Is your sales pipeline management on track and going well? A Vantage Point Performance and the Sales Management Association survey reports that 44% of business leaders think their company is ineffective at managing their sales pipeline.
Another survey of B2B companies conducted by Harvard Business Review asked executives to rate their company’s YoY change in revenue on a scale of 1 to 7, along with rating their organizations’ efficiency in sales pipeline management.
The survey found that companies with ineffective pipeline management practices had an average growth rate of 4.6, while companies with effective pipeline management practices saw an average growth rate of 5.3, almost a 15% increase. More surprisingly, organizations that had gotten the hang of effective pipeline management saw a 28% growth in revenue.
How do you think these top companies were able to enjoy such a huge success?
It’s because they had built a robust sales pipeline for themselves.
A sales pipeline assumes a central role in any business.
As per research conducted by Vantage Point, almost 72% of sales managers revealed that they held sales pipeline review meetings with their sales personnel on various occasions every month.
The sales pipeline of your business is what makes the difference between streamlined deal flow and an anxiety-ridden quarter. It is the principal activity that ascertains the performance of your sales team over a certain length of time, and it determines how much revenue your organization is going to bring in each quarter.
In the digitally-connected world of today, marketing and sales processes are more data-enabled than ever before. What this indicates is that not only do sales reps have unprecedented access to a whole world of information to exploit and work with, but they are also far more responsible for it.
According to a recent report by CSO Insights, “Executives are under more pressure than ever to understand the pulse of their business” – and at the core of every business is the sales pipeline.
But the question that follows is how does one create a simplified sales pipeline that won’t let opportunities slip by?
The answer lies in effective sales pipeline management. It allows sales reps to look for those open sales opportunities that are at risk of closing up while also focusing on their existing deals. It helps them identify their challenges and solve them at every stage of the sales funnel, generating revenue in a much more anticipated manner throughout a quarter.
Sales pipeline management is also a great way to organize your entire sales process and also make it more efficient. There are many ways to develop a robust sales pipeline to cash in on potential leads while keeping an eye on leads that need to be warmed up. You need to conduct a veritable analysis of how strong or weak your current pipeline is before moving to make it better.
Here, we’ll look at how you can manage and review your sales pipeline to guarantee a persistent flux of good quality opportunities. While remaining well-informed of your pipeline might appear like an administrative task at first, it will, however, get easier as your process gets better.
What Is a Sales Funnel?
The sales funnel is nothing but a graphic depiction of the number of open opportunities for your sales team. The results of lead generation, sales prospecting, outbound emails, sales calls, and meetings all combine together to make up the sales pipeline.
What Is a Sales Pipeline?
A sales pipeline is a visual portrayal of how far along prospective clients are in the sales process. It is an organized way of keeping track of multiple prospects as they gradually move through every stage in the sales process.
Sales pipelines are often envisioned as a horizontal bar or even as a funnel sometimes that is divided into the different stages of the sales process of a company. Prospects are transferred through different stages as they journey through the sales process.
The sales pipeline thus helps illustrate where a certain prospect, either warm or cold, is in their journey from lead to a sale. A sales pipeline also enables salespeople to see exactly where their deals are at all times. It’s a crucial tool for sales reps, who are often found hopping across numerous deals and sales prospects simultaneously and can’t afford to let any prospect slip through their hands.
According to Michelle Seger, Partner at SalesGlobe:
“Companies don’t know what their possibilities are. If you can actually look at your activities, how long they’ve been there and what are your conversion rates, it tells you where you are and what’s not working.”
Apart from sales reps, it also equips sales managers with more relevant data on the performance of their sales process because a pipeline also measures a salesperson’s activities. It offers executives greater perceptibility into different sales activities and helps them determine which activities are generating the highest returns.
Let’s say that your sales pipeline is worth $100,000 in contract value. If your rate of conversion from lead to sale is 10%, then you can hope to close new business worth around $10,000.
Stretching the scenario a bit further, let’s say you have a sales target of $20,000. If so, you will have to convert twice the amount of leads.
