The more opportunities in your pipeline, the more likely you are to hit your revenue goals. But when it comes to your sales pipeline, bigger isn’t always better. What you actually need is a strong pipeline.
But what does that really mean? And how do you manage it?
What is a Sales Pipeline?
A sales pipeline is a visual representation of the typical journey all of your prospects follow to become buyers, based on the actions of the seller.
As the seller completes those specific actions, the prospect moves through the different stages of your pipeline to become a buyer. Tracking these activities and stages allows you to determine which processes drive the best results while helping you to forecast revenue and sales opportunities.
Building a strong sales pipeline means having the most reliable data and using it to catch small problems before they become larger issues.
To do this effectively, the seller must work to keep an organized system – tracking every prospect, keeping up-to-date on every lead, nurturing them properly, updating account notes, adding closing deals, and any other detailed information for each stage of your process.
You might hear different sales professionals refer to their “pipeline” as the quantity or dollar value behind deals, rather than the steps or stages, but what they are actually talking about is their actual pipeline value, so don’t let that confuse you.
Choosing a CRM Software for Your Pipeline
This is where having a visual representation of your sales data really comes in handy. After all, you have deals closing, prospects booking meetings, and new leads being brought in. You need to stay on track and manage your pipeline without losing any sales opportunities to inefficiencies.
The goal with any sales pipeline is to standardize the process as much as possible so it can be repeated and continuously improved. Using CRM software is one of the best ways to get a birds-eye view of your system and processes.
This allows you to:
- easily plan & segment your buyer personas
- manage your sales cycle for each product or service
- see which sales activities drive the best results
- improve processes or strategies that need improvement
- manage the opportunities each of your sales reps are working on
- analyze what prospects they are working with
- forecast & track the value from each deal
- automate your tasks for better time management
While there are some fancy Pipeline Customer Relationship Management (CRM) tools, your sales pipeline could also be in the form of an Excel spreadsheet or whiteboard if you are just getting started.
Choosing the right CRM software for your business can make a huge difference in keeping your pipeline organized and efficient. The best pipeline software offers a variety of analytics tools, mobile apps, and workflow automation.
When comparing the options for your visual sales pipeline software, you should consider answering these questions:
- How big is your budget?
- How many users do you need?
- Does every department need it?
- How many pipelines will you need?
- What features are you looking for?
This will help you make better, more informed decisions about what software will work the best for you and your company’s needs when building your sales pipeline. Take a look at some of these top-rated sales pipeline dashboards.
There are tons of different options, so be sure to weigh out the pros and cons accordingly!
Assuming you have your ideal target client profiles (ICP) built and your target market evaluated, it is time to move forward and build a strong foundation for your sales pipeline. (If you are in need of some top prospecting tips, including how to properly target and evaluate your ICP, we have you covered!)
Managing a Strong Sales Pipeline
Rome wasn’t built in a day and your sales pipeline probably shouldn’t be built in a day either. It’s one of your most important tools for tracking the overall health of your company, so the stronger your foundation is, the better you will be able to track, measure, and analyze.
To get started:
- Continuously research and segment your target audience
Any successful sales team knows that learning never stops. Continuously researching and evaluating your ideal client profiles will not only improve your targeting and messaging, but it will also help you build and segment out your contact list, which is necessary for a strong pipeline foundation.
Take what you’ve learned about your ICP and build an internal contact list of those targets based on your company’s buyer persona. You can try segmenting by demographics, behaviors, where they live, their interests, or beliefs. These segments will help organize your leads into meaningful categories that better cater to their needs, ultimately giving your business the best chance of increasing revenue.
- Review each respective customer journey
Already have a defined sales process? You are one step ahead.
A sales process is a step-by-step formula that tells your team exactly what activities they need to perform to close a deal. Since your pipeline is built from the stages in your sales process, you must detail the typical customer journey of each buyer persona, from start to finish, to the best of your ability.
If you sell multiple products that have different buyer personas, they will likely move through your sales process at different stages and times. If you find this is true, they need their respective pipelines. This helps your team follow a framework for repeating, standardizing, and improving all of your processes and activities. (We’ll go into more detail about the specific stages of your pipeline later.)
- Calculate the number of opportunities needed to hit your sales targets
How many deals do you need to add to your pipeline to make your objectives?
What is the average size of your deals?
What is your close ratio? Your sales velocity?
Setting S.M.A.R.T goals and benchmarks will help your sales team stay on track and better organize your sales pipeline. It can also guide them in predicting which opportunities are most likely to close.
Maybe your average prospect spends two weeks in the demo stage, but prospects that eventually buy spend three weeks. If you know how many of your leads convert into customers or the number of deals you need in each of the early stages to do so, you will have a greater ability to forecast the percentage of opportunities in your pipeline to reach your set goals. Once you’ve assigned these percentages to each stage, you can develop monthly and/or quarterly revenue estimates.
- Keep a clean up-to-date and organized database
Your pipeline is always changing. New leads, prospects moving through stages, deals closing. It can get disorganized and chaotic, which doesn’t help your sales process. If you want to focus on your best opportunities, you will need to provide your pipeline with the most accurate data points possible.
