What is Sales Pipeline Management?
Businesses are using sales pipeline management over the years to boost sales opportunities, identify the right customer profile, do research, and target the market. But managing a sales pipeline is challenging for a variety of reasons. A sales team needs a stellar leader with rich expertise and hands-on experience in sales background who can quickly adapt to the fast-changing environment inside out.
Sales techniques, processes, and operations are a part of sales pipeline management. The sales pipeline is nothing but the breakdown of the opportunity into various stages. Setting up meetings, following up with prospective leads, creating tasks, and other activities are a part of the sales pipeline management.
The digitally connected world enables brands to create data-driven campaigns. It allows brands to understand customer preferences and frame their sales and marketing strategies accordingly. The sales managers and executives also have to keep track of their target audience, which can become a daunting task without proper monitoring and management tools.
The advent of Customer Relationship Management Software has empowered the sales team to accomplish operational excellence while managing the sales apparatus. The system effectively helps in building and managing the sales pipeline across a centralized database. The tool allows users to create real-time sales reports so that the sales reps can focus more on the potential leads, increase revenue, and stay organized.
According to Aaron Ross, author of Predictable Revenue, "If you clear your sales pipeline clutter every month, it creates space for new, high-quality opportunities."
What is Sales Pipeline?
The various stages that a prospective lead goes through constituting a sales pipeline. A sales pipeline offers tons of insights like how many prospective leads are available per sales rep, their stages, where they are stuck, and the bottleneck at that stage. It makes it easier for the managers to manage the prospective nurturing leads, track the movement, and handle communication.
They can visualize the sales pipeline with the help of a proper sales process and add a layer of accountability to achieve the goals.
The various integral parts of a sales pipeline are lead generation, lead nurturing, qualified marketing lead, Sales Qualified Lead, Deal closure, and Post-sale follow-up.
It has been observed that sales reps also have to devote much time to managing administrative tasks.
Although a CRM can help overcome many sales process challenges, identifying different selling situations, leveraging different sales approaches, and applying a suitable sales process based on the case to improve the sales pipeline efficiently handles the prospective leads. A sales pipeline offers a snapshot of various stages at which the prospective leads are. It means that you can easily calculate the sales quota for every week or month. Companies that do not define the sales process properly incur substantial revenue losses.
Maintaining a healthy sales pipeline helps businesses get an improved forecast on sales conducted, further enabling them to allocate better resources, process review, and stay focused on the target. In addition, mapping the pipeline to the sales process helps to manage it better.
For example, suppose a small business enterprise is looking to manage multiple pipelines parallel for various sales projects without a CRM. In that case, a spreadsheet tool may help it with a sales pipeline template.
What is Sales Pipeline Management?
Sales pipeline management enables businesses to manage, analyze, and improve their sales process. Managing and tracking activities like cold calling, appointments with new prospects, sales proposal generation, and much more is possible with sales pipeline management.
In addition, effective management of the sales pipeline helps the sales reps to keep track of each prospect at every stage, thereby ensuring a clear understanding of sales quota achievement. Furthermore, it has been found that top sales leaders and managers also use CRM tools, email marketing software, and collaboration tools to achieve their sales targets.
Core Features of Sales Pipeline Management
Sales pipeline management enables identifying new sales opportunities and eliminates bottlenecks in the process, thereby improving the quality, speed, and business revenue. The core features of effective sales pipeline management have made this all possible. The critical features include-
- The Pipeline metrics help to analyze the sales process and other vital insights.
- It effectively maintains the sales process by clearing up any clogs to improve efficiency.
- Optimization of the sales pipeline by evaluation of prospective leads at each stage of the cycle.
- Efficiently managing the sales team to bolster their performance and productivity.
- Providing crucial insights and real-time data with the help of the sales force automation tools to precisely monitor the sales forecast.
- Seamless integration with other tools helps to optimize the pipeline and boost revenue generation.
Difference Between Sales Pipeline and Sales Funnel
Sales pipeline and sales funnel are often misinterpreted. While the sales pipeline is a set of opportunities, the sales funnel is the journey of gaining perspective leads.
When a sales team generates leads, it unleashes multiple opportunities through various process stages. However, a sales funnel has different prospects that may or may not convert into customers. It means that all potential leads do not become a customer.
On the other hand, the sales pipeline includes lead generation, sales calls, outbound emails, and meetings, qualifying, meet, propose, and closure.
