In B2B sales, there is very little scope to play it by ear.
Every action, every decision, and every plan must rest on a well-defined and well thought out process. In fact, a Harvard Business Review study highlighted that companies that define and follow a formal sales process register an 18% increase in revenue growth.
So now is a good time as any to get your B2B sales processes organized.
Several activities form the backbone of a sales process. However, sales pipeline creation and maintenance are among the foremost and most crucial aspects worth addressing first. A successful B2B business rests on the foundation of effective sales pipeline management. It is a tried and tested organizational strategy that can put your business on the fast-track to success!
Hence, unsurprisingly, a study conducted by Vantage Point highlighted how 72% of sales managers conduct sales pipeline review meetings several times a month. Naturally, such review meetings can only bear fruit when your staff has a clear understanding of the sales pipeline and the B2B sales pipeline stages that are intrinsic to your business.
Therefore, to aid you in this quest, here is an elaborate guide on sales pipeline, sales pipeline stages (with example), and the best practices for sales pipeline optimization.
So, without any further ado, let’s get started!
What is a Sales Pipeline?
In simple words, the sales pipeline involves the systematic mapping of a prospect with respect to their position within your sales process. It gives you an insight into the number of open deals available and prioritizes the ones that call for immediate attention. Using these inputs, the sales team is capable of meeting their quota and delivering appreciable results.
On the other hand, B2B sales pipeline stages are a visual representation of the steps that a prospect clears to transition from a lead to a customer.
A sales pipeline eliminates the need for any guesswork required in driving your sales process. It offers a data-driven overview of the effectiveness of your sales process and the sales team. A clearly-defined sales pipeline will:
- Increase accountability
- Predict business revenue
- Simplify the sales process
- Keep track of the leads
- Refine the marketing strategies
How is Sales Pipeline Different From Sales Funnel?
At first glance, Sales Pipeline and Funnel may appear similar. However, they differ from each other based on extremely minute details.
A sales pipeline is typically represented by a straight pipe indicating the flow of different stages of the sales processes. As a result, it marks the customer journey as leads learn about your company, enter your sales process, and losslessly become paying customers. Thus, it is a blueprint outlining the various steps that your sales team must follow while qualifying leads to subsequently closing deals.
On the other hand, the sales funnel is denoted by an inverted pyramid representing the number of prospects advancing through the sales pipeline. It operates on the assumption that the volume of prospects that your salespeople will work on will progressively decrease at every B2B sales pipeline stages as the sales process continues. Therefore, it fortifies the belief that salespeople require 3x as many prospects at the mouth of the funnel as they may need at the bottom.
In simpler terms, you can say that a sales pipeline is an idea or a hypothetical situation, where there are minimal to none losses. On the other hand, the sales funnel is a more practical approach as it represents the loss of prospects along the sales process.
However, the sales funnel does not necessarily have to hold a funnel shape. Some sales experts also suggest that a wide-brimmed champagne glass would be a better metaphorical representation of the sales “funnel.”
The idea is supported by the fact that successful sales rep have a 1.25 to 1.5 times the ratio of opportunities to deals within the sales pipeline. In their case, the drop off takes only at the qualification stage of the sales pipeline phases.
Hence, if you have a set of skilled and well-trained sales representatives, who are given a set of cutting-edge sales intelligence tools like Clodura, you can expect better sales pipeline and funnel alignment.
Why Sales Pipeline Matters?
For most B2B businesses, a pipeline is a lifeline.
Here is a quick overview of why sales pipeline must be given the importance that it truly deserves:
- According to Harvard Business Review, companies with effective pipeline management witness an average growth rate of 5.3, which is a 15% increase.
- The same study also highlighted that companies with well-defined sales pipeline phases register a 28% increase in their revenue growth.
- It allows companies to review the individual performance of their sales representatives and the overall performance of the whole team. Therefore, they can use it to forecast the 30, 60, and 90-day revenue generation projections.
- By mapping the position of a prospect against the B2B sales pipeline stages, companies can carry out targeted resource allocation. Further, it enhances sales team performance through hands-on management.
- In addition to revenue projections, sales pipeline analysis can highlight the bottlenecks within the sales process that are stagnating the flow of your deal velocity.
B2B Sales Pipeline Stages: A Systematic Breakdown
Typically, sales pipeline stages are a reflection of your sales process. However, there are a few core principles that define a healthy sales pipeline and remain consistent across all business and sales models. So, implementing a standardized B2B sales pipeline stages and refining it according to your business requirements is one of the best places to get started.
Here are the typical sales pipeline stages that every sales pipeline must include:
Naturally, you need to fill your sales pipeline with prospects for it to be effective. Hence, [sales prospecting](The Complete Guide to Successful B2B Sales Prospecting – Steps, Methods, Tools & Tips) is one of the first sales pipeline phases.
