Intro: What is a sales pipeline?
Sales terms like “pipeline” can be tricky to understand if you're not in the industry. However, it's important for any business owner or manager because of how sales affect their bottom line - so let’s break down why this is so important.
Simply put, without a sales pipeline, you may lack valuable insights about how effective your team's efforts are. A visual representation of the stages in our process can help us see where we're having trouble and what activities might be contributing to reps closing deals faster than others.
In this article we’ll go over why it is important for every sales focused business to keep track of their sales pipelines as well as providing tips & tricks so everyone will know exactly how a sales pipeline works and what needs to go into one.
What is a sales pipeline and why is it important?
The sales pipeline is an organised way for companies to track potential buyers as they progress through different stages in the purchasing process. A horizontal bar usually visualises where leads and prospects are moved from one stage into another, which can be done when reps receive responses from cold emails or marked unqualified leads that could become customers down the line!
Sales pipelines are a way to hold your salespeople accountable and make it easier for them to achieve their goals. With a pipeline and good pipeline management, you can see where every penny goes so there’s no room for guesswork. The sales pipeline is a great way for sales managers to keep track of their activities and see which ones are bringing in more money.
Here's what you'll need to get started
Let’s look at how you can establish a strong sales pipeline by first understanding what information we need in order to create a successful pipeline. For example, it’s important that when building your sales team's list of customers they have specific requirements for what is needed in order not only to buy from them but also continue doing so after the sale has been made as well!
To get started you’ll need:
A list of your prospective buyers
You’ll need a list of prospects that fit your target audience and ideal customer profile (ICP) so you can make sure to speak with the right people. This includes their company, position within it, as well as what they do for work; any pain points or challenges they face currently which might affect how we could help them out with our product/service offerings if needed.
Your team’s sales process
Your sales process is a clear, structured formula that tells your team exactly what they need to do in order for you to win deals. A good one empowers them with repetitive success by following the steps and activities found throughout their workflow - so if you already have this then don't worry! As long as each stage gets filled out (which we will explore next), then mapping out your complete pipeline should be super simple.
Your revenue targets
Creating a successful lead pipeline starts with knowing your goals. To do this, you need to have all of the numbers that will help design an effective system for meeting them, including how many qualified leads turn into new customers? If we know which type or stage our prospects are in then it becomes easy enough to determine what number of deals should go out at each stage so as not only to meet objectives but exceed them!
A meeting with colleagues
In order to make the most out of your sales pipeline, you should involve not just yourself but also all members on it. This way everybody has an opportunity to offer their opinions and advice which will lead us into better collaboration between team members as well as more effective task management for projects ahead!
How to set up the stages of your pipeline
The first thing that you need to consider is the number of stages in your sales pipeline. No two businesses are exactly alike and neither are pipelines, so there isn’t one “correct" answer here either; but rather something tailored towards what works best for you and your business. Once your own sales pipeline is mapped out then you will be able to start tracking key sales pipeline metrics in order to ensure that you maintain a healthy sales pipeline.
There's no perfect certainty when it comes down to getting new clients. Sometimes people find themselves at different points along their journey depending on how ready they feel about making a purchase or investing money into your service or product.
Some organisations use five stages whereas others add as many 8 pipeline stages. We don't need to go into detailed sales pipeline management right now because we just want to focus on creating one sales pipeline rather than looking at multiple pipelines.
Here's the most common stages in a pipeline:
The first stage in any sales lead pipeline is always prospecting. This means finding prospective buyers who need what you're selling, regardless of how your company goes about it - whether through marketing campaigns or dedicated teams looking for new prospects through their own social channels like Linkedin; they must begin somewhere!
Qualifying your Leads | SALES QUALIFIED LEAD (SQL)
Qualifying is the process of finding prospects who are qualified for what you're selling. This can be done either earlier in the lead pipeline or after making contact with potential new customers, but it's always worth doing because this will save time later in the pipeline! In this step we will analyse fit via scoring systems and separate hot leads from cold ones so that only high-quality contacts remain on your list.
There's nothing wrong with cold leads, you just don't want to keep them in your pipeline. Instead save their contact information (or move them out of the category) and put a reminder to follow up so that if they change circumstances later downline or close themselves out entirely-- like many prospects will do- then there'll be no question about where these contacts fall anymore.
