Are you not getting enough sales? How could that be that some of your competitors close numerous deals day in day out, month after month? What do they do that you don't? What is their secret? The answer is they have an established sales pipeline. So what is a sales pipeline and how do you get one?
A sales pipeline visually represents the steps you need to take to sell your product or service. It shows you your current sales opportunities and the deals you can close. It can help you become more consistent and efficient in the way you sell. Also, with the help of a sales pipeline, you will be able to measure and predict your success.
Building a sales pipeline is vital for your business because you need to know who to reach out to, what your prospects are looking for, when to schedule meetings with them, when to follow up, how to find out whether the relationship will last or not, and how fast the whole sales process goes. If you neglect to use a sales pipeline, you have very little or no statistics about how efficient your sales process is and whether you move your business in the right direction.
When making a sales pipeline, you will need to include all of your sales cycle stages. If you do not know how many stages your pipeline should contain, it might be helpful to note that on average companies try to limit their sales process to five-seven steps.
A typical five-stage sales pipeline can look as follows:
Another commonly used model contains seven stages. They are:
In fact, these stages may be different for different industries, but the principle is the same.
If you understood the main idea and the purpose of sales pipelines, we could get to further steps that are essential for building an effective sales pipeline.
Do you know what kind of customer your business needs? When defining your ideal buyer, consider the industry, location, job title, goals, pain points, and challenges. Why is this important? When you make contact with your prospects, you need to present some value. And if you know their industry, pain points, etc., you’ll find it so much easier to show them precisely how they can benefit from your product or service.
Since your interaction with your prospects varies depending on what life cycle stage they are in, you need to segment your database correctly. Depending on your business structure and needs, you may want to use all the life cycle stages below, only some of them, or create your own values.
The most common life cycle stages are:
A critical step on the way to building a strong sales pipeline is defining its stages.
To define them, imagine how a lead travels from prospect to customer. As spoken earlier, a sales pipeline may contain the following stages: “targets,” “contacted,” “meeting agreed,” “proposal sent,” “closed,” “post-sale,” and others. For more details, see the paragraph "The most common types of a strong sales pipeline" of this article.
Are you sure your content speaks to your buyers at every stage of their journey? Does it guide them forward? Before producing content, think what type of information your prospects need during each phase. What are their concerns? How can your content address these concerns?
Let's divide all content into three groups:
1) Awareness content
This type of content should be created for those who don't know your company and your product yet. At this stage, work on website content, social networks, blog posts, presentations, explanation videos, interviews. Your task is to get this info seen by new and potential customers.
2) Consideration content
Once people have gotten to know you (provided their email address or a phone number, downloaded some app from your site, subscribed to a newsletter), it's time to show them how they can benefit from your product or service. During this stage, you can demonstrate your knowledge, work, and happy clients. Prepare white papers, persuasive testimonials from satisfied customers, reports, and various forms of social proof.
3) Decision content
There are two types of decision content:
1) Pre-purchase content (sales presentations, demos);
2) Post-purchase content (training courses, E-books).
A sales pipeline can also provide insight into how many deals your sales team expects to close in a given time frame and how close you are to reaching your revenue goals. To be able to use your sales pipeline for building forecasts, you need to know how to manage it in the right way.
Sales pipeline management is about tracking open opportunities as they move through your sales process. The proper pipeline management is one of the best ways to increase revenue because it helps you find the areas of weakness by analyzing the sales pipeline.
Measuring the effectiveness of your sales process will help you determine the quality of your content, create more accurate sales forecasts, know whether you are at risk of missing your sales opportunities, and so on. But what should you measure?
Below are the numbers you need to know:
Luckily, almost all CRM (customer relationship management) systems have built-in pipelines that can be easily customized according to your needs. So you can analyze the progress of your prospects as you lead them toward becoming your buyers.
To keep your sales pipeline healthy and understand what works well and what needs to be improved, regularly review it with your marketing and sales teams. Low on leads? Your marketing team needs to try something new. Taking too long to go from prospect to buyer? Your salespeople should try creating urgency or take some training on closing deals.
