When sales leaders and representatives have optimal control and visibility within their sales pipeline, it’s possible for them to experience the highest revenue. According to statistics from HubSpot, only 22% of businesses have a conversion rate with which they’re satisfied. Why is this statistic critical, and what does it have to do with sales pipeline management? Of these companies experiencing low conversions, they’re also admitting to devoting $1 toward conversion for every $92 they spend in the acquisition. Companies implementing sales pipeline management, especially during the early stages, must move from beginning to end, so relationships with customers and sales grow simultaneously.
Definition of a Sales Pipeline
When your team is currently working on deals, tracking their progress, and expect to close on them within an appropriate amount of time, a sales pipeline is a way of managing the process. We use the term “pipeline” as a means of describing the peripheral deals travel from stage to stage, which typically has a visual representation in your CRM. The pre-definition of this path is a prerequisite not only for building but also for tracking a sales pipeline.
How Does a Sales Pipeline Differ from a Forecast?
It isn’t uncommon for sales pipelines and forecasts to be confused with each other. Even though a pipeline will include all opportunities salespeople are handline, despite how mature or new it is, sales forecasts provide a time estimate for those opportunities regarding when they will close.
Additionally, forecasts and pipelines each have a different purpose. Sales representative utilize a pipeline for tracking the location of prospects within the sales process, as well as all appropriate actions they should be taking. Whereby a sales forecast provides information to sales managers and their teams regarding how they should be preparing for goals as they continue trending closer to them.
The Sales Pipeline’s Stages
Before building an maintaining a successful sales pipeline, it’s imperative for the sales process to have a definition. Sales processes that are the most successful match your buyer’s journey from the time they begin researching, then move on to evaluating, and later on to decision making.
Even though every company’s sales process is unique, B2B buying and selling fundamentals are similar across multiple product types and industries. Here is an outline featuring a sales process many companies use when beginning.
Stage One: Building Prospects
During the first stage of the sales process is identifying people and companies with which you believe you believe it’s worth making sales. You’ll typically identify these contacts by utilizing your ICP (Ideal Customer Profile). Building your ICP is possible by examining the qualities of the companies you’ve sold to successfully previously. After creating this list, it’s your sales team’s responsibility to attempt to attract them into the sales process. The task will either be challenging or simple depending on your target buyer’s awareness of your company, as well as your solutions.
Stage Two: Qualifying Leads
If you’re chasing the wrong leads, you’re wasting time and energy. Therefore, avoid doing this at all costs. After your sales team introduces new prospects to your company and they’re in the pipeline, the next step is determining if they’re prospective buyers. During this stage, you’re qualifying the lead.
Some of the most common qualifying questions include:
- How large is their company?
- What is their industry?
- Where is their location?
- Which tools have they utilized previously?
- What solutions are they seeking?
- How urgently are they seeking a solution?
When the company answers these questions, your sales team will be able to determine if the company matches how you define an ideal customer. If they don’t, it’s time for your team to move on.
Stage Three: Making Considerations
Your prospect is aware of your solutions, and your sales team has qualified them when they reach this stage. At this point, they may begin evaluating their options by comparing your products to similar ones and determining if they should do nothing or if it’s a viable option.
Your sales team will have engagement with the prospect during this stage through demonstrations of the product, providing technical information and case studies, and building a case for business. They’ll also be responsible for the navigation of internal politics and being the individual who engages with the organization’s ultimate decision maker.
Completing this stage doesn’t necessarily mean the deal is final. Sometimes, it means the customer journey is still going to be a battle.
Stage Four: Decision Making
The buyer is confident you have the optimal solution for the problem they’re attempting to solve during this stage. It isn’t uncommon for many to believe that the next step is negotiating costs and obtain contract approval. However, before that can occur, the sales team must first identify potential barrios that may block the deal.
- Is it necessary for the buyer to receive budget approval from another party?
- Could there be projects that are competing that could experience a last-minute priority?
- Does IT or compliance need to sign-off?
- Did the prospect completely rule out all competing products?
Those are some of the sample questions your sales team must address during the deal’s final stages. These questions, among others, can be the reason for the deal not closing during late stages.
Stage Five: Closing the Deal
During the last stage of sales pipeline management, your sales team is closing deals with business that has been won. The only time deals enter this stage is when a contract or the deal has a signature. These deals also no longer need contact from the sales team because prospects are now paying customers.
The Importance of Sales Pipeline Management
After you have a firm grasp regarding what sales pipeline management is, it’s critical that you constantly look for new deals to add. Not only should you attempt to maintain the same number of deals, but you should also be trying to grow your sales pipeline. It’s also essential to follow-up with deals by nurturing them with something relevant and of value. Lastly, put the bulk of your attention on the metrics the are flowing naturally through your pipeline and act accordingly.