Your company’s sales pipeline plays a critical role in whether your business succeeds. That might sound dramatic, but it’s true. Your sales pipeline impacts everything you do in sales, including, of course, how many deals you close.
Whether or not you’ve explicitly defined it or not, if you’re selling something, you have a sales pipeline. And no matter how much attention you’ve given it, it impacts every member of your sales team. So, it pays to take the time to optimize your pipeline by following the best practices for managing it. Luckily, implementing these best practices is doable, especially if you work with the right partners.
The Building Blocks of the Sales Pipeline
So, what is a sales pipeline anyway? It’s the process by which your prospects become your customers. Just like a physical pipeline transports oil, water or some other product, the sales pipeline moves prospects through the steps necessary to close a sale. It includes everything from prospecting to lead generation to sales meetings. You might also hear the term sales funnel, which is closely related but more often used to describe a visual representation of the sales process.
Sales pipelines consist of several stages. At the beginning of the pipeline, you have all your prospects. The further along the pipeline you move, the candidates become more and more qualified, meaning they’re more likely to make a purchase. This also means there are fewer prospects the further along you go. People include different numbers of stages when describing their pipelines and give them different names, but here’s a typical structure:
- Awareness: In this stage, prospects first become aware of your company’s products or service, typically through marketing tactics. This step includes lead generation and nurturing.
- Interest: Next, a prospect, if qualified, may express interest in your product or service by requesting information, downloading a white paper or taking another action.
- Consideration: Next, the sales team will reach out to the prospect and further qualify them, often through a phone call. This step also usually includes a demo of the product.
- Decision: Then, the lead will decide whether to purchase the solution. If they’re interested, the salesperson will send them a contract.
- Purchase: The final stage is the closing of the sale. The salesperson will also typically follow up at several points after the sale to check in, get feedback or offer upgrades or new products.
Your sales pipeline is the backbone of your sales department. It describes the processes you use to close sales, which is naturally the ultimate goal of a sales department, so it’s vital that you optimize it. So, how do you create an efficient and productive sales pipeline?
What Is Sales Pipeline Management?
Sales pipeline management is the practice of optimizing your sales pipeline. It includes setting up processes to help you keep track of your prospects, qualify leads and assign them to staff members, as well as a few strategies for closing sales. It also includes defining procedures for evaluating your team’s performance and identifying areas for improvement at each stage of the pipeline so you can continuously improve your processes. Your pipeline management definition will likely vary from that of other companies since each business has its own unique needs.
If you manage your pipeline efficiently, your sales team will know what stage each prospect is in and who is responsible for which leads at all times. You’ll also have a clear picture of your quotas and what you need to do to meet them. Your department will run more efficiently, close more sales and, ultimately, boost your pipeline management revenue.
Guide to Sales Pipeline Management
How do you manage your sales pipeline for optimum results? Here are seven of the most crucial sales pipeline management tips to follow.
1. Formalize Your Process
An essential preliminary step to optimizing your pipeline is creating a formal sales process. Studies have shown that doing so can increase your revenue by around 18 percent. Write up a manual that outlines each stage of the pipeline and describes what to do at each step. Include scripts. Add case studies about specific opportunities and situations, as well as a guide on what to do if problems emerge.
To create this manual, look at the processes you have been using and identify what has worked well and what has not. Include the tactics that have had the best results. You may want to get together your top salespeople to contribute their ideas to the guide and look at any data you have that indicates what helps you close the most sales.
Once you’ve developed your guide, distribute it to every member of your team and ensure they know how to follow it. You might want to conduct a training session, too, especially if the manual includes substantial changes.
2. Have the Right Number of Steps
The pipeline described earlier involved five steps, but that might not be the ideal number for every business, product or situation. Tailor your pipeline to your company’s unique needs.
Having the right number of stages in your process is crucial to its success or lack thereof. If you have too many, it will be over-complicated and counterproductive, as you’ll end up spending a lot of time managing it. You could also lose promising prospects along the way as their interest wanes or competitors sweep them up.
If your pipeline is too short, on the other hand, your salespeople will have to rush, which could lead to errors and perceived pushiness that could turn leads off.
3. Use the Right Metrics
Collecting and analyzing data helps you to understand your sales process better and improve it accordingly, as long as that data is accurate and relevant.
Take a look at any historical data you have and set up procedures for collecting information on an ongoing basis. Include information on both an individual and organizational level. Useful metrics include:
- Leads created, organized by source
- Conversion rate
- Average sale size
- Average sales cycle length
- Total number of open opportunities
4. Use the Right Technology
How do you keep track of all of this data? There are various technological solutions available to sales teams that can help them organize this data, analyze it and otherwise improve their processes.
A customer relationship management system, or CRM, is one such platform. A CRM provides a central location to collect all customer data and track leads as they move through the sales pipeline. With an all-in-one CRM solution, you can manage contact information, communications, purchase history and other data, as well as other aspects of your operations such as quote management, marketing automation and call prioritization. You can also use specialized sales tools such as LeadMaster’s Sales-Xtreme Sales Acceleration platform.
