Aside from developing effective sales techniques, a sales pipeline is one of the most critical systems your business will ever develop or maintain. It doesn’t matter how good of a salesperson you are – most of your prospects aren’t ready to buy after initial contact, which means you’ll be keeping track of dozens, hundreds and potentially thousands of ongoing conversations with prospects at different stages of the sales process at any one time.
This makes it necessary for almost all businesses to develop and manage in one form or another an effective sales funnel that efficiently converts prospects to customers as they progress through the stages of a sale. A sales pipeline is a system that allows you to methodically organise your sales and outreach efforts, so you can maximise your sales by effectively organising and tracking individual leads (prospects).
Creating a Standard Pipeline
One of the most important parts and arguably the basis of any sales pipeline is defining stages of the sales process you want to track, this allows you to see at any time where a prospect is and what action should be taken. It also gives you access to data to see where you could improve your sales process, solve bottlenecks and try different approaches to maximise sales.
A conventional pipeline looks something like this (bear in mind these vary company to company, product to product and can become substantially more complex, this is just an outline).
- 1. Initial contact – The initial stage of any pipe is when a prospective customer is contacted. This is typical via email or telephone, this stage is critical to keep track of as on many occasions you will need to follow up to receive a response and either remove the prospect from the pipeline or progress the prospect further down the pipeline.
- 2. Qualification – Qualifying a prospect is a step beyond the initial research you carry out to identify potential customers, it is about discovering if the customer has a need for your product, do they have the budget to buy your product, is it the right time for them to purchase your product and many other questions.
- 3. Meeting – Effectively this stage is about making sure a prospect is worth pursuing now, at a later date or never. Lead qualification is typically done in the form of a meeting either in person or over the phone.
- 4. Proposal – Once you have qualified a customer and understand their needs, the proposal as a stage is about selling a customer your product/service tailored to their individual needs as a business or professional. This is typically done in the form of a quick email, pdf proposal (maybe something even a bit fancier) or a powerpoint presentation highlighting the key details of the product/service and how it would work for the customer
- 5. Negotiation – Negotiation is another critical stage to keep track of as it is when a prospective customer has responded mostly positively to a proposal but is looking to negotiate on price, features or further details. Before you can arrive at a sale its important for this stage to be concluded.
- 6. Close – At this stage it’s all about turning the prospect into a customer and closing the sale as quickly and efficiently as possible, this stage will often require multiple follow-ups.
Optimising & Managing the Pipe
There is no one size fits all to managing a successful pipeline but there are several key tenants you should follow in maximising the conversion of prospects to customers.
Sales measurement & tracking
Without understanding the vitals of your leads and clients, and what data you should measure, there’s no way to manage your pipeline efficiently. A few key areas you should track include, stage of prospect, timeline / communication points and deal size, there are much more but always start with the essentials. With the above tracked you can start to understand what’s in your pipeline, what’s converting, what is not and analyse to identify issues, opportunities and what should be prioritised.
Clear pipeline stages
Unless you have a very complicated (justified) sales process, you should never need more than 12 key stages in your pipeline. We often find organisations either clutter their pipeline with too many stages or have too few. Both are bad as one side creates needless complexity that can result in an overwhelming pipe and on the other minimal stages leads to an unclear understanding of where a prospect is at and a loss of efficiency/conversion in the pipe.
Salesperson behaviour
A sales pipeline is much more than a piece of software in the cloud or an excel sheet, and it’s used to track the entire sales funnel and is arguably one of the most important processes of your business, sales. One thing people often overlook is the human element involved in this (or sales pipeline management), you can have the best CRM (client relationship manager) on the planet, but if your team isn’t clear on their responsibilities and haven’t incorporated behaviour patterns around using the system, you’re losing money.
Lead ownership
Active updating of your pipeline is one thing, but you also need to have clear ownership of a lead once it enters the system. We’ve found that in many occasions leads are passed around from sales person to sales person, and this often leads to the loss of the lead. Once a lead comes in it needs to have a clear owner who is responsible for taking it through the sales process.
Sales & revenue forecasting
Once you’re sorted on the above, and you have a working process and tool, you’ll be able to gather and analyse data, as well as to look at structural problems in your pipeline and create/track optimisations that can lead to efficiency and conversion gains.
Summary
It’s important to remember a sales pipeline is not static, creating and managing a successful pipeline is an ongoing process that will evolve with your business, so keep building and keep iterating!
Finally, there is a slew of sales and marketing automation software on the market, many of which provide you with all the tools necessary to create your own sales pipeline, although the right CRM software largely depends on the scale of your business.