It isn’t just about your note-taking skills though. How you score your leads and move details through your CRM has a huge impact on your sales pipeline. Are you properly nurturing your high-ticket clients? Are you spending too much time on a certain activity that doesn’t bring in more revenue?
By scoring your leads based on project size, urgency, or availability of resources, you can focus more resources, effort, and personalization on leads that prove most beneficial to your business. This can also help you keep a clean database by pausing or removing those who aren’t naturally flowing through your pipeline.
- Set scheduled meetings with your sales team to review pipeline progress and reports
Most sales teams today collect A LOT of data that can potentially change their approach to pipeline management – they just don’t know how to use it properly. According to a study by Vantage Point, 72% of sales managers said they hold pipeline reviews with their team several times per month. However, 63% of those respondents also said that their companies did not have an accurate means to efficiently manage their pipeline resources.
Your pipeline isn’t just yours, which is why it’s so important to detail the number of users and the departments involved in your sales processes. Since everyone on your sales team will be using the same pipeline, you’ll also want to include your sales team in the decision-making process as you build. Also, it helps to have more than one set of eyes on a sales pipeline; a second opinion often helps you spot any flaws or discrepancies in your plan before implementation.
The Stages of Your Sales Pipeline
Unlike a sales funnel, which measures the conversion rates moving through a process, a sales pipeline corresponds to all the different stages in your sales process.
The stages differ based on your company and industry, but some of the most common are: qualifying the prospect, booking a sales meeting or demo, sending a proposal, and closing final negotiations. Some organizations prefer a five-step pipeline, but we’ve seen as many as eight stages and almost any number in between.
This is because the number and type of stages in your pipeline should change depending on: your prospects, how you contact them, your offering, and the marketing resources you have available. You should be creating a pipeline for each respective product or customer segment. You can also think about creating a new pipeline per department or your sales team from account management.
To get started, ask yourself what key steps you can identify. For example, What are the steps a prospect needs to take before they move to the next stage? How do I make that happen? If you are super detailed, you may come up with more than the 7 we have listed below, but like we previously mentioned in the beginning, bigger isn’t better when it comes to your pipeline.
Setting your benchmarks and goals for success is an incredibly important step in building your sales pipeline. You must know your starting point so you know how to best improve. Ask yourself what benchmarks or activities are needed on your end to move a prospect or lead through your sales process to becoming a buyer.
Typical Stages of a Sales Pipeline
Prospecting is one of the first (and most crucial) steps in your sales process. To build a great pipeline, sales teams must invest in research. Understanding your target demographics and tailoring content toward them can go a long way in increasing sales and shortening sales cycles.
“You may have a ton of prospects entering your pipeline, but the vast majority should drop off after the qualification stage. After prospects have passed the critical point, most should become customers,” says Hubspot Sales Educator Jeff Hoffman. “The most successful reps often have 1.25x or 1.5x the ratio of opportunities to deals in their sales pipelines.” If you neglect to prospect, you won’t be able to build a strong sales pipeline.
2. Lead Qualification
Review your sales pipeline regularly to identify leads and opportunities that have gone cold or stuck in this stage of the pipeline for too long. Letting these opportunities sit can skew your numbers and hurt your predictions. Focus on qualifying these leads by figuring out if they are right for your business.
Try offering an e-book, white paper, webinar, case study, or another type of (free) resource to determine if the prospect is interested in learning more about your solution. Remember, you can always ask for an appointment, don’t be afraid of facing rejection.
3. Sales Appointment or Demo
At this stage, your sales pipeline should be better organized with unqualified prospects filtered to pause. This is your time to really dive in with your offering before offering a proposal. You should be properly detailing each meeting so that you can offer the most personalized messaging and solution.
Make sure everyone involved in the process understands the goal of this meeting. Prepare an agenda ahead of time to help keep everything on track. Your demo should only happen after the need for your product is clear. Bring all your collective insights and build a case that demonstrates how your product will help your prospect achieve their goals.
This stage is when you make an official sales offer. You should have talked about pricing during your demo, so reconfirm that your value aligns with pricing and follow up to make sure any of their questions are answered.
If a customer ghosts you right before or after a proposal, make an attempt (or two) to contact them. Let them know that they can reach out whenever they are ready to move forward. Study the activities that took place before this stage and make note of anywhere you can improve. Make sure you are marking these ghosts are cold leads.
The prospect will likely have objections or additional inquiries that require renegotiating the initial proposal. Experts suggest you discuss expanding or shrinking the scope of work, adjust your pricing, and manage their expectations to come to a final agreement.
You’ve established a good relationship with your lead and they are now ready to close the deal – but the process isn’t over yet. Send your contracts, update any account information and make sure all parties have the appropriate paperwork. It’s time to start onboarding.
Is your client happy and satisfied with their purchase? Ensure they have a positive experience by scheduling recurring check-ins. Can you upsell? Cross-sell opportunities? Make note! After some time, send them through your referral process.
Side note: You should strive to keep your sales cycle short and work to consistently bring in new leads while moving prospects through each of the different stages in a determined time frame. If they aren’t flowing through each stage, they should be filtered from your pipeline.
No matter how many steps are in your pipeline, the key is to properly manage each prospect efficiently, so you are never missing out on opportunities to make a sale.