This is where sales pipeline analysis becomes operative. If you can detect much-needed improvements to be made within the pipeline that will aid you in moving a higher number of prospective buyers from one stage to another, then you will find greater success at your job.
And what’s the best incentive for enhancing the efficiency of the sales pipeline?
As per a study conducted by the Harvard Business Review, companies that had a defined formal sales process enjoyed 18% higher revenue than companies without a formal sales process.
Moreover, organizations that were proficient in specific pipeline practices were reported to have experienced a 28% growth in revenue.
For B2B companies specifically, a healthy sales pipeline lets you:
- enhance your sales process
- anticipate and predict future business outcomes
- evaluate distinct sales tactics for your business
- control and allot resources in order to service or close approaching sales
- examine your development for the current fiscal year
- see how far away you are from achieving your targets
Why Is a Sales Pipeline Is Important
A sales pipeline plays an essential role in both closing more deals and specifying the general health of your company.
To cut a long story short, sales pipelines are as important as they are made out to be because its efficient management brings in increased revenue. Additionally, companies that master the following pipeline practices can see as much as a 28% increase in revenue.
- Have a defined sales process
- Spend time evaluating and improving the process
- Train sales managers on pipeline techniques and strategies
Having a sales pipeline is crucial for other purposes too, and it helps in:
- More precise forecasting: Pipelines help you gain deeper insight into a sales personnel’s activity, how close they are to closing a sale, and collectively, how close or far is the whole team from meeting their target. With the help of the information gained by the sales team, it is easier to provide monthly, bi-monthly, and quarterly revenue forecasting. When you are conscious of how and when you will be closing a deal will also make you more knowledgeable of other company departments like operations, finance, and manufacturing.
- Focused allocation of resources: By knowing your location at each stage of the pipeline for any prospect or opportunity, you can take the required steps to allot resources to close a sale. Sales managers can ascertain which deals are important and if they will need more time to be converted to a sale or not.
- More efficient management of sales teams: At every stage, there are different actions to be completed so that that particular stage can be successfully finished and keep the deal moving through the pipeline. Keeping track of key metrics periodically means that sales managers can determine and simplify challenges for every salesperson before they can impede the sales process.
- Better deal velocity: Tracking data helps it make apparent when a deal is moving particularly slowly from one stage to another. For example, consider a scenario where the annual sales goal for every sales rep is $5,000,000. If half of your sales team has only reached $1,000,000 in sales in the span of six months of the sales year, it means that you should take a better look at the individual and collective performance of your sales reps, and take the necessary steps to make amendments.
- Improved deal size, volume, and revenue: In sales, you always want the number, size, and revenue of the opportunities coming your way to keep growing. A sales pipeline shows which situations to pursue more enthusiastically, when and where to spend lesser energy for specific opportunities, and what to eliminate from the process.
A well-managed and clearly-defined sales pipeline is all about continuous improvement of the process and the constant skill development of your salespeople. Everyone’ should have the aim to keep the pipeline moving as briskly as possible and from one stage to the other - and, of course, to close deals and make sales.
Breaking Down Your Pipeline
Any sales pipeline can be divided into three levels; top of the funnel (ToFu), middle of the funnel (MoFu), and bottom of the funnel (BoFu).
The top of the funnel leads, or ToFu, are the ones that haven’t shown too much enthusiasm yet. This stage of the sales process calls for prospecting for leads and qualifying them.
Middle of the funnel leads, or MoFu, are qualified leads, i.e., your prospects. This stage of the sales pipeline involves the scheduling of meetings and the nurturing of deals. It is a very important stage in your pipeline.
And lastly, at the bottom of the funnel, you have prospects that have converted to customers. This is your ground zero. People who have already bought or purchased from may require subsequent support or follow-up to continue purchasing from you. This stage of the sales process is the most standard. It calls for checking for referrals and up-sells routinely.
