How Confident are You About the Deals in Your Business Pipeline?
by Robert Warren Hess
We did a presentation last week for a group of business owners at a Financial Services Resource Group meeting about how to get the right business deals into your sales pipeline and how to know if those deals will really close.
We introduced a simple index we created for use with our TrakPointe Loan Pipeline Application called the Business Pipeline Confidence Index™ (BPCI).
While we developed the BPCI™ specifically for commercial community bank managers using our loan pipeline application, the formula is simple and can be applied to any sales pipeline.
Here’s the process . . .
- Total the $ value of all of the deals in your loan/sales pipeline
- Write down the sales cycle* for each of the products in your loan/sales pipeline
- Total the $ value of all the deals in your pipeline that are older – have been in process – that the average sales cycle for their product/service
- Divide the $ dollar value of deals beyond their sales cycle by the total $ value of the pipeline
- The result is your BPCI™
Example . . .
- Total business pipeline value – $400 million
- Total deals beyond their sales cycle – $42 million
- BPCI™ = 1 – 42/400 = 89.5 [a perfect BPCI is 100]
What’s Does It Mean?
From our perspective, BPCI™ gives sales managers and senior executives a pretty good predictive tool for judging how much of their business pipeline actually will materialize.
How to Use the BPCI™?
We be doing a series of posts about business pipelines and how to use them. You can follow us on this blog or join our mailing list for free bi-weekly tips and insights on managing business pipelines by clicking the Go button below . . .
* Sales Cycle is the normal time it takes for a client/customer to be introduced to a product or service to the purchase transaction is completed. Every product or service has an normal range for completing the process.