In this B2B sales pipeline stage, the sales representative carries out the preliminary research on the people or businesses that would be interested in purchasing your product or service. From creating a buyer’s persona to rounding up the target audiences - this stage allows you to feed the best prospects into your sales pipeline.
READ NOW: A Step-by-Step Guide to B2B Sales Prospecting – 10 Essential Steps of Sales Prospecting Process
For those looking for the prospecting sales pipeline stages example, here is a list of the activities involved:
- Creation of an Ideal Customer Profile (ICP)
The quality of leads entering your sales pipeline will determine the accuracy of your revenue predictions and the efficacy of your sales process. Hence, you need to create a persona of your ideal client based on key demographic factors such as industry, geographic location, profession, budget, etc.
Through tools like Clodura, companies can search their customer and prospect details to filter in the prospects that share common traits with your Ideal Customer Profile. It also offers you insights into the various channels that supply high-quality leads to your sales pipeline.
- Lead Generation
While prospecting follows a one-on-one approach, lead generation will allow you to adopt a one-to-many model to improve your prospecting efforts. It makes use of your ICP to add a broad set of prospects to your sales pipeline. Inbound lead generation is also more effective since it allows you to reach out to warm inbound leads that are already checking out your offerings.
Common techniques for lead generation includes capturing visitor data through websites, webinars, advertisements, social media posts, and email campaigns.
- Sales Outreach
Defining and searching for prospects is not a one-off task. Your sales team needs to inculcate it as a habit and dedicate a set amount of time daily for prospecting. Prospecting techniques include cold calling or warm calling, cold emailing, events and webinars, and referrals.
After you have filtered in your prospects, it is time to see if the leads are ready for sales engagement. Only 27% of B2B leads are sales-ready. Therefore, lead qualification is one of the most crucial B2B sales pipeline stages in identifying these leads. In this stage of the sales pipeline, your sales rep can determine whether the lead is capable of converting into a paying, long-term, and satisfied customer.
Efficient lead qualification saves your bottom line and your sales teams’ time. They can make a smart allocation of resources depending on the value and state of a lead.
The qualification sales pipeline phase involves the following activities:
Now that you have shortlisted the prospects, you need to fill out all the details that might be missing in your database. Make use of platforms like LinkedIn to check on your lead, their industrial background, their pain points, their existing solutions, etc.
You may also make use of a lead scoring technique to assign points to assess their sales-readiness. As a result, you can ascribe priority and capitalize on the low hanging fruits before moving on to the leads that need more time.
- Qualifying Leads Through a Framework
Lead qualification frameworks, like BANT, are a quick and straightforward strategy to locate the prospects that are worth your time and effort. The BANT framework was conceived by IBM and is an acronym for:
- Budget: Do they have the budget to purchase your product or solution?
- Authority: Do they possess the authority to make purchase decisions?
- Need: Does the prospect need your product or service to solve their problem?
- Timeline: When does the prospect intend to buy?
These qualifiers can help you assess whether the prospect is fit for your business and sales-ready or otherwise.
Sometimes, the lead may need to be nurtured to make them sales-ready. Your sales team can achieve this goal by amping up their marketing efforts and engaging with them. Directly approaching them could also give you an insight into what may be holding them back from going ahead with the purchase.
Ensure that every contact extracts and adds value to all the information you already have on your lead. Conversing with your leads may also push them along your sales pipeline. However, understanding their pain points and in-depth knowledge of your product/service is a pre-requisite to initiating contact.
If your lead has made it through to the proposal stage, they have cleared the toughest of the typical sales pipeline stages. In this stage of your B2B sales pipeline, you ask your well-qualified lead to become your customer.
Sales reps forward the proposal when they notice sales triggers indicating that a lead is ready to buy. A standard proposal contains the key details such as what your company offers, the price at which these products/services are available, and the period for which it will be supplied.
You may also put forth your business proposal through a live demo, a face-to-face meeting, call, or even chat. According to research conducted by the University of Minnesota, proposals containing visual aids are 43% more likely to convince your customer.
Here are a few more tips and best practices to maximize your chances of getting your proposal signed:
- Use a standard proposal template to expedite the time taken to forward it. However, put in the effort to customize the proposal for the lead.
- Keep the proposal short but loaded with crucial information.
- Stick to simplicity rather than including complex language or jargon in your proposal.
- Follow a customer-centric approach to pitch your product/service as a solution to their pain points.
- Create a tiered pricing package for varying business requirements and list these from highest to lowest.
- Include an FAQ section to address common queries.
- Detail the next line of action, the steps to take, timeline, etc. to keep the process moving.
- Ask for a sale.
Remember, while it may feel that you have reached the final stage of your sales process, even the slightest of details can derail your efforts. Such a curveball brings us to the next phase of the B2B sales pipeline stages - Negotiation.
Negotiation may seem like one of the most vicious sales pipeline phases in your sales process. However, it is not the time to lose hope just as yet! It is rare for the first proposal to get approved without a hitch.