The important thing to note is that all these stages intermingle in a way. Making a change to one stage will unequivocally cause a ripple effect in the other stages as well. That means making a simple mistake even at the ToFu stage can immensely hurt your chances of making a sale at the bottom of the funnel. However, the good news is that enhancing one stage of the pipeline will also benefit the other stages. Generating a higher number of leads at the top of the funnel will also raise the chances of the number of deals you can close at the bottom.
Common Pipeline Problems
Let us look at some of the commonest pipeline blockages that affect proper sales pipeline management in order to remove them and improve deal flow.
- Dormant leads
Check and review each stage of the sales pipeline. You will, in all likelihood, come across certain leads that have remained motionless at the same stage, without any further development, for quite a while. The probability of converting inactive leads becomes less and less likely the longer they are made to remain so. Flag these prospects for prompt attention so that you can help them progress through, or out of, your pipeline and concentrate on other deals.
- Sales Velocity
You should also be knowledgeable of the length of time it takes, on average, for a prospect to convert to a customer.
This can be determined with the help of your sales velocity. Sales velocity is given by:
O x D(s) x R / l; where
O = number of opportunities
D(s) = average deal size
R = close rate
l = length of the sales cycle
When a particular lead is taking longer than normal, flag them for instant attention. This will help you avoid inactive stagnant leads from choking your pipeline.
- Deal size
Examining the deals that you have closed can help you predict the kind of deals that you are most likely to convert. Find common characteristics based on deal size, use case, challenge, and industry. When you see that an ideal deal type has come your way, focus on ranking similar opportunities in the pipeline.
If you pay heed to the deals that have the highest probability to close and pay them special attention, they will convert sooner, eventually providing you with more time to spend on deals that may take longer to close.
- Time-dependent leads
Don’t ever forget to flag the time-sensitive deals. Every sales rep, at some point or the other, comes across deals that have to be closed in a particular quarter, or that have to be followed-up in the next quarter. What happens is that they get lost in the pipeline. It’s important to keep track of the time-sensitive deals by flagging them and organizing them together.
- Optimize Your Sales Pipeline
How does one optimize their pipeline to make a successful sale?
In his whitepaper, 9 Tips to Leverage the Sales Funnel to Achieve Plans, Mark Sellers, CEO and founder of Breakthrough Sales Performance®LLC, a sales consulting firm, provides genuine pointers to get the most out of your sales funnel/pipeline. Begin by making sure that each person on the team understands and knows why the pipeline is so crucial for everything that salespersons do every day - from lead nurturing to key account strategies to forecasting and more.
What Is Sales Pipeline Management?
Sales pipeline management is the process of organizing and tracking goals and quotas – as well as knowing whether some deals need extra attention or not as compared to others.
Efficient sales pipeline management lets salespeople keep track of the deals that they have by knowing the stage that the deal is in, and if there are enough deals to meet the goals and the quota.
Pipeline management involves the design of the sales pipeline, how it is measured, and how it is used to enable the performance of sales reps. It allows you to review the blockages in your sales funnel and devise measures to remove them. After you have identified the blockages that are choking your funnel, sales pipeline management becomes a cakewalk. Now, we will look at 15 best pipeline management best practices to help you build a robust B2B sales pipeline.
1. Create a Standard Pipeline Management Process
What does a standard pipeline management process mean? To begin with, it means having specific milestones and clearly defined stages that are commonly understood by your sales team. Your sales reps should not have to be made to guess the stage a particular deal stands at or how do they manage the deals at every stage.
In addition to that, your process should be in resonance with how your prospects move through the buying stages. Your ideal target customers will have a lot of common characteristics. Their underlying reasons and needs for purchasing from you are largely similar – and it is this fact that you can use to your benefit to standardize your pipeline management process.
This is not to mention the fact that the best sales performers follow a standardized pipeline management process, which helps them scale and constantly get new business.
This is the reason why 33% of sales managers consider optimizing their sales process as a priority of the highest order.
