Sales pipeline management is often seen as the holy grail of modern business management. Research by Hubspot showed that 40% of sellers fail to meet their targets due to poor sales management. Far from a daunting task, properly managing a sales pipeline enables businesses to easily identify when and where growth opportunities exist — and how to capitalize on them.
So, what, then, do businesses need to know about sales pipeline management? The key is to break it down into pieces to manage each stage individually so that it does not feel daunting. In this article, we will discuss 6 valuable strategies that will aid companies in effectively managing their sales pipelines to maximize their potential returns.
What is a sales pipeline?
A sales pipeline is a vital tool for salespeople who often have to juggle many different prospects and deals and can’t afford to lose one through the cracks. A proper sales pipeline represents a business’s sales process and makes achieving goals easier.
It is also an important tool for sales managers who want to determine the efficiency of their sales process since it shows which deals bring the company the most income. Businesses not using a sales pipeline can have major challenges gathering their sales insights. Therefore, they are unlikely to know if their sales performance is great and where they are losing deals.
In a sales pipeline, there are 5 crucial stages. These are as follows:
- Prospecting: This stage is also known as lead generation, where businesses look for customers using methods like referrals, advertising, or even the cold calling technique. Here, businesses can also forecast sales based on the number of leads.
- Qualification: The next stage entails assessing prospects based on the company’s criteria. Businesses identify which prospects are likely to become customers.
- Proposal: After businesses cherry-pick their customers, they can propose their products and services. This involves making negotiations and addressing matters about the product and prices to them.
- Decision: Based on how the business has pitched its product or service, the prospect decides whether to make a purchase at this stage.
- Closing: Closing is the final stage in the sales pipeline. Here, the prospect becomes a paying customer once ready to get the product the business is selling.
Each of these stages should lead to the next and help businesses identify loopholes they can fill to increase their sales. From understanding the customer journey and creating incentives to segmenting customers and changing the team’s mindset, these strategies can give them an edge in sales pipeline management. Let’s look at each of them below.
6 tips to effectively manage a sales pipeline
1. Define and segment your sales pipeline
Defining and segmenting a sales pipeline is one of the most important steps in managing it effectively. Now we know that a sales pipeline is a structured system outlining all the steps a prospect must make before becoming a customer.
Segmentation is dividing each stage into smaller parts. Doing this helps one better understand where prospects are in their journey and what further steps need to be taken to move them through to conversion. When it comes to segmenting a sales pipeline, there are several steps businesses can take. They should:
- Break down each step into individual tasks and timelines
- Keep track of customer contacts at each stage
- They can create checklists for prospects as they go through the pipeline process
- Automate processes such as lead nurturing and contact management
- Set achievable goals for sales staff
- Track progress throughout the pipeline to ensure activities align with the company goals
Following these steps helps businesses better understand how their customers move through the pipeline. Moreover, the sellers can optimize their workflow and eventually improve their customer experience.
2. Track the right metrics to measure pipeline health
No matter how well businesses plan, track, and nurture their sales pipeline, they must measure the right metrics to properly assess their pipeline’s health. Measuring the right metrics requires an understanding of what to measure and why.
There are various metrics businesses need to measure in a sales pipeline. Here are some examples of the metrics to consider tracking and what they entail:
- Conversion rate: This is the total number of leads converted to sales divided by the total number of leads in the pipeline.
- Opportunities created: This is a good indicator of how many potential deals are being actively pursued in a given period.
- Average sales cycle: This metric allows businesses to measure the time a customer takes from prospecting to closing a deal.
- Pipeline size: The total number of leads in various sales process stages at any given time. Regularly tracking this metric ensures a steady flow of new leads entering the funnel.
Tracking these metrics accurately shows what’s going on in the pipeline. In the end, sellers can make the necessary adjustments to improve their sales performance.
3. Set clear standards and best practices
Having clear standards and best practices in place for the sales pipeline is a vital strategy. Doing so can help ensure all tasks are completed correctly and on time, reducing the risk of miscommunication or data-entry errors.
These standards and best practices should include:
- Specifications for how data should be collected, including the type, frequency, and accuracy of data entry
- Protocols for dealing with tasks that are delayed or not completed on time
- Guidelines for tracking progress and following up with customers
- Rules outlining how to use automated systems or reporting tools
- Possibilities for streamlining certain processes
- Detailed plans for handling customer queries
- A system for assigning tasks to team members so that they are completed on time
By establishing these guidelines ahead of time, sellers can ensure that everyone is on the same page when managing their sales pipeline — from tracking progress to responding to customer queries, thereby creating a more efficient system overall.
4. Provide adequate training and resources for your sales team
Providing sales teams with the necessary training and resources is an important step for businesses to manage their sales pipeline effectively. A sales team needs to be competently trained to identify leads or close deals successfully.
By equipping them with the knowledge they need to succeed, they can increase their chances of making more sales and closing deals quickly. Businesses can take the following steps to provide their teams with adequate training and resources:
- Offer regular training sessions: This will involve setting up regular sessions where everyone learns together and asking them to provide feedback on their experiences.
- Utilize online resources: There are plenty of online resources out there that can help train salespeople on various topics, such as customer service skills, marketing strategies, and more. Businesses can use free articles on the internet to equip their employees with proper skills.
- Provide access to ongoing learning materials: Continuous learning isn’t just for college students. Businesses should provide access to books, podcasts, videos, and other materials to help equip their sales team in new areas they can focus on.
By taking these steps, businesses can better manage their sales pipelines by ensuring that all their components run smoothly.
5. Use CRM software to track and manage deals
When managing a sales pipeline, having the right tools aids businesses in staying organized and efficient. Investing in customer relationship management software is a wise choice, as it allows business owners to track and manage their deals from start to finish. With a CRM tool, businesses can:
- Monitor progress throughout the sales process
- Keep records of all customer interactions (including emails and calls)
- Identify opportunities for improvement in the pipeline
- Automate sales tasks like follow-ups or reminders
- Generate reports and use data to make decisions
Using a CRM system can save businesses time and money in the long run while allowing them to run their tasks more efficiently and effectively. Some of the best CRM software today include Zoho, Zendesk, Monday, and Salesforce. Utilizing such platforms can lead to increased customer satisfaction and more successful deals down the line.
Read more about the 5 benefits CRM systems bring to businesses.
6. Review and revise the pipeline regularly
Maintaining a sales pipeline requires regular reviewing and revising of the process for sellers to ensure it operates as smoothly and efficiently as possible.
It’s important to understand that the sales pipeline is not a set-it-and-forget-it process. If left unmonitored, leads can bounce from one stage to another for long periods or get stuck in limbo until they eventually die off, taking the business’s potential profits.
Regularly reviewing and revising the sales pipeline makes it easy for sellers to identify potential problems before they arise and make changes to keep everything running without any hiccups.
Effective sales pipeline management requires knowledge, planning, and accountability. By implementing simple rituals such as having a defined sales process and goal setting, businesses can understand their progress and discover areas of improvement. Additionally, staying on top of trends and understanding customer behavior can help maximize efficiency.
A sales pipeline strategy is essential for any business to stay competitive and increase revenue. Utilizing the above strategies will vastly help owners improve their pipeline strategies and find their way to success.