Opportunity Funnel Red Flags
While looking at FunnelCake reports, you'll notice yellow and red flags on some opportunities – here's where they come from.
Linear Funnel
First off, we should mention that FunnelCake assumes that your opportunity funnel is linear and all deals should move through every stage in a linear path. To learn more about FunnelCake's linear funnel, read: Linear Funnel Model
Backdated Deals
Backdated deals are flagged when the close date is prior to the created date.
These deals happen when reps fail to create or update a deal in Salesforce until after the deal is already completed – like entering a deal in Salesforce on November 1st when the deal closed on October 28th.
Impact on your organization
When it comes to velocity measurement, a backdated deal is the worst offence a sales rep can commit. When a deal is not created, logged, or closed until after the deal is closed it shows that reps are not using Salesforce as they should – not even close.
Backdated deals give you zero data to use for velocity metrics, meaning you’re missing out on information including:
How long the deal took in total.
How long the deal spent in each stage.
What activities took place in order to close the deal.
This becomes a larger issue for publicly traded companies as it’s also against the law.
What to do
Create an SLA with the Sales team outlining that they will only be paid for deals that are documented in Salesforce by the date the deal is closed. It’s an extreme move, but it will work.
Same Day Deals
Same day deals are flagged when deals are created and closed in the same day.
Same day deals happen for two main reasons:
The deal was legitimately started and closed on the same day (for transactional companies, this could be common).
The deal was started weeks or months ago but didn’t get logged into Salesforce until the day it was closed.
Impact on your organization
If the deal was legitimate it causes little impact on your organization.
If the deal was started but not logged until the deal was closed it causes a number of issues for a company’s ability to forecast and plan for future months and quarters. Since the opportunity is started and closed in the same day, there is no data to inform you on:
How long the deal took in total (used to calculate sales cycle length).
How long the deal spent in each stage (used to calculate stage velocity).
What activities took place in order to close the deal.
In either case, FunnelCake does not include same day deals in the calculation of sales cycle length to avoid skewing the number lower than what it should be.
What to do
If it’s determined that sales reps are not entering deals into Salesforce until they close it calls for some one-on-one rep training from the Sales Manager. Reps should be taught the importance of entering and updating deals with proper activity information so that the business can measure what’s working (and what’s not) at each stage in the funnel.
Skipped Stages
Skipped stages are flagged when deals skip one or more stages in the deal cycle.
Skipped stages happen for two main reasons:
The skipped stage was not necessary for that specific deal.
The rep failed to update Salesforce while a deal passed through one or more stages.
Impact on your organization
If the stage was unnecessary for that deal there is relatively no impact on your metrics. FunnelCake excludes skipped stages when calculating stage velocity to avoid skewing averages below what they should be.
If the sales rep failed to update Salesforce it indicates a process issue that will skew your stage velocity metrics for two reasons:
Deals remain idle with no activity in stages they no longer belong in.
There is no information to tell you how long the deal spent in the skipped stage(s).
What to do
If sales reps are failing to update Salesforce it's best dealt with by one-on-one rep training from the Sales Manager. Reps should be taught the importance of activity information for the business, specifically how it impacts the businesses ability to measure how many activities are optimal to convert deals through each stage, and what activities are the most impactful.
Close Date in the Past
Opportunities with a close date in the past are flagged when they have a Salesforce close date that has already passed.
Close dates in the past typically happen for two reasons:
The deal moves slower than expected and doesn't get updated accordingly.
The deal is was unsuccessful and has been forgotten about.
Impact on your organization
If the deal is moving slower than expected it indicates that sales reps are doing a poor job at setting close dates and an even worse job at updating them.
If the deal was unsuccessful it falsely inflates your open pipeline and impacts your ability to forecast whether or not you’ll reach your upcoming sales targets. It also impacts your ability to nurture these closed lost opportunities since most companies have a process in place that doesn’t allow marketing messages to be sent to open pipeline.
What to do
If the deal is moving slower than expected then the close date should be updated – refer to the FunnelCake projected close date for a realistic date based on historical data.
If the deal was unsuccessful it should be marked as closed lost immediately.
Optimistic Close Date
Optimistic close dates are flagged when opportunities have a Salesforce close date earlier than the FunnelCake projected close date.
The FunnelCake projected close date is calculated based on where the deal currently sits, and using historical data estimates how long the deal will take to pass through the remaining deal stages.
Optimistic close dates often happen because:
The rep is trying to close a deal faster than normal to fit it into the month or quarter.
The rep identifies that the prospect is motivated and feels like the deal is likely to move along faster than a typical deal.
The rep enters a blindly optimistic close date that is unlikely to happen.
Impact on your organization
Whatever the reason for having optimistic close dates in your pipeline, having too many will skew forecasting numbers to show more coverage in the current period than what is likely to close.
Open Leads in a Converted Stage
Open Leads in a Converted Stage are flagged when their status has been marked as converted but they do not have an associated contact or account file in Salesforce.
These leads are left in a no man’s land between Marketing and Sales where neither team has ownership.
Impact on your organization
Since these leads are now marked as converted, they are removed from any of your Marketing lists, but since they don't have a contact or account file in Salesforce, they don't show up in any Salesforce reports your Sales team is running.
When converting a lead in Salesforce, this should never be an issue because you're required to create a new account and contact for the converted lead, or map them to an existing record. Issues can arise when you're using a third-party tool integrated with Salesforce that somehow bypasses this process.
Where to find these deals
Go to the All Pipeline report, make sure the funnel type filter is set to Lead, then use the pre-set filter labeled Open leads in a converted stage.
What to do
If this is a common issue in your database (20+ leads affected), it’s wise to create a report in Salesforce and run a bulk action to all deals affected.
If you only have a few leads affected, simply click into each affected lead you see in your All Pipeline report and convert them in Salesforce one-by-one.