You can begin by knowing all the stages in your pipeline. Size up what you are already doing – what works for you and where do the gaps lie? Gather with your sales team every now and then and quiz yourselves on:
- How to qualify leads?
- How to contact leads/prospects?
- What are the buying stages, and how does a prospective buyer move from one stage to the other?
- Should we be using CRM? How, and why?
The answers to these questions will help you define the different stages in your pipeline and build a process for moving buyers forward. Follow a shared vocabulary and train your sales reps in staying steadfast and true to your design.
Spend at least four hours per month on pipeline management. According to Salesforce, companies that spent at least four hours per month managing every sales rep’s pipeline saw a 14% greater revenue growth than those that spent fewer than four hours per month.
2. Sales Marketing Alignment
As per a study conducted by McKinsey, there will be six different interaction channels used throughout the buyer’s journey. Making the sale will now require sales and marketing teams to work in tandem to apprehend customer motivations.
This translates to having your marketing teams conduct customer research With the help of the insights and the expertise of those on the front lines, i.e., your sales reps.
The marketing teams can craft better content pieces, emails, and all-round communication that leads look forward to perusing.
It also means delivering better customer service on both the sales and marketing fronts.
3. Use the Right Sales Pipeline Stages
Having the right pipeline stages helps you guide your sales teams in the right direction to close deals more efficiently.
While the sales pipeline can vary from organization to organization, the seven basic stages of the B2B pipeline provided by Technology Advice present a great example of the right pipeline stages.
The stages are:
- Lead generation: This stage involves drawing and engaging prospects by event marketing, email marketing, content marketing, and many other campaigns.
- Lead nurturing: In this stage, you qualifying leads with the help of automated marketing messages and funnels that help you sieve the best leads for a follow-up from your sales teams.
- Sales accepted leads: You take the leads that were provided to you by marketing, and then you follow up with them.
- Sales qualified leads: You then qualify the leads further through repeated contact to specify the timeline, budget, and other miscellaneous needs before handing them over to an account manager.
- Closed deal: You convert an opportunity when a lead makes a purchase.
- Post-sale: You then continue to engage the customer after the sale is completed to increase loyalty that can then lead to repeat purchases.
4. Use a Clean Database of Leads
A lot of times, wrong or incorrect prospect information leads to botched sales endeavors. Sales reps can easily call a wrong number or make other easy mistakes. Such blunders have a negative effect on your sales pipeline’s health because reps won’t be able to contact as many leads as they could have with the right information.
Utilize the tools that are accessible in your CRM to preserve a clean database. You can use features like duplicate lead merging to keep your data clean. This will help reps avoid losing time to incorrect phone numbers when they have to call a lead.
5. Qualify Your Leads
Sales reps can also make use of the vast amount of data in their CRM to rear leads in the sales pipeline. Sales reps will know which content the prospect has consumed and which web pages have they visited.
With the help of that knowledge, they know which products and topics are prospects interested in so that they can base their lead conversations on those interests. This naturally results in higher lead conversions.
6. Train Your Sales Team on Pipeline Management
As per a Forbes study, 61% of reps said that their sales managers were not well-trained in managing their pipeline. The same study also showed that sales teams with properly oriented managers earned 23% more revenue in comparison to those without.
Make sure that every team member knows of your sales process. Don’t leave each rep up to themselves to do it their way. Your team should know the action items at every stage of the sales process and be confident about adjusting based on industry, company size, and market.
7. Automate & Minimize Administrative Tasks
Sales reporting forms the spine of the sales process. However, spending a lot of time on repetitive, administrative work eats into your productivity. Many a time, salespersons are made to document long reports that are of hardly any use to the management.
The Industrial Performance Group conducted a study on North American salespersons and asked them what consumed a salesperson’s time the most. They found that, on average, salespersons spent only 36% of their time selling, while the rest of the time was spent dealing with problems, administration, emails, making reports, etc.