In most businesses it’s typical for around 80% of your revenue to come from 20% of your prospects. With a sales pipeline you can easily run pipeline reviews so that you can keep track of a specific pipeline stage and where the pipeline value really lies. With regular pipeline reviews you'll be able to spot prospects who have been clogging up your pipeline for longer than others. This is normal and as with any sales opportunity the key is to understand where they are in the sales cycle, and manage this effectively by putting them into another section such as ‘future’ pipeline or call backs.
Contacting your prospects
It might not be the most fashionable side of selling, but cold-calling is a tried and tested way of reaching your prospects. For newbies it’s often a daunting task, so it’s recommended to use a cold-call script and other techniques when you’re first starting out to help you overcome any nerves.
A cold-calling script usually starts off by finding out more about your client or customer so they feel comfortable enough before getting into anything else; this includes asking open-ended questions like "What kind of information would best suit your needs?" This gives them an opportunity to not only tell us what's on their mind but also gain some rapport which will make future conversations go much smoother too.
It's all about the relationships
One of the most important aspects for any business is to build trust with their customers. This starts from when they first encounter you and continues all the way through what could potentially turn into a long sales cycle. So it's crucial that your customer service quality remains high at every stage.
Once you’ve made the first initial contact and the leads are warming up it’s time to nurture the relationship. Nurturing doesn't just mean calling or emailing clients constantly - but consistency in communication can certainly help- but rather forwarding an article which applies directly towards solving their problem, liking their posts on social media networks such as LinkedIn (if applicable), being honest about objections/listening carefully before trying to sell.
Closing the deal
Let's talk about how to ask for a sale. It really depends on your reps, organisation and customers. Sometimes they say ‘yes’ outright - in which case you might not even need to make any concessions at all; but if that doesn't work out, then be sure there are specific exceptions ahead of time so nothing will come as a surprise later down the line.
Here's how to create a pipeline for your organisation
Review your prospective buyers
If you have a lot of prospects, it can be overwhelming to keep up with all their information. Fortunately there are tools that help make things easier.
Google Sheets is ideal and works well for managing smaller lists - less than 10 people at once but CRMs like Pipedrive are the key to success for any company that has multiple enquiries, deals or salespeople to manage at one time. They allow teams and managers easy access into each other’s pipelines, moving deals from one stage of development all the way through towards revenue goals while also keeping an eye on overall progress.
Set up your sales pipeline stages
There are a number of common activities that all reps do. These can be easily identified and turned into specific activities in your pipeline. It’s important that there is a clear division of labour between the team as to who is doing what, on which deals and at what times. Otherwise, things can get complicated. And because deals in a sales pipeline can often be open for months because of a lengthy buying cycle, it’s a good idea to ask yourself and the team the following questions to break things down into manageable chunks.
- So break down each deal into smaller pieces to manage them better: Ask yourself what does this daily task entail?
- Who will have responsibility over which stage?
- And how often should we check status updates versus setting expectations ?
Always be refining, your stages
Stages are the fundamental building blocks of your pipeline. They help predict future revenue with accuracy, and can be used to add new stages or change existing ones in order for your business to grow more quickly than before!
It’s important that we not only plan our sales stage strategy but also experiment until we find what works best - this will save time as well as money by eliminating unneeded parts from each step on the way to closing a deal.
Cleanliness, with data, is next to godliness
You’ve built your pipeline and you put deals from existing contacts into it. But how do you make sure that this stays updated? It can be tricky, especially if a team hasn't built the habit of entering new information into their pipelines before they move them through each stage. The key here though is to develop just one more thing: A routine where all members participate by completing activities as needed at every stage so you'll soon develop a habit of moving them forward.
Your pipeline is a crucial component of your company’s success. Without it, you cannot hope to track deals and activities with any kind accuracy or meet monthly sales goals to hit your targets.
Properly setting up stages will help ensure that revenue can be accurately attributed back from each individual step and you will be able to see the revenue driven by an individual reps activity.
By understanding some of the fundamentals of how a sales pipeline works you’ll be able to hone those pipelines to not only hit your numbers but exceed them.
Interested in implementing a sales pipeline in your business?
Get in touch and book a free consultation to learn more about how Evolve can help you start your Pipedrive journey.