A sales pipeline is a crucial tool for businesses looking to grow their sales management operation, increase conversion rates and ultimately boost sales of their product and service.
In today's increasingly digital ecosystem, teams who focus on building a robust sales pipeline are more effectively able to evaluate the health, profitability, and growth of their business.
Through rigorous research, we've uncovered the most effective ways to build and strengthen your sales pipeline, along with the best strategies for pipeline management long term.
This article covers everything businesses need to know about actualizing their sales pipeline and how businesses can leverage this management tool for maximum ROI.
Quite simply, a sales pipeline is a graphic visualization of how many potential customers (prospects) are at each stage of the company's sales process. An advanced sales pipeline has a range of benefits, including showing the number of deals in a sales process, which deals a sales rep should focus on, as well as predicting future revenue.
A sales pipeline is also a powerful tool for sales managers to collate and analyze data to measure team performance, identify areas for improvement and maximize revenue.
Effective pipeline management has been shown to increase revenue growth by up to 15%.particularly within the B2B sales framework.
The benefits of building and optimizing a sales pipeline include:
Streamlining the sales process
Managing and allocating resources
Understanding the ideal customer
Identifying what is working and what needs improvement at each stage of the pipeline
Forecasting revenue on a weekly, monthly, and yearly basis
Ultimately, a sales pipeline articulates how prospects come into contact with a brand and the steps a sales team then takes to convert these prospects to paying customers.
Effective sales pipeline management involves tailoring the sales pipeline model to suit the individual business and its products and services. Further to this, building a sales pipeline is not a static endeavor, but should involve regular pipeline reviews. This constant reevaluation and streamlining will ensure businesses maximize sales deals and improve the overall health and future direction of their company.
As we've already mentioned, every sales team should customize its sales pipeline management to suit its vertical, sales team, and product or service. Nonetheless, it is helpful to have a template from which to start.
In general, the sales pipeline stages are as follows.
The first stage in the business pipeline involves actively sourcing prospective customers, or generating leads.
Lead generation is made of two stages, prospecting, where leads are discovered, and contact made, where the potential customer has been contacted via email, a phone call, or social media.
At this stage of the sales pipeline, building brand awareness plays a large role. This is usually a customer's first interaction with a brand, so it is essential to make a good impression.
During the lead generation phase of the pipeline businesses can use the following to generate prospects:
Social media campaigns and social media ads
Marketing campaigns that offer downloadable content (e-books, templates)
SEO efforts (blogging, link building, website optimization)
Print ads (magazines, newspapers, billboards)
Studies into the effectiveness of these different advertising methods show that while digital ads are less recalled than print ads, they are more effective than print ads at converting engaged readers into action-takers (64% vs 55% for print).
This is because, unlike print ads, digital ads offer the ability to capture a prospect's contact information through a lead capture form. This form gives the sales team permission to continue marketing to the prospect- something not available through the print medium.
Of all the different sales pipeline stages, this is perhaps the most important. Time should be spent defining the ideal customer persona and using this to target the most likely prospects.
In the lead qualification stage of the sales pipeline, marketing teams work to determine which of the gathered leads are actually likely to buy the product or service being offered. This is an essential part of any business's sales pipeline management, as it ensures you are your team is not wasting time and energy on leads that are unlikely to convert.
Determining whether a prospect is a qualified lead involves asking the following questions:
Does the prospect have the budget for your product or service?
Is the prospect able to make the purchase themselves, or do they need to convince someone else (this is particularly relevant for products and services aimed at children and teens)?
Are they ready to make the purchase immediately?
Do they really need the product?
Qualifying leads can be conducted via customer surveys, or by sending emails and content and tracking the metrics of what prospects respond to.
The next stage in the pipeline is the consultation phase. This phase of the pipeline involves sales reps making direct contact with the prospect, either in person, on the phone, or via a zoom call.
This is a fantastic stage of the sales cycle to start using Airgram to record customer pain points and what is likely to continue to move your prospects through the sales funnel to maximize your conversion rate. You can also download our free sales meeting templates to ensure your sales team is aligned and stays on brand.
In a B2C business interaction, the customer may still be looking at all of their options in order to make an informed decision. For B2B businesses, the consultation will likely be a discussion around the services offered and how they can best serve the prospect in reaching their specific goals.
At this phase of the pipeline, it is unlikely your sales team will be closing deals, however, it is not unheard of.
If the consultation does not result in a sale, follow-up by sales reps is essential. Your sales team should be available to the customer via a range of mediums, including email, phone calls, and social channels. Timely responses and targeted follow-ups are vital to ensure you close as many deals as possible.
Of all the sales pipeline stages, the proposal stage is 'crunch time' for sales teams. This is when a deal will be made, or a customer will decide not to make a purchase and will drop out of the sales funnel.
A good example of the proposal in B2C interactions is when a customer abandons their cart. By reminding them to come back and shop, your business is offering them a proposal. Similarly, you may continue to email them products they have previously shown interest in.
In a B2B setting the proposal phase is slightly different. This is usually when your business will present the prospect with a formal agreement outlining products and services, pricing, and terms and conditions. If the agreement is signed, a sale is made and the prospect becomes a client.
