There is a new powerful sales technique which has attracted the attention of many sales representatives and that is video marketing. Video…
Though every company has its own approach to sales, the fundamental building blocks of the process are more or less the same across the spectrum. In most instances, busy sales teams often have to juggle multiple prospects, each at a different stage of the sales journey. Managing each prospect and keeping track of the opportunities is admittedly challenging.
But with the right sales pipeline tools and management approach, it is possible to organize the process and implement effective management.
What is a Sales Pipeline?
A sales pipeline is a visual representation of every step involved in the sales process. It begins with a prospect’s initial interaction with your brand and runs all the way to closing a deal. The idea behind the term has a lot to do with the fact that contract deals travel along a predefined path (sales process) from start to finish. Being able to visualize each step of the process and track progress makes it possible to manage prospects more effectively.
Sales pipeline management involves making a continuous effort to create a seamless flow to convert prospects to customers. Being able to do this effectively could make a world of difference in terms of revenue growth. According to a study by the Harvard Business Review, companies that have a defined sales process have an 18% higher revenue growth rate than those who do not.
With that in mind, let us analyze the stages involved in a typical sales pipeline and what each one entails.
Stages of a Sales Pipeline
Keep in mind that the stages you include in your own sales pipeline should align with the buying process of your typical customer. Therefore, the ideal structure might vary from one company to the next and you might need to define your own unique model. Below are the fundamental stages that the typical sales process might involve:
Stage 1: Prospecting
In any sales pipeline, the first step is to identify potential customers. Achieving efficacy on this step could set the pace for smooth sailing through the next stages. To begin with, you might need to assess the traits you are looking for in the ideal customer. Having this in mind will help you develop the Ideal Customer Profile (ICP). This essentially refers to a benchmark against which to determine the potential viability of every prospect.
To accomplish this step easily, consider the characteristics of past clients with whom you have successfully closed deals in the past.
Stage 2: Qualification
It is possible to identify prospects who show interest in your product and those who are not yet ready to commit. Identifying and separating these two types of prospects will help you focus your energy on the right group rather than wasting time with unqualified leads.
Does the lead need your product and if so, do they have the authority to make the purchase decision? What is their budget and purchase timeline? Only the leads whose answers match the ICP deserve further attention.
Stage 3: Consideration
Now that you have identified prospects who fit your customer profile, you need to make them aware of your offering and guide them in the right direction. To make a success of this step, there is a need for thorough research and preparation.
How you handle this stage might well determine whether they consider making a purchase or moving on. At this point, a sales team might demonstrate the product, provide the necessary information (technical or otherwise), and engage with the ultimate decision-maker.
Stage 4: Decision
While it might seem that the stage is now set for a successful deal completion, there is still some work to be done. This is the time to identify and eliminate any potential reasons for late deal slippage.
For example, is your lead still considering a competitor or have you successfully ruled them out? Do they need authorization or budget approval from another party? Pinpoint any last-minute barriers that could turn the tables and address them. By the end of this stage, the prospect should make the decision to work with you.
Stage 5: Closing
To close the deal successfully, have your prospect sign a contract. Congratulations, your prospect is now a paying customer! But that is not the end; it is a new beginning. From this point on, concentrate on keeping the customer happy so as to optimize their lifetime value.
A point to note is that it might take repeated follow-ups and other efforts to transition a lead to this stage.
Tips for Staying on Top of your Sales Pipeline
Always search for new deals
The sales pipeline should be consistently growing or at least maintaining the number of deals. Consequently, for any closed deal or attrition, you should always have a replacement in the shortest possible time.
Remember that buyers have more options today more than ever. If at all they are to make the right decision, which is buying your product or service, they need a lot of help from your side. To keep a lead from going cold, constant nurturing is a must.
Set reminders or automate the process to make sure you follow up at the right time. Additionally, have a reason for every call, tying it with something relevant rather than pitching afresh.
Prioritize Promising Deals and Drop Dead Deals
Vary the amount of attention you pay to leads according to how naturally they flow through your pipeline. Focus efforts on prospects that have a higher likelihood of converting rather than wasting time on ifs and maybes.
It’s equally important to know when to let go. It is extremely difficult to drop a lead after spending inordinate amounts of time cultivating and nurturing them. But learning to read the signs will ensure you don’t waste even more time on a pointless pursuit.
Keep an eye on your sales pipeline metrics to get an idea of its health and that of your business. Metrics such as the number and size of deals, average deal lifetime, and average percentage of wins could tell you a lot. Tracking them over time will let you know whether implemented changes are having results.
Improve Pipeline Processes
Always remember that the tricks you use today could well be obsolete tomorrow. So you should evolve with the times and make changes to your sales processes accordingly. Furthermore, finding a unique formula that works for your business is all about improving and adapting processes over time. Make these changes bit by bit so as to test results with accuracy.
Keep it Short
A study by CSO Insights reports that 32.1% of sales reps cite long sales cycles as one of the key barriers to effectiveness. It actually stands to reason that the longer you take to close a deal, the higher the likelihood that your lead will find an alternative or change their mind.
With that in mind, think about how to shorten the cycle and still ensure efficiency. For instance, you could consider reducing the period between follow-up calls.
Steps to Grow Your Sales Pipeline
At this point, you might have realized the importance of sales pipeline integrity over volume. However, as much as it is important to maintain a quality pipeline, you also need to make it grow. Now that you know how to stay on top of your pipeline, it might be great to start off with a full pipeline and aim to close more deals. Let’s consider some time-tested steps:
Pay Extra Attention to Closed-Lost Opportunities
A lost opportunity could be easier to convert than a fresh lead. Try to establish what led to premature closure and find ways to lure them back. The sooner you start making an effort, the higher the chances of success.
Increase the Momentum of Each Stage in the Sales Pipeline
Take time to track the speed at which prospects move through every stage and make improvements. The key to making this trick work is to identify and circumvent potential obstructions. For example, are you spending too long with the wrong lead, perhaps, someone who is not the decision-maker? If so, fast forward the process by identifying the right person earlier on.
Pinpoint Lead Leakage Points and Address Them
Instead of focusing on bringing in more leads, why not try to nurture all of the ones you get effectively? When you have a heavy lead inflow, it might be hard to track each one. At some point, your pipeline might become clogged and make some dropout. Pay the required attention on each and every lead, cultivating them into happy, paying customers.
Keep Learning and Adapting Your Sales Pipeline
Creating a unique sales pipeline that matches your business needs and managing it properly is necessary for business growth. Without that, you might well be missing out on lots of profitable opportunities. However, you need to remember that once you create a winning strategy, you cannot get complacent. Keep learning and adapting to changes to make sure that your approach retains relevance in the long run.
About the author
Jon Englund takes on the challenges of growing a steady sales pipeline as the Sales Manager at Seattle based PipelineDeals. He has years of experience in software-as-a-service (SaaS) and advertising sales.