The Different Stages of Sales Pipeline Management
Prospecting is that initial stage where the sales rep contacts the prospective lead and interacts with them. Advertisements, promotional activities, targeting, public relations are a few ways of finding the ideal customer. It is indeed one of the most challenging jobs for sales reps.
The prospective buyers are sent promotional content in the form of e-book, whitepapers, and webinars to determine their level of interest. Once they show their interest, the prospective lead moves to the qualified stage.
The sales team moves to schedule a demo or meeting so that the potential buyer can better understand the product or service offered. The sales reps usually evaluate the use case for the lead to pursue further. It has been found that prospective customers like to get in touch with the sales reps during the awareness stage when they learn about the product or service.
4. Building Relationships
At this stage, the sales reps address the prospective lead's pain points and address them quickly, so they are convinced to pursue the relationship further and discuss the next steps.
It is the final stage where the prospective lead may begin discussing the cost and terms of service and arrive at a mutually beneficial agreement. Finally, the lead converts into a customer, and the order fulfillment begins.
While closing a deal, the sales team offers exceptional service and tracks the account's progress. It not only helps to upsell further but retain the customers and seek referrals for potential leads.
Building a Sales Pipeline
A good sales pipeline template must cover the basics like the various stages and metrics to draw helpful insights to make the right strategic decisions. Top sales managers are of the view that they used to explore the sales pipeline in a manual spreadsheet, which needed to add endless columns and use color-coding to make sense. But today, with the evolution of digital technologies, the sales pipeline has become more dynamic, allowing them to quickly and easily focus on what they want to view.
The following factors become pivotal while creating a sales pipeline-
- Source of lead generation: Ads, email campaigns, customer referrals, and other marketing or sales techniques are the key sources of generating leads.
- Niche: All products and services have a specific niche in the market. It becomes relatively easier to target the audience based on that particular niche.
- Key decision-makers: The pitch that works well for a CEO may not be a good idea when pitching it to the CTO or a finance head. It is vital to consider the critical decision-makers while formulating the sales pitch.
- Revenue Value: Deal size varies from one customer to another. At the same time, the revenue value of one deal can be a hundred or a thousand times more than the other. Hence, segmentation and personalized pitches are helpful to convert leads of different sizes accordingly.
- Closure: It is essential to check whether a lead is qualified or not, failing which you may not get a significant conversion irrespective of its high value.
- Flexibility: One pitch, analysis, or template does not fit all. Therefore, it is vital to stay flexible and accommodate changes as per the characteristics of the prospective lead.
- Analytics: Reporting helps to understand better the team's performance, bottlenecks at various stages of the sales process, and many other valuable insights. The data analyzes the challenges better and makes changes accordingly.
Best Practices for Sales Pipeline Management
1. Follow up
Decades ago, sales reps had to make fewer calls to close a deal. But today, they have to continuously follow up with the customers and make more calls to convince them. So, what has caused this big difference? The answer is that back then; customers did not have good options as they have today; hence, their decision-making was that much simpler.
But in the current day scenario, several companies and service providers have started offering various products with best-in-class features. Customers have many choices, making it more challenging for the sales reps to persuade them to buy the product. Sales reps often have to adopt unique techniques to increase the follow-up process.
However, following up is an intricate process as leads do not turn into potential clients with ease. Also, you need to set up reminders and automate the procedure with the help of automation tools.
2. Focus on the Best Leads
While many prospective leads are available in the pipeline, investing only in more sales-ready and higher value proves handy. Therefore, sort the leads based on value (high to low), consider its qualified stage, and concentrate only on those that match both criteria.
It must be noted that the efforts to win three low-value deals are the same as the one high-value lead. It means focusing on the high-value leads qualified for the sales process is more helpful to meet those targets.
3. Drop the Dead Leads
It is vital to focus on both high-value leads and know when to stop pursuing them. Letting a lead go even after spending significant time on the same makes one disappointed. However, once the lead mentions that they are not interested in pursuing the deal after multiple attempts from the sales team, it is time to say bye! The time and efforts invested in a dead lead go to waste, but it may also get negative attention from the wrong audience and hurt the brand. It simply means that one-size-fits-all methodology does not succeed. So, better drop the dead deal.
4. Pipeline Metrics
Tracking the key sales metrics is helpful because it is the real-time update of the active number of prospective leads in the sales pipeline that keeps changing at every moment. A few valuable insights are available for review: the average size of each lead, the closure ratio, and the average lifetime of a closed deal.
