6.1 EXL - Sales Spreadsheet

relates-to:: 07-Projects/TTSU/Articles/The Periodic Table of Tech Start-Ups/README

This document precedes 6.2 CRM - Customer Relationship Management and succeeds none

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While implementing a CRM is lightweight and perhaps inexpensive (self-hosted opensource system), an easy alternative can be developed using a spreadsheet. Below are some recommendations for building a spreadsheet-based sales tracking tool.
Generally speaking, it's advised to rely on standard formulations and definitions to make your sales pipeline easier to read and understand. Below you'll find a relatively standard glossary of terms and definitions to help you do just that.

Definition and Purpose:

The purpose of a spreadsheet-based sales tracking tool is to easily capture and report sales opportunities as they arise. At a minimum, the following information must be captured to make this tool relevant:

  1. Opportunity identification (recommended)
  2. Account name (required) :
  3. Description (recommended):
  4. Industry (optional):
  5. Region (optional):
  6. Targeted amount (required):
  7. Targeted closing date (recommended):
  8. Stage of Sale (recommended):
  9. Probability of closing (recommended):
  10. List of products/services (or link to a quote) (recommended):
  11. Next steps (recommended):

With this information captured, the tracking tool allows sales teams to effectively track leads and opportunities. An opportunity is defined as the potential for an order booking, with an associated dollar amount, a target date and a potential list of products and/or services. A sales stage is defined by providing details about the sales process and an associated probability of closing. Typical sales stages and their closing probabilities are as follows:

  1. Prospecting (or qualification)
    • Probability of 10%
    • Description: The customer may not have a budget. The product or service has not yet been adapted to the customer's needs. Is it worth the win (cost vs. win analysis).
    • Exit criteria: answer the above questions
  2. Discovery (or needs analysis)
    • Probability: 30%.
    • Description: Understand/identify decision makers. Gain visibility into budget and schedule. Understand the customer buying process.
    • Exit Criteria: Thorough understanding of budget, decision makers and schedule.
  3. Client (or Proposal) Assessment
    • Probability: 50%.
    • Description: Client received the proposal/quote
    • Exit Criteria: Customer commitment to enter into a business agreement. Agreement to enter into negotiations on terms and conditions.
  4. Negotiation
    • Probability: 80%.
    • Description: Negotiation has begun. The objective is to reach an agreement to close the deal
  5. Closed won
    • Probability: 100%.
    • Description: The opportunity is closed and won. The purchase order is captured as a new booking.
  6. Closed Lost
    • Probability: 0%
    • Description: The opportunity is lost. Capture the reason for the loss. Can be used later in a win/loss assessment or in customer interviews to understand/improve product/sales offering.

Basic analysis can be done by regions, industries, products or services, individual contributors... Reports (see dashboard) can help improve communication with other parts of the company (board of directors, management team, engineering, manufacturing, supply chain...).

As a rule of thumb for a company forecasting initial revenue, it is safe to assume a closing (order intake) of around 30% of the net pipeline (the sum of values factored by the probabilities). A good assumption is for the net pipeline to represent around 30% of the gross pipeline (sum of values).
The gross pipeline should therefore list around 10 times the budgeted sales (the sales in your budget) for the period.
These ratios will evolve as the company gains maturity in forecasting its sales. Other interesting ratios to consider:

Some definitions

Tools