use the Pipeline Calculator
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Please click on the button to download the Excel spreadsheet. Take a few moments to read through these notes to get the best out of the spreadsheet.
The first step is to enter your annual sales target and the average value of your deals. If your deal value varies a lot, then I’d recommend taking a good guess. For this exercise, I would suggest picking something slightly lower to underestimate your average deal value.
The spreadsheet will then calculate the number of deals you need to close each year to hit your sales target.
You will also notice a box to enter the number of working days in a year. Take 365 days a year and deduct weekends, national holidays and your holidays, and it will leave you 220 working days in a year. You can adjust this figure to suit your situation. As an example, you may only work four days a week.
Click on the tab inside Excel to go to Step 2. You now need to enter your closing ratios.
In the first box, enter the percentage of proposals that you send that result in a deal. If you close 1 in 5 opportunities, then enter 20 into the first box. In the next box, enter the number of face-to-face or online meetings that result in you sending a proposal.
It is crucial at this stage to state that your sales process may be different from the one shown. What is essential is to note that every sales process has key bases or milestones that form the structure of every sales process. Replace the key stages with your own sales process.
The final stage is the number of phone calls you need to make to schedule an appointment. Enter this number into the last yellow box.
There’s nothing to do on this tab except make notes.
One estimation is that 73% of salespeople don’t hit their sales target because they don’t have a plan within their control.
The results section gives you a simple sales plan that is within your control. At the beginning of the week, you now know how many sales phone calls you need to make this week. If you don’t have enough prospects to call, you need to add prospecting to your sales process.
Prospecting and phone calls are activity goals as you decide how many you will make each day, week and month. But meetings and proposals are stage goals, as you have no control over how many take place. What is essential, though, is the ratios you established on tab 2. If you don’t have enough meetings, you’ll need to increase the number of phone calls.
If that happens, come back to the spreadsheet, change the percentage of phone calls to meetings, and reset the numbers. I suggest that you list the number of calls you have to make each day and then tick them off as you make the phone calls.
Now let’s have some fun.
Now that we know your sales ratios, we can start to play with the numbers and see what small changes your activities will make. As a first example, increase your average deal size by 10%. e.g. if your average deal size is £7,500, enter £8,250 into the yellow box. The performance percentage should now show 10%.
In the Improvement percentage, you should see an increase in performance and a reduction in daily phone calls. So, if you improve your proposals, maybe with optional extras or add ons, you should see an increase in average deal size.
Next, let’s assume that you close 1 in 5 proposals. Let’s assume that you can reduce this by 1. Enter this into the yellow box to see the impact? Once again, you should see a performance improvement.
Finally, let’s assume that you maintain your work level and also keep the previous improvement performances. In the sales target box, enter a 30% increase in sales. So, multiply your sales target by 1.3 and enter this number into the box. Hopefully, you see that the number of daily phone calls stays roughly the same as the current figure, but now you have a 30% increase in sales.
Having these numbers in front of you means that you have a better idea of the work it will take to achieve your sales target. If you’re not a particularly good salesperson or lack experience, then you will have to work harder at the beginning of the sales process and make more phone calls and do more prospecting to hit your numbers. You’ll need the self-discipline to make those phone calls, and with help and guidance from your management teams and your colleagues, you can improve the ratios as you go.