An efficient sales pipeline is the key to building a profitable business. Closing the deal and clinching a sale is the ultimate aim of all business process and a killer sales pipeline just helps to streamline the process.
According to a research by Harvard Business review, companies which have established a formal sales process and follow robust sales pipeline practices saw a 28 percent higher growth in revenue.
What is a sales pipeline and why is it critical to your business needs?
A sales pipeline is a visual representation of the prospective buyer’s journey as they move along the different stages of your sales cycle. The sales pipeline gives an overview of your company’s sales process, broken down into actionable steps to track multiple potential buyers and convert leads into customers.
A sales pipeline is important for
- Tracking all your leads in a single glance
- Having a snapshot of opportunities at each stage of the buying process
- Forecasting sales and selling in a systematic manner
- Accurately predicting the revenue
- Prioritizing time and creating an integrated marketing strategy
All the efforts in the sales process are directed at getting the customer to buy your product or service. While this may sound simple and straightforward, the actual sales process involves a number of touchpoints.
The prospects need to be guided through the various stages by providing relevant information and assistance and occasional follow-ups to aid the decision making process and nurture the leads. This is where the Sales pipeline become vital to your sales efforts.
Here are the steps you need to follow to build and manage a killer sales pipeline that helps you close deals and generates more revenue.
Step 1. Preparatory Phase
The work for a robust sales process starts even before setting up the actual pipeline. Effective selling needs to have a sound foundation and in the preparatory phase, you need to do the following,
- Know the product: Intimate knowledge of the products ins and outs is essential for all salespeople. Only then will you be able to respond to the queries of the prospective buyers in a confident manner and be able to convince the leads to convert into customers.
- Define buyer personas: Knowing your ideal target customers and segmenting them into specific buyer personas helps you to know your prospects better and helps close more deals. Know the trigger and the problem your product would help the customers solve and this would help you categorize the customers into distinct buyer personas.
- Perfect the product pitch: Crafting a bid that the customers would find hard to resist is an integral part of the sales process. Make sure your pitch addresses the customer issues and highlights how your company’s product or service would be an ideal match for the customer and you are good to go.
Step 2. Setting up the sales pipeline
Every company’s sales process is unique and comprises of a number of different stages. There is no fixed blueprint for the stages in the sales pipeline as the requirements are business specific.
The sales process typically goes through stages which culminate with the buying decision. Depending on the business needs, the number of actionable steps in the sale stages are determined. Clearly defined and planned sales stages constitute the fundamental building blocks of your sales pipeline.
The best way to set up the sales stages is to take a close look at your existing sales process. You would notice conversation and activity patterns start emerging as you examine the different deals that you have successfully closed in the past. Use these patterns as a cue to define the number of steps in your sales pipeline. It is important to think of the sales pipeline from the customer’s point of view. Everytime a decision point comes into play, a corresponding step should be added to the pipeline.
Step 3. Mapping up the stages in the sales pipeline
Once you have outlined the stages in the sales pipeline, it is time to start mapping up the data. While people do make use of simple tools like an excel sheet to map the pipeline, using a sales CRM is recommended for getting the complete view of the entire sales pipeline at a glance.
Broadly speaking, the structure of every sales process comprises of the following seven stages.
1. Lead generation: In simple terms, a lead is an individual or organization with an interest in your product or service. Lead generation is the initiation of consumer interest or enquiry into products or services of a business.
When the prospective buyers first interact with the company by sharing their contact information, they officially enter the sales pipeline as a lead. Your company can generate leads by following either of the two methods
- Inbound Marketing- The technique of drawing in potential customers via content marketing, social media marketing, SEO, branding and networking events. The company doesn’t directly approach the customer but rather the potential customer reaches out to the company because of an interest in the products or services.
- Outbound Marketing- The technique when the sales team actively reach out to the potential customers by means of emails or cold calling to inform them about the products and services offered by your company.
2. Lead nurturing: After the initial contact has been established, the next stage involves nurturing the lead. The secret to conversion is having a product or service that would solve a problem for the leads generated.
During the lead nurture stage, it is imperative to gather information about the existing problem and shedding light on how your product or service can effectively solve the problem for them. It also requires answering any questions and responding to any queried the lead generated may have.
