How to Build, Manage and Track Your Sales Pipeline
If there’s one thing we can all agree on, it’s that sales are unpredictable. One month, you’re hitting the ball out of the park, achieving all your lead generation and revenue goals. Next month, you’re struggling to break even, closing few to no deals.
Things get even worse when you can’t wrap your head around the problem and can’t figure out which area to improve. But, that’s where your sales pipeline comes into play. Knowing the stages of your sales pipeline allows you to pinpoint specific issues and fix them.
So how does it work and how can you build an effective sales pipeline for your business?
What Is a Sales Pipeline?
Generally speaking, a sales pipeline is a series of steps that make up your sales process with each step designed to move a lead forward in the buying journey.
In other words, a sales pipeline serves as a guide for salespeople. By tracking potential buyers along their journey, a salesperson can educate and assist the consumer as needed.
Usually, a sales pipeline is visualized as a horizontal bar or a vertical block list, divided into the stages of the sales process. And many businesses use a Virtual Call Center, in order to help move clients along their sales pipeline.
Potential customers move from awareness, to consideration to decision, as they learn more about your service and how it can help them. As a result, salespeople can easily find bottlenecks in their communication and make the needed adjustments.
Why Is a Sales Pipeline Important?
Sales pipelines are essential tools that increase a team’s effectiveness and allow for better resource allocation. According to Harvard Business Review, there is an 18% difference in revenue growth between companies with sales pipelines in place and those without. Additionally, companies that mastered at least three practices within their pipeline, saw 28% higher revenue growth.
But, while revenue growth is the ultimate goal, a sales pipeline is important for other reasons too:
- Accurate Forecasting: A sales pipeline provides team leaders a glimpse into each sales rep’s activity and how close they are to meeting their quota. Using that information, they can make accurate revenue forecasts and generate data for other company departments, like finance and manufacturing.
- Effective Resource Allocation: Knowing where your potential customers are during the sales process allows you to allocate resources to close deals. For instance, sales managers can decide which deals are most important and require more time and oversight.
- Efficient Sales Team Management: Each sales stage has a few actions that need to be completed in order to finish the stage and keep potential buyers moving through the pipeline. By keeping track of these actions, a sales manager can better identify potential challenges that reps might face.
- Better Sales Process: If your sales are experiencing a bottleneck, the sales pipeline allows you to find which areas are more congested. For instance, if your team has a hard time convincing prospects, you might want to invest more time and energy into the negotiation stage. Likewise, if you already have a steady stream of prospects, you can spend less time finding new potential buyers and focus more on actual retention.
What Are the Sales Pipeline Stages?
More often than not, each company has its own take on the sales pipeline, depending on its business goal. But most sales pipelines share similarities among companies. The following are a few common stages that provide insight into typical sales pipelines.
During the prospecting stage, potential buyers discover your product or service through ads, public relations, referrals, or similar promotional activities. As a team leader, your job is to determine targeting parameters to deliver your message to buyers who fit your ideal customer profile.
Some parameters include the needs your product or service fills, the audience or industry you serve, where your market spends most of its time, etc.
2. Lead Qualification
To move leads to this stage, it helps to have a lead magnet that interested people can review to learn more about your product or service. Lead magnets can be anything from white papers and e-books to webinars or free consultations.
Not everyone who expresses interest will qualify for what you offer, so keep in mind that your goal at this stage is to curate leads, so you can focus on those who will most likely accept your offer.
3. Demo or Meeting
Next, you have to schedule a meeting or demo to present your products and services to your leads. This usually comes in the form of calling your leads through phone or VoIP solutions. At this stage, you also want to evaluate your leads and decide if there is a strong business case for them to receive your offer.
The proposal stage is essential, as you’ll have to explain how your company’s product or service can address the potential customer’s needs. You will also need to prove that your price-to-value ratio is better than that of your competitors. During this stage of the pipeline, it’s important to state your competitive advantages to make your company and product stand out from similar vendors.
