The sales process can be complicated, so it helps to have a visual representation of each stage. That visualization, often referred to as a sales pipeline, helps reps and managers track their progress and ultimately close more deals. Without a clear visual presentation, sales and marketing teams can have trouble tracking their progress and knowing what the next steps are. As Debbie Qaqish, partner and chief strategy officer at The Pedowitz Group, put it, “You don’t have a business if you are not managing your pipeline.”
You can create, organize and implement a sales pipeline within a customer relationship management (CRM) tool to better track which clients and deals are in the pipeline at any given time. The stages in a sales pipeline depend on your company’s particular selling strategy and process. Regardless of the specific individual steps, your goal is to move a lead through every step of the sales pipeline and earn a new customer.
Managing a sales pipeline management involves generating, tracking and communicating with prospects to convert them into paying customers. Efficient pipeline management allows sales teams to track each deal currently going through the sales process and ensure they can keep new leads coming in. This is important for a growing business.
According to HubSpot Research, nearly three-quarters of companies with fewer than 50 new sales opportunities per month say they didn’t achieve their revenue goals.
There are different ways to manage a sales pipeline. In some businesses, each member of a team will supervise their own deals. More collaborative or unilateral teams may have a singular person who manages the pipeline, and the rest of the team works based on that person’s direction. The specific sales pipeline strategy you use will depend on your team’s specific goals and priorities, but there are a few key best practices to follow.
First, sales teams need to track their metrics. They can then analyze their data to improve their sales strategies. Here are some important metrics to consider documenting:
Sales teams should also review each stage of their sales pipeline to evaluate what’s been successful and what needs improvement. At the end of each month, analyze the closed deals and number of leads moving through the pipeline to forecast sales revenue for the month(s) ahead. Use this information to optimize any slow or broken processes so you can increase your projected sales.
If a sales team manages their pipeline effectively, they’ll have a better idea of how to quantify their high-quality leads and successfully convert them into sales.
“World-class organizations have a repeatable, predictable, and scalable pipeline and pipeline process,” Qaqish told business.com. “They know with a great deal of evidence how opportunities will flow through all the stages of the sales pipeline. With this level of predictability, a company is better able to ensure the right products and resources are available to serve the customer.”
Here are three benefits of keeping a close eye on your sales pipeline.
Without visualization and organization, a salesperson may not be aware of where their prospective deals are within the pipeline. Proper sales pipeline management allows a sales team to clearly see and follow their own progress and to analyze their own pain points. Pipeline managers can step in and help when the situation calls for it.
Building a sales pipeline in your CRM allows teams to collect and analyze the data they gathered during the sales process. That analysis gives your team better insights on how to nurture prospective customers, allowing them to build personal relationships with your clients and better close a deal.
Because every step of the sales process is tracked and monitored – and sales metrics are collected as the process unfolds – it’s easier for teams to forecast future sales accurately.
Managers can see how close their team is to closing sales that are currently in the pipeline, make a more accurate estimate on when those sales will be completed, and understand how that affects the team’s quota. In turn, this additional data means businesses can better predict revenues, create budgets and recognize new areas for growth.
“Sales pipeline management is a critical function of any business, as it captures predicted revenue flows typically from three to nine months out into the future,” Qaqish said.
Accurate sales forecasts can help you plan future business investments and expenditures by giving you a better idea of how much money you’ll be bringing in during a certain time period.
A sales pipeline has seven phases. You should account for each phase in your tracking and management process.
Customers have to know you exist before you can make a sale. Use promotional efforts to target potential customers that fit the profile of your existing client base. Your sales team can also use content marketing and referrals as a way to teach prospective clients more about your company.
Offer e-books, whitepapers, webinars or other lead magnets to amplify a prospective client’s interest and move them through the sales pipeline. These materials allow your leads to learn more about your organization and build a relationship with your brand.
Once you have a list of quality prospects, contact them to set up a meeting or send them a digital pitch. Make a personalized pitch to your potential customers that details how your product or service will directly benefit them or their business. After the meeting, discuss clear action steps with your prospects to move them forward.
After you’ve made your pitch, summarize key information in a sales proposal. This should include your prospects’ pain points, your solution, pricing information and a timeline for implementation.
Often, the first proposal is not the one you and your clients agree upon. Clients may have questions or want to renegotiate some of the terms. Some prospects may want to expand or shrink the scope of the work, adjust the pricing, or manage expectations. Negotiate terms that are fair for both sides. If you cannot come to an agreeable compromise, walk away.
Once both parties agree on a deal, sign the contract. Use a digital signing service to make the process easier. This allows both you and your customers to find the contract in one place, easily make any amendments, and send a copy of the signed contract when it is ready. [Read related article: Electronic Signatures and the Law: What You Need to Know]
After the contract is signed, it’s time to fulfill your order or service. Your sales pipeline manager should collect the information from the sales process to redefine and improve your strategy. When the time is right, follow up with the client to upsell them on additional products and renew their contract before it expires.
First, define the stages of your sales cycle by gathering insights from your team and customers. Then, use performance metrics and specific goals to establish a well-defined process for your team.
Before implementing your pipeline, discuss any thoughts and ideas about the process with your team. You can even test the pipeline’s efficiency by using a previous sale as a trial run.
Qaqish believes that businesses need to recognize a sales pipeline isn’t just a sales activity, but a priority for both sales and marketing departments to work on together.
“Given all the new technology and the change in customer behaviors, marketing is now responsible for influencing a large part of the customer’s journey,” she said. “Marketing is setting up digital conversations and responding to customers’ digital body language and requests well before sales is even involved. Customers are typically 60% to 70% through their buying journey before sales is involved. Leads that are nurtured by marketing have a much higher close rate and a higher average deal size.”
Once you define your steps and key performance indicators (KPIs), start to implement your sales pipeline into your process. CRM software aids success by helping teams build and optimize their sales pipeline effectively.
CRMs automate certain parts of the sales prospecting process. A CRM can automatically send out cold emails, create lead capture forms, and post on social media. Once it collects prospective leads for you, you’ll be able to determine their potential.
CRMs are also valuable tools once the sales process is complete. Set up the software to send your team reminders to follow up, or have it send the follow-ups automatically.
After sales, the CRM is able to collect data and measure results. It can track your win rate, your conversion rate, the length of your sales cycle, and your sales pipeline velocity.
The metrics you track through your CRM gives your team data and analytics that help make your sales pipeline more efficient. Through CRM reports, you can determine which leads are strong, how to expedite the sales process, and where your team can improve.