3. Lead qualification: Not all the lead that express their interest end up buying the product. Lead qualification involves identifying which lead are worth pursuing based on the likelihood of them making a purchase.
Leads which express an interest in your product (maybe they enquired to know more about the product or spent considerable time going over the pricing page of your website) are called as qualified leads. Identify the trigger behaviours which move the lead through the next stage and eventually lead to conversion. Having a process in place for lead qualification allows the sales team to focus their efforts on lead that are more likely to convert.
4. Product Pitch: The sales demo or the product pitch to the qualified leads is aimed at giving them an insight into how your product functions. At this stage, the leads are ready to hear the product or service specifications from your sales reps.
Your goal should be to sell the prospect on the benefits that your product or service offers them. Make your pitch all about the potential customer and tailor it to fit their needs and you have ensured that you have a perfect sales pitch that converts.
5. Proposal: Decision making is a complex art. Make sure that the proposal you draft for the prospective buyers is tantalizing and proves to be difficult to resist. The sales management software can be used to keep track of all the conversations that take place during the negotiation phase so that you are constantly on top of all the deals that are in the sales pipeline.
6. Scheduling of follow-ups: It is possible that the leads do not immediately sign up after you send them a proposal. A number of factors influence the decision making process. There may be residual doubt or the purchase decision may involve other players as well.
Scheduling follow ups at regular intervals gives a gentle reminder as well as gives an opportunity to clear any doubts or hindrances the lead might have. You need to remove any doubt from the buyer’s mind and convince them that doing business with your company is the right decision.
7. Closing the deal: Closing is the last stage in the sales pipeline. If the customer ends up buying the product or service offering, it is closed won. In case the deal fails to go through, the lead becomes dead and ends up closed lost.
When the deal is won, it is essential to start immediate onboarding and delivery to ensure maximum customer satisfaction. A loyal customer base can be a great touchpoint for upselling or cross-selling your products and services.
Step 4. Identify and refine the key metrics on the basis of the sales pipeline
Tracking the pipeline metrics not only help in better managing the sales pipeline, they also help in forecasting accurate sales revenue and give a accurate insight into the performance of your sales teams.
Some of the key metrics that should be tracked based on the pipeline data are,
- Lead conversion rate
- Customer lifetime value
- Lead response time
- Time spent selling
- Customer acquisition cost
Step 5. Refine the sales process based on the metrics
The metrics obtained can help in identification of the bottlenecks and areas of inefficiencies within the sales pipeline. Identify what works and what doesn’t so that the efforts of your sales reps can be directed in a more productive manner.
Use the pipeline data to inject new ideas and refine the existing processes. Sales metrics are an effective way to analyse, reflect upon and improve the existing sales process.
Step 6. Revive the dead leads
The prospects that don’t end up buying are a valuable resource to your company as well. Identify the stages where the leads fell off and find out the improvements that can be made in those areas that would be of interest. If you have future offerings that might be of value to them, reach out and inform them.
Keep them engaged with content that they might find relevant. Subtly keep reminding them that your products or services would be available to them whenever they need it and are ready to make the purchase.
Step 7. Constantly update the sales pipeline
The stages in the sales pipeline need to match with your typical sales scenarios to be truly effective. Review the stages in your sales pipeline on a periodic basis. Delete a stage if you find it to be redundant, add missing steps to the pipeline,and rename the pipeline stages to provide more clarity.
The sales pipeline should provide an exact snapshot of whatever is happening in your sales process at a glance. Backtrack and take a look at your sales pipeline from your customer’s point of view. Reflect on the buyer persona and visualize the steps your customers would take leading up to the purchase decision and make the necessary updations to your pipeline.
Step 8. Generate referrals
Word of mouth referrals are the best way to ensure product success and generate higher revenue. Ask the leads that you have successfully converted for contacts that might find your products and services valuable. Incentivize your referral program for your customers so generate more sales.
Maintaining an effective sales pipeline requires discipline and regular updation. The pipeline needs to be filled on a regular basis to help you stay on top of your sales process. Devote certain time of the day to log the daily updates within the pipeline and train your sales reps to do the same. The deals need to be moved through the various sales stages as they progress in order for them to be relevant. Make the pipeline an integral habit and the rewards generated would speak for themselves.