If you’ve been in sales circles long enough, you might have heard sales people using phrases like ‘filling the pipeline with hot leads’, ‘increasing your pipeline’, or ‘getting prospects into the pipeline’ as part of the sales process.
From these phrases, you can already tell that a sales pipeline is an invaluable sales tool. If you aren’t already using sales pipeline strategies, you just might miss out on important insights about your sales process.
In this article, we help you understand what a sales pipeline is, the sales pipeline stages, and the value of sales pipeline management in helping your sales team hit more sales targets and ultimately grow your revenue.
A sales pipeline is a visual representation of how a potential buyer moves through the various stages of your buyer journey. Your CRM software captures these moves, giving you the opportunity to forecast revenue by analysing the stage where prospects are, while being able to predict those that will close deals and at what point.
A sales pipeline has different stages so you can track how sales teams help prospects move from one stage to the next as part of the sales process. This means more accountability while making it easier to achieve sales goals both at individual and team level.
A healthy sales pipeline lets you see where you are at in terms of the number of deals, average deal size, and your sales efforts in the sales cycle. Sales managers can also collate and analyse data on how efficient your sales process is so you can optimise it for a better conversion rate.
Sales pipeline software refers to a business tool that helps sales managers and/or sales reps in tracking and managing individual sales opportunities and their distribution throughout the buying process.
We sometimes refer to sales pipeline software as customer relationship management (CRM) systems.
Now that you know just how valuable a sales pipeline is, you also need to know how to build a good sales pipeline. Here are some components for building a good sales pipeline:
You can never have a one-size fits all for sales pipelines. The structure of sales pipelines will always differ for different industries.
The number of sales pipeline stages you have in your pipeline will depend on several factors including the type of service or product you offer and how you contact leads just to name a few.
Just like a sales cycle length, various sales pipeline stages are industry specific. For instance, while the salespeople dealing in cars will appreciate the importance of a test drive stage, those selling SaaS tools will find the presentation stage more valuable.
Below are the sales pipeline stages of a typical sales pipeline for a B2B sales process:
1. Lead Generation
Lead generation is indispensable. There are several ways of generating new leads for your business. The goal is to let potential customers who fit your Ideal Client Profile (ICP) know about your existence. You may include paid campaigns and unpaid campaigns.
You must create your ICP with specific parameters before trying to reach sales prospects that fit the profile.
2. Lead Qualification
This pipeline stage is vital in any sales process. At this stage, you can tell whether the lead is an opportunity you can win or not.
The best criteria to do this is by getting to know about their budget, their authority – to make sure you’re talking to the right person, their need for the solution you’re offering and their timeline; that is how some they need it.
You don’t want to move prospects that won’t buy to the next stage. Instead, mark them as a cold lead that you can revisit later.
3. Initiate Contact
At this stage of the sales pipeline, your marketing team will contact the lead to let them know you have the solution they’re looking for and possibly begin to forge a relationship. A sales rep can send them emails and follow up with cold calling. They can leverage various marketing tools to introduce themselves, determine response rates and conversion rates. Sales teams must prepare and present the sales pitch. This is the time to make a lasting impression and move to the lead to the next stage.
4. Show value
Now that you have the attention of your prospect, you need to show the value of your offering and show proof that your solution is a right fit for them. Here, you must be ready to offer answers about the unique value and benefits and the challenges you can solve.
For products that your prospect will use, demonstrate how the product works so that prospects have an even better understanding of their needs and how your solution is the best.
Your lead has already expressed interest in buying your products or service, so you must negotiate the price, services, and conditions. The goal is to make a profitable sale.
An invaluable tip for this stage is your ability to manage objections and offer solutions effectively. When you know about challenges in advance, prepare convincing answers, you’ll put forward when prospects voice their challenges and pain points.
You should be flexible and open to negotiate as part of the B2B sales process dynamics. Don’t start with the final sale offer as this can be a hindrance to negotiations.
6. Close the deal
This is where you assess the outcome of your deal. If your sales rep has finalised with the prospect and they are sales ready, they can report the deal as being won or lost. If the prospect is still not ready to buy, don’t dismiss them entirely. Instead, mark them for lead nurturing.
7. Follow up
The B2B sales process doesn’t end after you make a sale. It’s a long sales cycle. You can ride on your paying customers to convert them to prospects for other services by upselling or generating repeat sales. Follow-ups are also crucial if you want to maintain customer relationships.
Make a point of updating your customer regularly and ask for suggestions of the best way to offer support.
8. Automate tasks
Sales pipeline reporting is the backbone of any successful B2B sales process. When your sales reps spend much time on routine administrative tasks, it reduces productivity while creating many bottlenecks. Using sales automation tools will eliminate the bottlenecks and improve productivity significantly.
Sales pipeline management is the estimation of the amount of money you make from existing sales opportunities. It helps your sales and marketing teams to organise and monitor potential buyers to see how deals stack up against their monthly, quarterly, and annual goals.
According to the Harvard Business Review, companies that have an effective pipeline management experienced a 5.3% average growth rate signifying a 15 percent increase.
To ensure your sales management efforts feed into your overall goal of growing your revenue, you must know:
Historical data gives you more accurate predictions.A good sales pipeline management system will speed up the focus on automating your sales pipeline, building relationships, and help in closing more deals within a short time.
Some of the pipeline management tools like CRMs can be valuable when visualising how many deals are open and the status of each, the expected sales, distribution deals and more.
For your sales pipeline management to be effective, you need to:
How do you optimise a pipeline for sales?
If you want to optimise your sales pipeline for sales, you must first ensure that everyone on your team understands the value of the pipeline to everything you’re doing. Here are some ways you can optimise your sales pipeline for sales:
Set the vision.
Ensure your team aligns with the strategy so they can adhere to the process with a full understanding of who, what, when, where, and why.
Make it a team process.
Bring in the expertise of your staff when designing your pipeline.
Open the pipeline to the organisation.
Invite other departments (IT, finance, marketing) to collaborate and bring their expertise in designing the pipeline.
You must review and revise your sales pipeline so you can enhance it.
Design and implement prior to integrating to CRM.
Ensure you have solid processes for data collection and updating along with an excellent pipeline design before getting to CRM automation.
While most sales people will assume they have a good understanding of the sales pipeline they often don’t. It’s worth investing in training new hires and offering training updates to existing sales reps.
Invest in training your sales leaders.
First time sales managers need training on how best they can help sales reps to make the most of the sales pipeline. Sales training ensures more efficiency while providing an opportunity for bonding for the whole team.
Design how your customers’ purchase.
Provide sufficient information on the pipeline design defining how customers buy in your selling environment.
Your sales pipeline process helps drive good behaviour that ensures better opportunity and time management feeding into sales performance.
When you implement, update, and manage your sales pipeline properly, you can seamlessly track all sales activities and deals in your sales cycle. Revise your pipeline and hone it to become more accurate and relevant to closing deals, meeting your sales targets and growing your revenue.
Book a meeting with Growthonics today and see how SDR outsourcing can help your ROI and save you money.