No matter the industry, the ability of a company to sustain profits and expand its business is strongly related to the number of deals it can close. The most efficient way to streamline and invigorate the sales process is by building a great sales pipeline and automating parts of it.
But how do you make the most out of your sales pipeline when you’re just starting out?
We’ve got you covered! Fortunately, every salesperson can manage their pipeline successfully with the correct tools and knowledge.
In this article, we’ll explain the importance of a sales pipeline and give you sales pipeline management tips that will help you reach or exceed your revenue goals. Let’s jump right in!
- What is a sales pipeline?
- What are common sales pipeline stages?
- How to build and manage your sales pipeline?
What is a sales pipeline?
A sales pipeline visualizes your entire sales process, starting from opportunities and ending with a finalized sale.
It’s often confused with a sales funnel, but the two terms are quite different. A sales funnel is a series of steps your prospects go through before purchasing your product or service. Meanwhile, a sales pipeline refers to a series of steps your sales reps take to convert a lead into a paying customer.
Having a visible, updated, and accessible sales pipeline allows your sales team to track the progress of their efforts, provides an accurate overview of your entire sales process, and helps identify what needs to be done to increase the company’s revenue.
Besides, a sales pipeline:
- Gives explanations on how to attract new leads;
- Allows you to score your leads;
- Shows the number of open deals;
- Shows the monetary potential of different prospects;
- Shows what happens at various stages of the sales pipeline;
- Gives you a clear report on critical financial metrics;
- Explains how to deal with reluctant buyers, etc.
Sales pipeline visualization also aids in determining sales velocity, which is the rate at which a potential client moves through a company’s sales pipeline and generates revenue. With its help, you can reflect on the health and productivity of a sales team and identify areas where the sales process can be improved.
What are common sales pipeline stages?
Sales pipeline stages vary from company to company, depending on the industry, but a typical sales pipeline includes seven steps:
Step #1. Prospecting
Prospecting is the process of identifying, finding, and generating a list of potential clients with the purpose of connecting with them and converting them into paying customers. The better you understand your buyer persona and ideal customer profile, the better you can target your potential buyers.
Our tip here is to run a few different lead-generating campaigns simultaneously. Everybody loves a free sample or a discount, so use these strategies and fill up your email list with prospective buyers.
Step #2. Lead qualification
Lead qualification refers to the process of assessing whether a lead meets your ideal customer profile and has a high likelihood of becoming a long-term customer. Some sales reps underestimate this step, but don’t skip it! If you do, your sales team will waste their valuable time and effort on tire kickers.
Step #3. Needs analysis
Once you find out which leads to focus on, you need to take a step back, conduct a needs analysis, and consider where the customer is coming from and what pain points they are attempting to solve. How do they conduct business, what are their goals, and do they need your product or service?
Step #4. Value proposition
The next step is to define your value proposition based on the information gathered from your needs analysis. Here you should showcase your product or service with a demonstration and prove how beneficial a consumer would find your solution.
Ask your leads what substitute for your product they are currently using and build on that answer. Don’t put too much focus on the features — your clients aren’t interested in your service or brand. They want to know which benefits they will experience once they buy from you.
Step #5. Proposal
If the demo goes well, your clients will likely ask for a business proposal. Send them a detailed quote outlining the cost and the terms, their needs, and how you’ll solve a problem they are experiencing.
This is one of the most critical stages of your pipeline, as it gives you the space to showcase your expertise and convince your client you’re the best person for the job. Don’t be afraid to list your references and explain that you’re an authority in your industry.
Step #6. Negotiation
The lead has shown an interest in purchasing your product and is now ready to negotiate. To create a lucrative sale, you can negotiate on pricing, services, terms, and so on, and then re-submit your proposal.
Step #7. Closing a deal
If all goes well, you’ll finally arrive at the deal closing stage where you sign the deal, and your prospect becomes your customer.
Of course, your job isn’t done here, as you still need to take care of all post-purchase communication, follow-up with your clients, make sure they are satisfied, and build a relationship that leads to repeat purchases.
How to build and manage your sales pipeline? Actionable tips
Come up with a sales strategy
Your sales strategy needs to be well thought of, detailed, and flexible. It’s important to have one to shape your sales efforts and make sure everyone in your team is on the same page. Having a clear sales process makes your team more efficient and gives you a better overview of what’s working and what isn’t.
Build a prospect list
Once you know who your target audience is, start by creating a list of prospects — people who are in the market for your product and have the resources needed to buy it. The list should include their names, contact information, company details, and an assessment of how likely they are to purchase from you.
The more detailed, the better! You want to make sure you’re talking to the decision-maker in the company.
