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How Northwind Trading built a sales pipeline

A fictional wholesaler moves its sales from a shared spreadsheet to a pipeline with stages. A business case with figures, four tasks and model answers, for business administration and sales courses.

Case study1 h 30 minBachelor +1CC BY 4.0

What you will learn

  • Describe a sales process as a pipeline with stages
  • Calculate conversion rates between stages and find the weakest step
  • Recommend one change and say how to measure it

Before you start: The terms in the sales and CRM glossary, or a first lesson on the sales process.

The situation

Northwind Trading is a fictional wholesaler of office supplies with 25 employees. Its three salespeople keep every contact in one shared spreadsheet. Nobody can say how many deals are open, and good leads are forgotten when a salesperson is on holiday.

The managing director, Sam Reed, wants a clear process. Together with the team she defines five stages and counts last quarter's deals in each of them.

Last quarter in numbers

Stage

Companies that reached it

1. New lead

400

2. First conversation

120

3. Offer sent

60

4. Negotiation

30

5. Won

18

The average first order was worth 2,500 euros. Winning a customer cost about 900 euros in sales time and advertising. All names and figures are invented for teaching.

Tasks

  1. Calculate the conversion rate from each stage to the next, and from lead to won.

  2. Which step loses the largest share of companies? Suggest two reasons why.

  3. The team can double the number of first conversations, or raise the share of offers that reach negotiation from 50 to 70 percent. Which brings more won deals if every other rate stays the same?

  4. Recommend one change for next quarter and name the figure you would watch to see whether it worked.

Model answers

  1. Lead to conversation 30 percent, conversation to offer 50 percent, offer to negotiation 50 percent, negotiation to won 60 percent. Lead to won: 18 of 400, which is 4.5 percent.

  2. The first step loses 70 percent. Possible reasons: the leads do not fit the customers Northwind can serve, or nobody follows up after the first email.

  3. Doubling conversations: 240 → 120 offers → 60 negotiations → 36 won. Raising the offer rate: 120 → 60 offers → 42 negotiations → about 25 won. Doubling conversations brings more, but costs more time; a good answer weighs both.

  4. Any change with a matching figure counts, for example: "Define which companies count as a good lead and check each one before contacting it. Watch the share of leads that reach a first conversation."

For discussion

Why can a spreadsheet hold the same data as a CRM and still lose deals?

Reuse this material

CC BY 4.0

You may copy, adapt and share it, also commercially, as long as you credit ManyPI and link back.

"How Northwind Trading built a sales pipeline" by ManyPI (https://manypi.com/edu/northwind-pipeline-case-study), licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/)

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