In this video, learn what a pipeline is and what opportunities are, while using concrete examples to understand how to use the pipeline and where its true power lies.
- [Instructor] Let's start by defining what a pipeline is. The pipeline, sometimes also called a funnel, is in its most simple form, just a list of all the sales opportunities you or your sales team are working on. It's the list of all the deals that could potentially become orders, and ultimately dollar revenues for your company. Let's define first what a sales opportunity is. A sales opportunity, also called a deal, is the potential for future sale.
It is a revenue potential you have uncovered and that you're going to document so that you can track how you convert it into revenue for your company. For example, if your business is to sell cars and you know a company is looking to buy three cars, then you have a sales opportunity because you know they need something that you sell. You can document this opportunity by detailing specific information. The list of all this information is your opportunity.
It is a detailed document summarizing all the information that can be found on that potential future sale. The more detailed your opportunity is, and the better you are prepared to take the right actions to win the sale. An opportunity has been created or opened as soon as the potential business has been identified, and it is closed as soon as it has either been won or lost. The logic is the following: if a deal is lost, the opportunity is closed.
That's simple enough, since there's nothing more to do about it. And if it has been won, then it is closed, as well, as it's not an opportunity anymore, but real revenue for your company. Now let's get back to our pipeline and take a concrete example. Let's keep our example of our company selling cars, and let's say you're talking to three companies in the hope of selling them your product. You could sell to company A ten cars for 300 thousand dollars; sell to company B two cars for 40 thousand dollars; and sell to company C three cars for 60 thousand dollars.
Your pipeline is therefore, in this example, a list of those three opportunities with a total potential revenue of 400 thousand dollars, if you win those three opportunities. A pipeline is as simple as that. The true power of the pipeline is not in what it is, but in how you can use it. There are many different ways in which we can analyze the pipeline to answer questions like, do we have enough opportunities to sustain our business; are we identifying new opportunities on a regular basis, because we could have a great performance at the moment, but not enough opportunities to sustain that performance over time.
Are we actively developing the opportunities we have identified to maximize our chances of winning them? Are we closing opportunities and going to make our numbers this quarter or this year? How do we identify business opportunities? Is it through sales efforts, marketing efforts or other activities we're running? All those questions, and many more, can be answered by analyzing the sales pipeline. Salesforce is a tool that is very powerful and can today cover many business needs, but historically, it's been primarily a pipeline tool, meaning that it would focus on being an online repository for all the information relating to your sales activity, from your contacts to your leads and to your opportunities.
In a regular sales pipeline coming from Salesforce, we have access to much more information than what we had in our example. All those additional elements are what we'll be using to gain critical insights about our business.
- How the pipeline materializes in Salesforce
- Examining a high-level overview of the sales cycle
- Examining qualitative and quantitative measures
- Acquiring and preparing your data
- Creating your report in Salesforce
- Working with qualitative and quantitative reports
- Conducting effective pipeline reviews
- Collaborating with the sales team