CRM systems are fairly good at giving an overall picture or ‘snapshot’ of deals, and what deals are expected to close within a given timeframe, for example within the next week, month etc. However, what they aren’t so good at telling you is just how fast deals are moving through the process, this is known as the ‘velocity.’ Velocity simply means how quickly you close a deal. By using the sales velocity you can figure out your ‘pipeline velocity’ and gage whether or not this is increasing or decreasing, this is called ‘acceleration.’ The good news is, if you are using Dynamics CRM, this can be easily measured and the data is probably already there – just waiting for you to unravel it!
If you are using CRM for your sales process, you would typically be using the Opportunity record to represent potential sales in the pipeline. An opportunity is created, it gets pushed through the steps of the sales process, and then this sale will eventually close. If successful, the sales are closed as ‘won’ and if unsuccessful the sales are closed as ‘lost.’ Regardless of whether sales were successful every sales opportunity has a ‘Created On’ date field and every closed opportunity (whether won or lost) has an ‘Actual Close Date Field.’ If the opportunity was ‘won,’ it will have an ‘Actual Revenue Field’ filled with an estimate revenue by default. Using this data, you can calculate sales pipeline velocity and measure how this is increasing or decreasing over time.
This can be difficult the first few times you do it, and also relies on exporting data into Excel. If your goal is to access this information within Dynamics CRM, you may run into some issues. Before we start solving these issues however, it’s important to remember that although pipeline velocity matters, it isn’t the be all and end all. Changes in pipeline velocity are important for analysis but always look at the bigger picture too – for example larger deals will naturally take longer to close. Your revenue per sales day could be rocketing, but your pipeline velocity decreasing, and this isn’t necessarily a bad thing in this case. Essentially, don’t beat yourself up about it, and take everything into account when analysing velocity, not just the figures themselves.
How to measure sales velocity within Dynamics CRM
So, you can export data to Excel, but there must be an easier way, right? Well if you know how, kind of. Excel analysis simply requires you to insert figures into calculated fields, but how would you go about doing this in Dynamics CRM?
Firstly, you could add a custom field ‘Sales Days’ to the opportunity entity, but the problem comes when attempting to enter values into this field. Sure, you could write code to subtract the value of the ‘Created On’ field from ‘Actual Close Date Field’ where there is a won opportunity. However, if you do this you will only be able to analyse the velocity of your closed deals. Since velocity is particularly useful for analysing deals that are currently open and that you can act upon, this analysis is incomplete or in effect, useless.
So how can you extend this to include open opportunities? The easiest way to do this is with custom SQL Server Reporting Services Reports. Using this approach you can define a field using expressions such as ‘Today ()’ to return to the value of the current date and when the report is run, calculate averages of numeric fields across groups of data. So SSRS reports seem to be the solution to the problem here.
We hope there is the possibility that there are improvements to features of Dynamics CRM so that this can be made even easier – and there have been hints of such features in the ‘Big Data’ and ‘Analytics’ that look promising!
If you would like to learn more about Dynamics CRM, check out our other blogs (links here)