It takes an average of 84 days of pursuing a lead to convert them into customers. So you may just be on your 82nd or 83rd day, which is basically inches away from success!
To stand the test of negotiation, your salespersons can employ the following tactics:
- Planning and preparing for the negotiation even before the offers start doing their rounds.
- Allowing the prospect to speak first so that you do not offer more than what is required to close the deal. However, lead the negotiation from the front.
- Reading between the lines to understand the sales objections and addressing them to keep the conversation flowing.
- Creating a sense of urgency by offering attractive, limited-time concessions. However, avoid giving a range and stick to defined figures.
- Building value for the product by offering solutions apart from discounts.
- Developing mutual trust and respect by asking for an equivalent trade in lieu of a concession.
- Keeping the conversation light-hearted and lively to establish an amicable environment for negotiation. In doing so, you can develop a rapport with the client.
- Reviewing and creating a new contract only after all the rounds of negotiation are over.
- Walking away if the demands are unprofitable or unrealistic for the company.
Now that both parties have agreed on the final proposal, it is time to sign the dotted line!
However, even at this crucial B2B sales pipeline stage, the deal could go either way - the lead converts into a customer, or they hold off the purchase for some reason.
After successfully closing the deal, here are a few ways through which you can follow up on your new customer:
- Send them a polite “Thank You” message (or a hand-written note for a more personal touch) immediately after closing the deal.
- Offer post-sale customer support such as training or onboarding to get them up and running in no time.
- Follow up on the customer after 15 to 30 days of purchasing the product to accept their feedback and to check on their user experience.
As you can see, it is not only about acquiring a customer and closing a deal. Sales also include building a memorable customer purchase journey and nurturing happy, satisfied customers.
If you were unable to close the deal for some reason, you can once again qualify the lead and assess where they stand as a prospect. Refeeding them into the intermediate B2B sales pipeline stages could also be a smart move.
Here are a few ways to stay visible to these leads without getting on their nerves:
- Follow up with the lead and check in on them to nurture personal relationships.
- Review the content of your previous interactions, such as mails, presentation materials, and call recordings, to decipher where you may have committed a mistake.
- Encourage the lead to share feedback regarding what they enjoyed with the sales approach and what could be improved.
Customer retention is one of those typical sales pipeline stages that companies may skip or forget to prioritize.
You need to ensure that you keep your new and old customers even after closing a deal. Considering that 20% of your existing customer base will contribute to 80% of your profits, you need to keep your customers happy!
Therefore, customer retention should be a fitting end to your sales pipeline. It grants you the following benefits:
- Your customers will emerge as brand loyalists and advocates.
- Engaged customers are more likely to purchase add-ons and additional services.
- Positive brand engagement improves your brand positioning.
- Feedback collected from your clients will improve your product/service, business model, or sales process.
- Increased ROI and an improved bottom line even after making the sale.
Pro Tips on Sales Pipeline Stages Best Practices
After incorporating the above sales pipeline stages example, you need to develop a discipline that standardizes and revolves around tracking the progress along the B2B sales pipeline stages.
For this purpose, here are a few sales pipeline stages best practices that sales managers can implement to use your sales pipeline better:
- Inspect your sales pipeline periodically, and conduct regular reviews with the sales rep to identify the opportunities and obstacles that are present within the pipeline.
- Collaborate with the salespeople to check the status of the prospects within the pipeline, and the inputs or resources required to keep them moving.
- Prioritize active leads and remove the stagnant leads. You may not necessarily eliminate them from your sales process, but it would be smarter to store them away from the high potential leads to avoid any distractions.
- Follow up and check on the promising leads to stay on top of their minds.
- Measure all the KPIs that will allow you to evaluate the results and performance of your sales team. Typically, the key metrics worth monitoring are sales velocity, sales close-ratio, lead response times, leads-to-qualified leads ratio, deal fallout, etc.
- Make use of high-tech tools and platforms to automate non-sales related activities and minimize redundancy.
- Analyze the data generated by the different B2B sales pipeline stages to make data-driven decisions and changes.
- Optimize and streamline your sales pipeline to keep your sales cycle short. Implement active management to keep the prospects moving through the pipeline.
- Continue feeding high-quality prospects into your sales pipeline to maintain a steady flow of leads.
A sales pipeline is an excellent tool to visualize your business’ sales process. Clearly defining each stage of the sales pipeline will make it easier for your sales team to deliver results.
Now that you understand the six main B2B sales pipeline stages, you can implement a robust strategy to seek out prospects and close more deals. Once these typical sales pipeline stages have gained traction, you can build your own custom sales pipeline, depending on the feedback you receive and the results that you observe. Finally, make it a point to refine and maintain your sales pipeline to avoid sales stagnation.
To learn how Clodura can streamline and add value to your sales pipeline, sign up for a free, personalized demo.