A sales pipeline size is indeed one of the key measures of a pipeline’s health, but how big should your pipeline be? Of course, there is no specific number, and you need to determine the ideal pipeline size by yourself.
1,000 deals ÷ 12 months = 83 deals per month
4,000 proposals ÷ 12 months = 333 proposals per month
16,000 meetings ÷ 12 months = 1,333 meetings per month or 333 meetings per week
32,000 calls ÷ 12 months = 2,667 calls per month or 127 calls per day (if we have 251 working days in a year).
83 deals per month ÷ 50 reps = 2 deals per month
333 proposals per month ÷ 50 reps = 7 proposals per month
333 meetings per week ÷ 50 reps = 7 meetings per week
127 phone conversations per day ÷ 50 reps = 3 calls per day
You are probably wasting your valuable time and efforts if you are trying to sell to a person who has a zero decision power in his/her organization. To find out who is the ultimate decision-maker, start with checking your prospect’s company website. Look for a page that lists the staff and executives. If there is no page that displays the staff list, check LinkedIn and the company's news releases. Many people think that they should talk to a president or an owner of the company. However, if you sell, for example, office supplies, the person responsible for making a decision is likely the office manager and not the owner of the firm.
Another common mistake is trying to sell too hard and too early. Instead of getting prospects to buy as soon as possible, focus on educating them and demonstrating what benefits they will get from buying your product or service.
The length of a sales cycle is one of the most important indicators of a healthy sales process. If your sales cycle is too lengthy, but you want to close sales faster, you need to find the ways to speed up the sales process. The easiest way is to check each stage of your sales pipeline and decide where you can add more human touch elements or automate some activities to save much time. The other essential key to achieving the sales cycle speed is knowing the reason why people should buy from you. When they have a clear understanding of the value you are offering, they need less time to make a positive decision for your product or service. Spend some time talking to prospects and customers. Try to find out what they like and dislike about your product, team, educational content you provide, and everything else. Make improvements.
To be able to drive improvements or stay motivated, you need to know exactly what's happening at each stage of your sales pipeline. A good CRM system can be a great help here.
A lot of sales reps aren't big fans of cold calling, qualifying opportunities, or asking for referrals. As soon as they start getting more and more orders, they hope they'll never have to do prospecting again. However, most salespeople often forget that persistent prospecting got them to that point. As a result, when the quarter is over, and all sales are closed, they are confronted by reality: they have no one to sell to. Therefore, your sales team should spend its time not only closing every deal in a sales pipeline but also prospecting.
Your follow-up makes your prospect feel important and builds your relationship. Not following up results in leaving a lot of money on the table. So make sure you document all follow-ups using your CRM and complete the agreed actions for all clients and prospects.
To save time, automate as many activities as you can. For example, you can automate your follow-ups.
Of course, you can manage your sales pipeline in an Excel spreadsheet, but the smartest way to do this is using a comprehensive CRM system. How does it help? With a CRM solution, you can track the status of every deal, prioritize leads, create various charts and reports, set automated reminders, and so on.
The more you know about your potential buyers, the better service you can offer. As a result, they will be more loyal to you.
By giving your best performers more or better-qualified leads, you can optimize for conversions.
Additionally, this rewards the highest-performing sellers and encourages them to close more deals in the future.
How well do you know your leads? Who are they? How do they engage with your business? To keep them organized and save time, you need to determine how much a lead is interested in your product and if he/she is sales-ready. You can group the leads by the interest they shown in your product, their place in the buying cycle, and overall ﬁt with your business.
According to studies, sales reps have more chances to win deals if they contact the lead within five minutes after he had shown interest. Have you already tested this with your sales team?Conclusion
Building a successful sales pipeline is crucial for every business. When organized properly, it can help you become more consistent and efficient in the way you sell.
To achieve a healthy sales pipeline you should: