Sellers love to sell and close. But in the marathon of sales, closing is the home stretch. What’s equally as important as closing, if not more, if mapping out your journey to get there.
Like the top marathon runners, the best salespeople log their steps and embrace the journey to success. That’s how a sales pipeline helps you win a customer by logging all the steps and managing the race. It gives you the guidance and structure to build long-lasting relationships with the prospects and secure consistent sales.
That may seem like quite a hurdle, but Harvard Business Review shows that B2B companies with a proper sales pipeline experience more than 18% greater revenue growth. Moreover, businesses with well-optimized sales pipelines have a 28% higher revenue growth rate.
What Is a Sales Pipeline?
A sales pipeline is a visual representation of opportunities at each stage of the sales cycle, from the initial contact to closing the sale. It provides a strategic roadmap for businesses and their sales teams. Each stage in the sales pipeline represents a milestone in the buyer’s journey. It further shows you where each prospect is in the buying process and ensures that no opportunities to close the sale are missed.
It allows you to focus on the specific actions your business needs to take to convert leads into customers and lets you manage your prospects more accurately by catering to their current decision-making needs.
Stages Of Sales Pipeline
The stages of sales pipeline vary from business to business, depending on the target audience, customer base, specific requirements, and processes. However, some of the stages of sales pipeline are common to all businesses. The key ones include:
- Prospecting: This includes the actions your business needs to take to reach out to potential buyers and generate leads.
- Qualifying: This is the process of determining which prospects meet the requirements for making a purchase.
- Contacting: The moment your business establishes contact with a prospect to understand their requirements by scheduling a sales call or product demo.
- Nurturing Relationships: Developing and strengthening relationships with leads at every stage in their buyer journey.
- Offering a Proposal: This stage includes pitching your products or services to the prospects after understanding their needs.
- Negotiating: This is a strategic conversation between your business and the prospect to determine the cost of your products or services, services provided to the prospect, and other details of the deal.
- Closing The Sale: The moment when a customer signs the Service Level Agreement (SLA) and makes the purchase.
- Offering a Post Purchase Experience: The process of providing exceptional after sales services to the customers from onboarding to delivering the project.
- Following Up with Cold Leads: This is the last stage in the sales pipeline where your business needs to reach out to unresponsive leads to re-engage them and gauge their level of interest in buying your products or services.
How to Build a Sales Pipeline
Have you ever noticed that some leads stuck at the initial stage as prospects attend meetings but don’t move forward, causing a bottleneck? As a result, your sales reps are consistently engaged with the same customer for weeks, sometimes even months. This is why a strong sales pipeline is necessary to see which stage your prospect is at and whether they qualify your requirements or not. Here are the steps to build a strong sales pipeline:
Identify Prospective Buyers
You need to identify potential buyers and categorize them based on their current stage in the buyer’s journey. Organize opportunities by stage to gain a clear overview of pipeline health.
Define Sales Activities For Each Stage
Assign specific marketing and sales activities to your team for each stage by modernizing and streamlining your sales processes. Personalized sales processes reflect your business’s unique sales pipeline, allowing for better efficiency, tailored approach, and forecasting of revenue as prospects move through various stages in the sales cycle.
These activities could include sending targeted emails, tracking key metrics, gathering and sharing lead magnets, creating promotional content, conducting demos, and drafting proposals.
Determine Your Sales Cycle Length
Assess the length of your sales cycle to set realistic expectations and forecast revenue accurately. Some of the keys factors that can affect the length of your sales cycle include product complexity, customization requirements, and lead sources.
Set Your Ideal Deal Size
To maintain a healthy sales pipeline, you must pursue more deals than your actual sales target. This is because some opportunities will inevitably fall through the stages of sales.
Regularly Clean Up Your Pipeline
Regularly review and remove deals that are inactive or stuck in a stage longer than your typical sales cycle. Focus your team’s efforts on the most promising opportunities by creating follow-up tasks or defining criteria for moving inactive deals to a “dead leads” list.
Monitor Key Sales Metrics
Define and track crucial sales pipeline metrics to ensure your pipeline remains healthy. These could include average deal size, close rate, conversion rate between stages, and overall pipeline velocity.
Regularly monitor the metrics to spot trends, identify bottlenecks, and optimize your sales process for maximum efficiency and revenue generation.
Benefits of a Well-Structured Sales Pipeline
A strategically organized sales pipeline serves as the backbone of successful revenue generation and business growth. A structured approach to your sales process can transform sales operations and achieve improvements across multiple areas. Some of the key benefits a well-structured sales pipeline can provide include:
- Enhanced Sales Forecasting
- Improved Team Collaboration
- Effective Lead Management
- Superior Customer Experience
Build Your Sales Pipeline Today
If you want to master results, you must master your sales pipeline. The sales pipeline benefits the entire business, not just the sales team. When everyone aligns around revenue goals, every team within your business succeeds.
A well-managed sales pipeline is dynamic, requiring continuous attention, customer behaviors, consistent reviews, and flexibility to the ever-changing trends in the market. However, it would be best to keep the below-mentioned sales pipeline best practices in mind:
- Consistently monitor your sales pipeline metrics, such as bi-weekly, monthly, or quarterly.
- Refine your sales pipeline every time when your target audience and business needs change.
- Use CRM to manage prospect data and automate your sales processes.