There is no one-size-fits-all approach to generating leads; instead, consider your sector and target audience. If your target demographic spends a lot of time on LinkedIn, that could be the way to go.
Segment and qualify your leads
Not all leads are equally important. In fact, only 79% of marketing leads result in sales, leaving you with the dissatisfying reality of a small lead pool.
Even when you think you secured a deal in the bag, take some time to discover more about your potential consumers instead of jumping into pitching your proposal right away. 24% of forecasted sales go dark, and the lack of lead segmentation and qualification is the reason behind it.
If you focus on promising sales opportunities only, you’ll be putting your resources in the right direction. To help you qualify your leads, you’ll need to invest in good software (we’ll discuss it a bit later!) and choose a lead qualification methodology to rely on — ChAMP, ANUM, FAINT, MEDDIC, GPCTBA/C&I, or NEAT — based on what your business values the most.
And to make your job easier, we’ve analyzed the most popular lead qualification frameworks and compiled a list of questions you can use to quickly eliminate unqualified leads. Check it out here!
We know it’s hard, but you need to give up on dead leads. Don’t put much effort into prospects that will never purchase from you. Make sure to clear your pipeline of unqualified leads regularly. Otherwise, this might undermine the accuracy of your sales analytics, and you won’t be able to determine factors like:
- The speed of your sales process;
- Sales forecasts;
- Which KPIs to focus on, and more.
Invest in a good CRM
A CRM is an absolute bargain for any company!
It assists you in gathering, organizing, and managing all information about your clients. You can trace the buyer’s journey for each prospect you deal with, personalize communication with them, improve their customer experience, and manage data with its help.
Not convinced you need one yet? Let’s list some of the CRM benefits:
- It helps you optimize your sales process;
- It shortens your sales process;
- It shows you where your leads are at a given time;
- It enables you to analyze your sales efforts;
- It helps you prevent losing out on great deals.
If you’re interested in using a new, user-friendly CRM, we recommend you take a look at Snov.io. Apart from multiple pipelines, deal stage management, and unlimited teamwork, it offers a lead generation tool that collects lead emails from any website and integrated email service to scale your outreach with personalized triggered email drip campaigns.
Make sure your sales cycle is short
B2B companies usually have a longer sales cycle than their B2C counterparts, with research showing that 75% of sales take at least 4 months!
You need to be faster than that, or else a long sales cycle can demotivate your potential clients. It’s simple: the longer it takes, the more likely your leads are to change their minds. And with so many competitors in the market, you need to have an optimized sales cycle that leaves nothing to chance.
Try to reduce the number of steps your leads need to go through before they reach the point of buying your product or service. Also, reduce the time between the follow-ups to keep your prospects engaged.
Create specialized content for every stage of your pipeline
Leads at different stages of the sales cycle will be interested in different types of content. This is where your marketing and sales teams should work together to create high-converting TOFU, MOFU, and BOFU content to ultimately elicit interest in your product.
The sales team will know your most significant selling points and which potential issues need to be addressed. Meanwhile, the marketing team will know how to craft content with specific goals in mind, directed at different audiences.
Don’t stick to one type of content; try out various formats to find out what works best! For example, for the first stages of your sales cycle, try out brand awareness content, like blog posts, online ads, infographics, etc.
At the later stages, play up to people’s emotions with case studies, email campaigns, free trials, and demos. Show them how the service or product you offer can be helpful and inspire them to choose you.
Don’t lose out on sales just because you forgot to follow up. Since buyers have a lot of solution providers to choose from nowadays, you need to be persistent. Set up reminders in your CRM to follow up on your qualified leads. It will take up to 8 follow-ups to close a sale, so keep at it! Just make sure to know the line between following up and being annoying.
Write down your metrics
With the influx of new information, you need to constantly keep an eye on your sales results. Make sure to monitor these sales pipeline metrics at least weekly:
- Number of deals in your pipeline;
- The average lifetime of a deal;
- The average size of deals in the pipeline;
- The number of new leads;
- MQL to SQL conversion rate;
- Customer lifetime value, etc.
Keep coaching your sales team
Think of coaching as an essential part of your business because, let’s face it, everyone has room to grow.
As the market changes and customers’ expectations continue to rise, you need to update your sales reps’ training. It shouldn’t only cover outside influences; you should be updating the product training as well.
Over time, you’ll develop new features and services, and your salespeople need to be educated on them. That’s the only way they can sell your product and service. And although your sales team members aren’t providing customer support, they need to be able to answer questions from potential clients.
Now that you understand the importance of a sales pipeline and know how to build one, the rest is up to you. With our 9 tips on managing your pipeline, you’ll easily increase your revenue and speed up your sales process.