Data is always at the forefront of sales success. However, you should not simply rely on the results and statistics. You must study the sales process from beginning to end.
Therefore, you must understand how the sales pipeline works and how to manage it to reserve your resources for the most promising deals.
What Is the Sales Pipeline?
A sales pipeline traces the company’s potential sales flow through helpful visuals. This way, it is easier for team members to see if money is going where it should and if the company is taking full advantage of all revenue opportunities.
What Is Its Primary Function?
The sales pipeline’s primary role is to take a snapshot of the most essential sales elements. These visuals are provided to team members.
The elements featured include:
- The number of open deals or sales opportunities
- Aggregate and individual prices
- Each seller’s sales potential during a given period
- The whole team’s sales potential during a given period
- The various stages a company’s sales process goes through
- Each open deal’s sales cycle status
- Actions done to create open deal sales opportunities
- Other tasks that still need to be done to reach the next level of the sales cycle are
Why Is There a Need for It?
When you create a sales pipeline, you put a more tangible, visible look at a company’s growth, profitability, and overall growth, by observing the sales opportunities.
Because of the organized way a sales pipeline puts together data, it helps business leaders identify issues to correct before it is too late. They can also make revenue forecasts based on the current data while recommending and taking strategic actions.
When these pipelines are visualized, it is easier to streamline them to close better deals more quickly.
What Are the Common Stages of a Sales Pipeline?
Sales pipeline stages vary depending on different categories, such as the industry, customer profiles, and many more.
When creating a sales cycle, you must consider your customers’ journey towards actually buying.
Consider a B2B sales pipeline.
Here are its stages:
- Checking qualifications
- Analyzing needs
- Identifying the decision-makers
- Analyzing perception
- Creating a proposal or a price quote
- Closing the deal
- Upselling or making referrals
Again, depending on the industry, your sales pipeline may or may not follow the above stages.
How Do You Build a Healthy B2B Sales Pipeline?
You must build a healthy sales pipeline. Continuing the same thought as the previous section, here is a way to create more successful B2B sales.
Whatever your industry may be, you must begin it by getting to know your customer first. You must come up with your ideal customer profile (ICP). You can get some information by studying your direct competitors. How do they build their sales pipelines?
Examine what your top sellers are doing. What are their sales cycle stages? You can learn from their workflows. Check the best practices and adapt them. Do the same with your most successful competitors.
Of course, you must customize your tools and stages according to your industry and preferences. Establish criteria for lead qualification and formulate metrics for monitoring your individual and team sellers. By setting performance goals, your team will better understand what is considered successful.
Your sales pipeline formula is not exactly the same as another company’s own. There is also always room for improvement, no matter how much we want to see it as the perfect, flourishing model.
So, you must always actively seek lead generation. Align your marketing and sales strategies and improve all tactics, covering all bases, such as outbound sales. Check what campaigns you have, such as email and cold calls, to see if there is a way to improve them. Do not give up. You must always follow up and continue looking for new leads.
How Do You Clean up Your Sales Pipeline?
You might be able to create many leads, but this does not mean that you must keep up them at all times. Not all of them will lead to closed deals, and some will simply waste your resources.
You must clean up your sales pipeline. Keep only the most promising leads to save your resources. With a cleaner pipeline, you can ensure better rates, deals, and a more efficient process. Make sure your information is all updated and accurate.
Here are a few questions to ask yourself:
- Are all contact dates accurate and updated?
- Are there new leads?
- How many leads have been stuck in the same stage for a long time?
You can still send follow-up emails to prospective clients who are stuck. There may still be a chance. If they respond that they are still interested, you can keep them in your leads database. However, if they are no longer interested or do not respond, you may purge them from your pipeline.
Pipeline cleanup and maintenance must be done two to four times a year, or every three to six months.
How Do You Monitor the Sales Pipeline?
You must monitor your sales pipeline. It not only reveals the possible profitability during a specific period, but it can also provide other factors that affect sales flow.
Here are how you can monitor it:
- Set a schedule for monitoring
- Use tools that can provide you with pipeline visibility. These tools often come with a dashboard that provides you with all the updates and data
- Focus on tracking the most critical metrics, which are the ones that affect sales performance and pipeline flow
- Update all account details regularly
- Purge stagnant leads
- Prioritize good deals/leads
- Identify the best teams and sales practices
- Determine which sellers or teams need more support in meeting their sales targets
What Are the Main Sales Pipeline Metrics?
Here are some of the most important sales pipeline metrics to watch out for:
- Number of new leads per sales period (Sales Qualified Leads, or SQL and Sales Accepted Leads, or SAL)
- Number of deals (Number of SQLs a seller is engaged in)
- Average deal size
- Average sales velocity/sales cycle length: How long it usually takes to move prospects from the beginning to the final stages
- Pipeline Value: The estimated total value of active, pipeline qualified opportunities
- Win rate: The percentage of successful leads
- Monthly recurring revenue (MRR): Expected usual revenue, especially if the business is subscription-based
- Time spent selling
- Activity logs
What Is in a Sales Pipeline Report?
The pipeline report provides you with the most critical data, such as productivity and performance, within a given time. The start date and end date are specified. The report also shows the number of active deals for every sales cycle stage. The total value for these deals is also shown.
Others may also include a summary of tasks and metrics that have or can directly impact sales and productivity by the team or individual.
A report may then include the following:
- Prospects per period
- Number of sent emails and which ones were ignored, opened, clicked, or received a response
- Number of calls made to and from the salespersons
Any company should generate a report that will help them see the best path towards achieving their business goals.
How Do You Run a Sales Pipeline Review?
You run a sales pipeline review to check if everyone understands the goals and is executing the actions they need are responsible for. While sellers may find creating reviews a waste of time, they may save you time and resources.
Here are a few ways in which you can make reviews efficient:
1. Research your data. You must be ready for any meeting with your team.
2. Make the information digestible by dividing them into small, logical bits. Ensure that the delivered information is relevant and cohesive.
3. Identify and highlight the problems that have arisen. Indicate the part where things can be improved and what solutions can be used.
The review should not take too long and should focus on the critical parts to ensure impact and quick action. Ensure that everything is done briskly and efficiently so everyone can get back into action.
What Are Some of the Tools that Help You Manage Your Sales Pipeline and Analyze the Risks?
You can help your team develop a clean and efficient pipeline with the help of some technological tools.
For example, every team must use a CRM, but others may have to go even further than that. You can employ a sales pipeline management software. It will focus on making the most of your sales process. Therefore, it will keep your pipeline healthy.
Here are some possible solutions:
The above tools can help you focus on the tasks that will provide the best outcomes for you. This way, you can formulate the most effective strategies. For example, a tool can use data analytics to provide you with the best channels and times you can use to engage your customers positively.
Using real-world data can give you more actionable insight. You also save time by using technology to provide the data you need to keep your pipeline management on point.
While some tools are used to help you with your pipeline management, some are there to diagnose issues and risks.
With the use of tools, forecasting becomes more objective. It will not be tainted by your biases. So, you go through with deals with only facts in mind.
How Do Sales Pipeline and the Sales Funnel Differ?
It is normal for you to get confused with these terms. They are often interchanged and even considered synonymous, but they are not.
A sales funnel is a visualization of your lead qualification process. It is when you sift through many deal prospects. Only customers go through to the other end of the funnel as customers. When they become customers, they can be labeled as Sales Accepted Leads.
Meanwhile, the sales pipeline shows you various stages of the sales process. The SALs are only one part of the whole thing.
What Are Some Common Sales Pipeline Mistakes?
If you are not careful, your sales pipeline may go through several errors. Here are some of them:
- Neglecting your sales pipeline may cause inefficiency and database bloating. You must always ensure that the database you keep is accurate and updated. Keep only potential customers that are more likely to buy your product or service.
- Another mistake is not using proper marketing strategies and relying on your product’s excellence. No matter how good your product or service is, it will amount to nothing when it comes to sales if you don’t promote it.
- Keeping all leads will make your sales pipeline bloated, slow, and inefficient. Do not waste your resources on deals that do not seem like they could push through.
- Focusing too much on high-value leads, however, is also a problem. You must learn to be flexible.
- Using the best technology without training your team is another way of wasting resources. Even a little last-minute coaching will help, but a well-planned training session is better.
- Not following up on leads is another version of not marketing or selling your product well enough. Some potential clients may be busy. Perhaps they need a little more push to get the job done.
- Do not force the sale. Build a trusting relationship between you and your potential clients. They must see you beyond the quick sale.
- Not having a set of metrics to measure your success and processes is another mistake that could cost you.
- Not updating your database of leads will drown you in useless data that may use resources you could have used for something more tangible and significant.
Now, you know the best ways to manage your sales pipeline. If you want to know more about making the most of every stage of the sales process, go to Verde Strategies for more tips.