Before deciding on a CRM or another sales tool, make sure it fits your business’ needs. Opt for a customizable solution and request a demo to ensure you find the right product for you.
5. Set Achievable Goals
Evaluating each team members’ performance — as well as the performance of the department as a whole — is a key part of a sales pipeline. You can use your CRM to keep track of performance data, which you can reference when setting goals for improving your team’s outcomes.
Focus on small, well-defined goals that over time will lead to substantial improvements. Set company-wide targets and encourage individuals to set goals of their own. Specify the stage of the pipeline that each goal applies to and use numbers to measure success.
6. Conduct Regular Reviews
Your work isn’t over once you define your pipeline and finish your sales process manual. The sales pipeline isn’t something you should just set and forget. To truly get the most out of it, conduct regular reviews to identify its strongest and weakest aspects. Sales pipeline management enables continuous improvement of your processes and revenue growth.
To complete these reviews, analyze the data you’ve collected to identify potential areas for improvement. Update messaging, processes and timelines that need work and revisit them during the next review to see if your new plan worked. These reviews can also help you determine where each salesperson performs best, allowing you to assign leads and parts of the process to the people who will be most effective at handling them.
Also, use these reviews as an opportunity to clear clutter from your pipeline, meaning leads that have a lower chance of converting. Doing so will enable salespeople to focus on the most qualified leads and, therefore, use their time more efficiently.
7. Keep Your People in the Loop
Your sales pipeline management won’t be nearly as valuable if people aren’t aware of how changes affect them. Keep an open line of communication about your sales processes, so everyone on your sales team is on the same page. This will make your overall operations more efficient and help every team member reach their full potential.
Your CRM is a perfect tool for doing this because it makes it easy for everyone to have access to the same information and understand the larger picture of your sales processes. Also, consider providing regular opportunities for people to offer their feedback on your company’s sales pipeline management practices, as well as any ideas for improvement they may have.
The Benefits of Good Sales Pipeline Management
Putting time and resources into managing your sales pipeline can have benefits for your sales team, your company as a whole and your customers. Here are four of the top benefits of proper sales pipeline management.
1. More Efficient Operations
According to a recent study, sales reps spend only 22 percent of their time actively selling — 23 percent goes to administration, while the rest of their time goes to planning, travel, order processing and other tasks that don’t directly result in increased revenue.
With a pipeline management system in place, your sales team will spend less time on administration duties and more time on making sales. You’ll already have processes in place so every member of your team can operate efficiently, both independently and as part of a team. Pipeline management ensures everyone knows what prospects they’re responsible for and prevents leads from getting repeat information or being bounced from rep to rep, which can be a source of frustration for both customers and salespeople.
Additionally, every sales team member will have a clear view of their quotas and the other goals they’re aiming for, enabling every team member to take control of their success and ultimately propel the whole sales department forward.
With a smart sales pipeline management plan in place, your sales department will have more opportunities to function like a well-oiled machine.
2. Faster Sales Cycle
In a survey by CSO Insights, 32 percent of sales managers identified a long sales cycle as a critical challenge. Along with the increased efficiency of a pipeline management system comes a faster sales cycle.
This faster process means you can earn revenue faster. It’s also convenient for customers because they don’t have to do as much waiting around. Instead, the system provides you with information on the average time it takes a prospect to move from one stage to the next. With this information, it’s much easier to notice when one is taking longer than usual and look into the situation to identify and fix any potential problems.
3. Improved Understanding of Performance
It’s hard to develop and grow your organization if you don’t know how well you’re performing. A quality sales pipeline management solution can help you to identify strengths and weaknesses, adapt to trends and stop problems more quickly. A CRM can help you organize data that gives you detailed insight into how individual salespeople and your team as a whole are performing.
This information gives you the power to improve your organization continuously, and your pipeline gives you the tools you need to make those upgrades. Plus, when you keep track of sales data, you’ll have concrete evidence of the progress you make and how you get there.
4. Increased Sales
Of course, in the end, sales pipeline management leads to reaching the overarching goal of increased sales and revenue. It helps you to more efficiently manage prospects and move them through the sales funnel faster, resulting in increased conversions. Because it improves the efficiency of your operations, it also results in more revenue earned per time spent.
Find the Right Pipeline Management Platforms From LeadMaster
Using the right tools and working with the right partners can go a long way when managing a sales pipeline. At LeadMaster, we offer both of those things through our superior technology and client-focused approach. Our solutions are completely customizable to suit your needs, and we’ll work with you until we find the system that’s right for you. When you partner with us, you’ll work with one representative throughout the entire sales process who will get to know you, your company and your needs so they can help you more efficiently.
We offer a comprehensive CRM solution, as well as solutions for custom sales tracking, lead management, inside sales, opportunity management and much more. We also have a variety of third-party integrations available. The LeadMaster platform is easy to use and readily scalable.
For more information, contact us today or request a free 30-day trial to try our system out for yourself. We’d love to hear from you, and we’re sure you’ll be impressed with the LeadMaster CRM platform and everything it can do for your business.