Reviewing the sales pipeline helps get a quick update on what is happening on the sales pipeline and glance at the sales quota to understand if the numbers are achievable.
There are always a few leads that get stuck at a stage due to any hiccups, and a regular review may help find out whether there is an issue with the team or the lead is not interested anymore.
5. Pipeline Process Review
Like everything else, sales techniques are also changing. Hence, adapting to changes becomes pivotal to ensure that the sales techniques sync with the external and internal transitions. While one approach may not fit all the prospects and requires fine-tuning from sales pitches to follow-ups.
Identifying issues at early stages and finding a way to clear them out helps to improve efficiency. Trivial changes make a big difference to the pipeline, thereby creating a robust pipeline.
It is crucial to remember that the sales pipeline keeps changing every minute with new leads joining the pipeline, qualified leads moving from one stage to another, and closures happening. If not monitored closely, the pipeline can go from organized to chaotic, making it challenging to track the high-value leads.
In addition, updating notes, adding information for leads at different stages, and many other inputs are required so that the pipeline reflects the real-time changes.
6. Keep your Sales Cycle Short
A lengthy sales cycle can do more harm than good.
The sales reps' view that a long sales cycle reduces the effectiveness and efficiency of sales, regarded as one of the most significant barriers. The longer the process, the better the prospect can change their mind and find a more suitable product/ service to fix their issues.
Reports show valuable insights like which stage the leads are going cold and what numbers are not a part of the conversion. It helps to understand the problems better so that the team can work accordingly.
While there is no hard and fast rule about the number of days that should be a part of the follow-up/ next step, it is vital to make changes as per the prospects since a little too early / soon may cause more damage.
Keeping the lead warm and ensuring they do not lose interest is essential not to harass the prospects with constant calls/communication.
7. Standardized Sales Process
Each customer is different, so it is only fair that the sales reps adopt unique sales techniques to improve the chances of conversion. However, it is vital to follow a standard process, whether it is for sales calls or a demo.
The sales reps should understand the mindset of prospective customers while drafting a sales technique and process. Following the standard guidelines to qualify a lead, ensuring a prompt follow-up, asking for referrals, and staying updated on the industry trends helps sales reps broaden their knowledge and use it to convince prospects better.
Offering helpful content at every stage makes it a lot easier to convert the prospect. In-depth information, whether through email or newsletter/ product demo, helps keep the opportunity warm. It is also helpful for them to understand the brand better to make a well-informed decision.
Careful designing of content is vital for the success of conversion. It is essential to keep the brand message uniform across all campaigns or content formats to ensure that it helps to reinforce the brand message. Designing content based on the target audience and their preferences is the key.
Research, sales meetings, regular interactions, and discussions about the pain points that the prospects are facing are good data points to be considered while designing the content.
The sales and marketing teams' constant feedback regarding the inputs to meet the prospective client's expectations usually offers valuable data to design customized content to the target audience. Articles, videos, blogs, and infographics are a few types of content that work best for prospects at the top of the funnel.
In addition, content in the form of eBooks, case studies, white papers, and video tutorials is helpful for the prospects in the middle of the funnel. Finally, the opportunities at the bottom of the funnel would appreciate offers like free evaluation, trials, and coupon codes.
9. CRM for Sales Management
Managing a sales pipeline with leads at various stages ranging from lead nurturing to closure can be challenging to track. However, CRM tools offer campaign reports that help follow the campaign's performance and the stages of each lead.
An easy-to-use CRM tool can help generate a humongous amount of data effortlessly and manage the sales pipeline without any hassles. CRM helps businesses make data-driven decisions, track prospective leads, and monitor the sales pipeline's real-time changes.
Automation of processes, streamlining workflows, generating insightful data, tracking pipeline activities, and generating a real-time report of the potential sales pipeline can all be monitored in just a few clicks with a CRM tool.
While automation of processes is much easier with a CRM, it also enables the team to manage many leads effortlessly.
Hopefully, the best practices discussed above will help your company organize and streamline the sales pipeline activities. Investing in the CRM software helps manage sales pipeline, improve revenue, clear and review pipeline to check the current status, add prospects, identify, and remove any roadblocks.
The system can automate the data entry process, sales report and streamlines the internal team communication to improve collaboration.
If you plan to digitize and innovate your sales techniques and provide customers with a matchless experience, but run short of budget, you can still try the free CRM tools or you can invest in the free and open source CRM software. Also, do not miss to check the CRM software buyer's guide to gain comprehensive information on the tools, and to make an informed decision.