You can use sales automation tools to deal with most such administrative tasks that directly affect productivity. You can easily compose sales emails and create immediately available email templates that are professional. With sales forecasting, you can determine future revenue and close rates through the sales pipeline activity. After you have freed up your sales teams from administrative tasks, managing leads in the pipeline becomes easier.
8. Monitor the Right Sales Pipeline Metrics
Your sales pipeline is constantly undergoing steady changes all the time. That’s why it’s important to monitor key sales metrics produced by it, which include the following:
- Number of opportunities in the pipeline
- Average Deal Size - The average size of the deals in the pipeline
- Win Rate - The average percentage of deals that you close
- Sales Cycle Length - The average lifespan of a deal before it is closed
Sales is made up of numbers, and how well you manage your pipeline depends upon how well you understand its metrics. It is due to this fact that sales managers always try staying on top of these statistics. The right sales metrics to track depending upon your business could be lead definition, the number of new leads generated in a month, opportunity definition, the conversion rate of lead to opportunity, the opportunity to closed deal conversions, loss rate, win rate, and more.
Having the right data at the right stage matters. Any error in the data can have an impact on the overall efficiency. That’s why it is important to dispose of manual data entry and instead have a CRM in place so that salespersons can input quality data into the system. A careful analysis of your accurate historical data can also help you predict your future pipeline.
Ensure to set aside time every week to periodically review these metrics, and they will give you an overview of the health of the sales pipeline along with the business.
By tracking the results over a certain length of time, you will also get a strong indication of how any improvements or changes that you make to your sales process will contribute towards overall growth.
9. Use the Right Sales Pipeline Technology / CRM
When you have a sales pipeline that is full of leads – and if the leads are all in various stages of the sales process – you then have to make sure that you are managing it efficiently.
If you have a small team and a tight budget and are only closing a few sales every month, you can then use a simple Excel spreadsheet to monitor the details in your pipeline. However, as your business will grow, you will have to consider using a CRM system to track your sales activities.
As per a report by Nucleus Research, companies that used a CRM saw an average return of $8.71 on their technology investment for each dollar spent. The same report also revealed that 65% of salespeople who adopted mobile CRM met their sales quotas while other salespeople who didn’t leverage mobile CRM met only 22% of their quotas.
The 2019 SalesTech landscape of various sales software available now includes 950 different products.
10. Update Your Sales Pipeline Data Regularly
It’s not new knowledge that sales pipelines are constantly changing.
Whenever new leads are added, the leads are made to move through from one stage to the other, and then deals are closed.
If you are not careful with it, your sales pipeline can start to feel a little discombobulated and chaotic – which can lower your productivity and lead to lost sales.
To prevent this from happening, you need to ensure that you are keeping every single lead’s details updated by feeding regular data and information for every stage of the sales process.
While this does mean that you have to spend more time on administrative tasks, it will help you remove dead leads and update outdated contact information.
11. Follow Up with Leads
In almost every industry today, purchasers have a greater number of options to choose to buy from than ever before.
This means that between your first meeting and the next, your prospects are going to be inundated with several requests from competitors with similar offerings.
So one way to keep them engaged and keep your offerings in the back of their mind is to follow up with them often.
Earlier, four calls were enough to close a sale.
However, it is recommended that salespersons make more than eight calls to convert an opportunity today.
But don’t just call to follow up always.
Set reminders to connect with leads and try sending them an email first. Move on to calling them later when emails don’t work and then use your best communication channel for other interactions going forward.
12. Clean Up Your Sales Pipeline
It’s important to maintain the hygiene of your pipeline by cleaning it out regularly.
This is why it is extremely important for management to be involved with leads early on in the sales reps’ pipeline.
This is when you help them chase hot leads and sift through the bad leads.
Bad leads are those leads that expressly tell you that they are not interested in your offerings after the first meeting and loads of other interactions to combat their objections.
Or you have met with these leads several times, and they always decline whenever you ask them to take the next steps.
Or even those leads that you have never been able to schedule a meeting with because they don’t answer your emails and calls.