Once you’ve launched your proposal, you will have to negotiate with your potential customer and come to an agreement. Now is the time to expand or shrink the scope of the project, adjust prices, and manage expectations. But, be careful not to change your initial proposal too much, or you could alienate your prospects.
6. Closing the Deal
If everything goes smoothly, you’ll come to an agreement and close the deal. Then, you can prepare to fulfill the order and make all the necessary arrangements for delivery.
7. Retention and Post-Purchase
Although the sale is closed after the contract is signed, a good sales team doesn’t stop there. Your reps should monitor your client’s account and provide exceptional service. They should try to offer new services and upsell your existing clients on premium solutions.
And when the contract is about to expire, your reps need to prepare renewal options and offers. The main goal is to create a network of customers that only use your services and refer your solutions to other potential buyers.
How to Build a Sales Pipeline for My Business?
As previously mentioned, every successful business needs to have its own sales pipeline. This usually means you also use a CRM and Phone system. So, let’s take a look and see how you can build your own sales pipeline and improve your sales process.
1. Identify Your Target Market and ICP
First, you will need to identify your target market and use that information to create the Ideal Customer Profile. By doing that, you get an estimate of how many customers your business will cater to. Usually, the CEO and founding team are responsible for creating and then updating the ICP and target market.
2. Identify Your Target Companies
Target companies are corporations that you intend to work with and match your ICP. More often than not, the CEO, Vice President of Sales, and Chief Revenue Officer are handling this process.
3. Do Research
Now, you have to create an internal list of target companies by working through target contacts. The list includes names, contact information, and even personal information regarding your targets. And while your team can build the list, you can also find companies called lead vendors that sell internal lists of contacts.
4. Reach Out
Once you have your list, it’s time to reach out by phone, text, email and physical meetings when possible. Usually, most businesses do that every 90 days, focusing on at least three contacts from one single company.
5. Find a Routine
At this stage, you should divide your pipeline into segments and focus on value-based selling. Ideally, each sales rep needs to be a good communicator and should focus on building relationships with potential customers.
6. Build Momentum
Last but not least, you have to move your Sales Qualified Leads to the most experienced Account Executive in order to increase momentum and get closer to deal completion. The Account Executive needs to follow up and evaluate leads until the deal is closed or lost.
What Is Sales Pipeline Management?
After your sales pipeline is up and running, you’ll need to constantly analyze and optimize each of its stages. The process which handles that is called sales pipeline management and allows salespeople to track deals and leads.
And while every company has its own management technique, there are a few tips that apply to any type of sales pipeline.
1. Track Your Sales Pipeline Metrics
If you want to master the sales pipeline, you need to understand the numbers and components of the funnel. For instance, it’s essential to know the average conversion rates, lead generation, and the number of deals.
And since keeping track of all these numbers is hard, it’s wise to invest in a high-quality sales CRM. In fact, most modern CRM’s provide you with reliable metrics, are able to spot-check problems, and give you insight into how to fix them.
2. Regular Pipeline Reviews
Pipeline reviews usually focus on opportunities that are at the top or middle of the pipeline. Those reviews allow you to check the quality of opportunities added to the funnel and influence the outcome of every new sales opportunity. In other words, pipeline reviews give you a comprehensive view of the entire sales process, which you can use to optimize your pipeline.
3. Create a Management Operations Manual
You can improve the way your reps interact with potential customers by creating a formalized management operations manual. There, you can explain every single step and procedure that your team needs to follow.
Also, you can include case studies or scripts that help sales reps overcome bottlenecks during specific stages of the pipeline. Over time, the operations manual will become a reliable solution whenever your reps encounter a problem.
Overall, it’s easy to see why sales pipelines are so important in today’s market. Not only do they allow you to check each step of the sales process, but they also give you the opportunity to change your strategy on the fly. And while building and managing a sales pipeline can seem hard, it is definitely worth the time investment.
What are some sales techniques you’ve used to generate sales? Let us know in the comments. And if you have any ideas for future articles, write us at email@example.com. We’re always looking for new ideas!