This is where a sales team's hard work comes to fruition. Building strong client relationships at all the different stages of the sales pipeline helps ensure you make your sales and hit your revenue goals.
So your marketing team has done its job and the sales team has turned qualified leads into new customers. That must mean the sales pipeline is closed, right?
Now is the time in the sales cycle when you must follow through on the promises you have made to your clients and customers.
Customer service is paramount here. Every customer should be individually monitored and responded to, to ensure they are satisfied and any issues are resolved promptly.
Further to this, at this stage of the sales pipeline, the marketing team has the opportunity to upsell any other products and services that may be of value to the customer.
Using Airgram to record any follow-up sales calls and presentations will ensure you are tracking the stages of your sales and optimizing the number of deals you can close with each client.
There is often confusion around the sales pipeline and the sales funnel, with people misinterpreting them as the same thing. However, this is not the case, with the sales pipeline and sales funnel representing two separate and distinct elements in sales activities.
Essentially, a sales pipeline is about deals and covers every stage in the sales process that a sales rep takes in order to close a deal.
On the flip side, a sales funnel is about leads and covers the stages in the buying process that a prospect goes through before becoming a customer.
Another way to look at it is the sales pipeline reflects the sales process from the seller's perspective, while the sales funnel reflects the sales process from the customer's perspective.
Building a sales pipeline is just the start when it comes to sales pipeline management. Here are our top tips on sales pipeline management for optimum return on your sales and marketing efforts.
1. Understand Your Ideal Customer
Before you even get started setting up a pipeline, you should have an understanding of your ideal prospect. By understanding your target market and what drives them, you will be able to create a pipeline that appeals to an audience that truly values what you are offering.
2. Follow Up
Only fifteen years ago it took an average of just over 3 phone calls to close a deal with a lead. Now it takes around 8. With an ever-increasing amount of options available to the consumer, your sales revenue depends on a sales team that is not only able to source new leads but continue to follow up on the leads they already have.
To ensure your team follows through on following up, you can set reminders or use a CRM to automate messages to be sent out at specific times.
3. Build and Maintain Customer Relationships
By building and maintaining quality relationships with prospects across all stages of the pipeline, you will ensure you gain high-value customers. Even if they drop out of the pipeline at one stage or another, they may return at a later time.
4. Track Your Sales Pipeline Metrics
Unfortunately, it is not just enough to build a sales pipeline, and hope that it will do its job without you. Just like your customers, sales pipelines are living, breathing entities that require monitoring and nurturing.
Therefore, sales teams must set aside time to meet and track the key sales metrics and sales activities.
Common sales pipeline metrics to track include:
The number of deals in your pipeline
The average deal size
Your team's close ratio
Your sales velocity
5. Conduct Regular Pipeline Reviews
Another crucial way to manage your sales pipeline is to ensure the pipeline itself is serving your business goals.
Every stage of the sales pipeline should be constantly reviewed and fine-tuned. From how you draw in leads to the way offers are made, every one of your sales activities should be monitored to ensure a maximum win rate.
By examining where there are blockages in your pipeline you can begin to refine each stage in the sales cycle and optimize your conversion rate.
6. Create More Content
There is an old saying, content is king. This applies at all stages of the pipeline. The more, useful, informative content you can provide to prospects the better.
Look at all stages of the pipeline and design a content plan that complements each stage.
7. Update Your Sales Pipelines
Pipelines are not static but rather are constantly changing. If you don't stay on top of them they can become disorganized and lead to lost sales.
With customers moving in, through, and out of the pipeline, you must keep details up to date for every lead at every stage of the sales cycle. Conduct regular sales meetings with your team to share this data and ensure everybody is on the same page.
8. Shorten Your Sales Cycle
The data is clear here: the longer the sales cycle, the longer it takes to close a deal. The reason for this is simple. The longer the sales process, the more chances your prospect has to choose an alternative product or service. While the length of the sales cycle will vary across verticals, B2B sales have an average sales cycle length of 102 days. If your sales process takes considerably longer than this, you may be losing out on valuable deals.
9. Standardize Your Sales Process
While it may be tempting to try different sales processes with different prospects, this essentially just muddies the pipeline waters.
If you have taken the time to understand what drives your ideal customer, they will have a lot in common, making a standardized sales process the most logical option.
Further to this, the best-performing sales teams have been shown to use standardized sales processes to effectively scale their teams and consistently close deals.
10. Utilize the Best Software to Manage Sales
Tracking your sales is essential.
For small businesses who are just starting out, a simple Excel or Google Sheets spreadsheet may be enough to track all the stages of your pipeline.
However, once you start to scale, you'll need a CRM that allows you to map your pipeline. You can then use this to analyze and report on all aspects of the sales cycle.
‘Keep your sales pipeline full by prospecting continuously. Always have more people to see than you have time to see them’ Brian Tracy.
A sales pipeline is an essential tool in today’s increasingly commercial world.
By creating a robust business pipeline that is constantly reviewed for improvement, businesses can optimize employee productivity and ensure maximum return on their sales efforts.
Ranee has worked in the SaaS industry for nearly ten years. She loves working with, learning from, and helping develop effective leaders and is willing to share her thoughts through words. Outside of work, you can find her dancing, hiking in the mountains, or reading in a cafe.