If any of the above is the case, it is wise not to waste any more time behind them and instead focus your attention on the leads that are more likely to say yes.
The sooner you weed out bad leads that waste your time, the more time you can provide to leads that you can definitely convert.
13. Review Your Sales Pipeline Regularly
The end goal of managing a pipeline is to grow the number of qualified leads and deals won.
This means that you need to supervise the pipeline’s health as often as you can.
Sales managers usually spend their time and energies behind forecast meetings. While those are really important, they only take into consideration the deals that they are expected to close in a relatively short period.
By reviewing your sales pipeline regularly, you can analyze deals at the top and middle of the funnel and help your sales reps to:
- Examine the quality of new prospects entering the fray and then rank them accordingly.
- Aid salespeople in directing the result of any given opportunity in the starting stages better and help them avoid common mistakes.
- Offer a more expansive view of the whole pipeline for making the most amount of conversions possible.
Investigate the quality of every lead, ask questions about which decision-makers are involved, what are the next steps, and learn more about their own management processes and practices.
Always try to ensure that each of your sales reps has good sales pipeline hygiene so that they are not wasting any time, and they are always chasing the best leads.
14. Fix Bottlenecks in Your Pipeline
CRM is a wonderful tool, and it can help you keep track of where each lead is in the sales pipeline with the help of system tags. These system tags will update the status of every prospect in your system every time a lead progresses to the next stage in the pipeline.
You can also conduct checks to see the number of leads in each stage at a particular time of any day. If you see that leads are getting held up at a specific stage, you can ask yourself on which pain points to address for them in order to keep them moving from each stage to the other.
After you have recognized and singled out the bottlenecks in your pipeline and have considered different ways in which to clear them out, you can test and run sales experiments to try and enhance the efficiency of each part of the process.
15. Post-Sale Follow Through
A good post-sale follow-through strategy is a good way to improve revenues by selling more to your existing customers and also getting referrals to new prospects while you are at it.
In the honeymoon phase that immediately follows after making a sale, you have to ensure to maintain the level of excitement on the client side about the product. The company has just closed a deal when a prospect has become a customer. To ensure to keep them hooked to your offerings, use the following five ways to effectively follow up after a sale:
- Send a thank-you note: It doesn’t matter which method you adopt; it is important to thank your clients after successfully making a sale to make the entire buying experience satisfactory for them. You can also include messages like “We are here for anything you might need” in the thank you note. Also, it’s important to ensure that the thank you note contains the contact particulars of the person to be reached out to in the case of the client having an issue or a question.
- Remember to check in: Think up a schedule to follow up with the clients after a week or two of making the sale with the goal to find out if they need help with anything or not. However, remember not to overdo it. More importantly, don’t try to make a sale at this stage. Listen to the customer’s opinions and needs, and try to help them if they need any help.
- Keep communication lines open: Ask clients for their permission to correspond with them. Once you have their approval, send them helpful and relevant information that is advice-based for their various interests and needs. Try to focus on providing them with high-value content, such as articles, guides, webinars, etc.
- Set a base for the second sale: Continuing to talk to clients who have already purchased from you might seem like a waste of time, but it is a key factor integral to future sales. By regular contact, you can understand the needs of the clients, gain ideas about improvements, and set the basis to provide a complimentary product.
- Ask for referrals: When you have happy customers, they will refer you to other prospective buyers. More importantly, when a suggestion comes from someone who has actually used the product or service makes it extra credible and trustworthy.
Your sales pipeline is the lifeblood of your business. That is why you can never overestimate its importance.
This also means that not managing your pipeline properly can mean risking losing out on many new customers.
With almost 60% of sales managers of the opinion that their organization doesn’t do a good job at managing their sales pipeline, the chances are that you need to refine the way your sales pipeline works too.
The 15 best practices to build a robust sales pipeline mentioned above will help you keep organize your sales in a healthy manner, make your work more structured and organized, quicken up the speed of the sales cycles, and attain your sales quota sooner, all the while bringing higher revenue and growth to the business.