Sales are the lifeblood of businesses. If your sales pipeline is empty, you have zero prospects to close. Every startup faces this situation, and if you lack adequate capital, your business will quickly fail.
We’re going to outline key components of:
A lead pipeline, or sales pipeline, is your business’s representation of all stages of the buying journey that the potential customer will go through. Sales leaders can leverage these visual representations in multiple strategic ways.
For example, sales teams often analyze the sales pipeline to determine the best stage to allocate more resources.
If customers aren’t impressed during the demo stage and never move to the negotiation stage of the pipeline, this may be a prime target for higher asset allocation. You may have strong prospecting and lead generation, but if you can’t move the prospect to the close, you won’t maximize revenue.
Optimizing the sales pipeline process offers many business-centric benefits.
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Businesses rely heavily on two main functions of the sales pipeline: action and measurement. Visual representation of the pipeline is only beneficial when companies are willing to allocate resources to the stages with the greatest bottlenecks.
Sales leaders will focus on the pipeline even when there are many closings because it can never be optimized too much.
Some of the reasons to focus on your sales pipeline include but are not limited to:
Forecasts are the cornerstone of decision-making. If you can pinpoint areas of the sales pipeline that can be adjusted and the percentage of leads that will not go through the stage, it’s easier to predict future sales.
Why are sales predictions and forecasts crucial to businesses?
If you have accurate data, you’ll know when:
Forecasts help businesses make the right decisions at opportune times.
Team members split the lead pipeline’s workload, helping optimize sales pipeline stages. For example, one member may work on prospecting, while another will qualify for the lead. Well-defined processes enhance collaboration and keep key members of the sales team “in the loop.”
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Metrics are a part of sales. Everyone in the sales department has learned of LTV, ROI, KPIs – and all of the other acronyms. Perfecting the sales pipeline stages offers visibility into the buying process that your team needs to maximize revenue and profits.
With these insights and the right actions, decision-makers can increase win ratios, revenue, and close rates.
Statistically, companies that focus on the customer experience see an 80% increase in revenue. Visualizing the sales pipeline in a new way and correcting friction points that customers have will improve the customer experience.
Stakeholders can initiate changes to the customer journey to improve satisfaction and experience while providing the immediate service customers demand.
Ask 100 markets and sales leaders what their main goal is this year, and they’ll all tell you: increase revenue. Even when record profits hit companies like Amazon and Google, the goalposts move, and revenue expectations rise.
If you perfect the sales pipeline, revenue will rise organically.
But you’ll also need to work on your sales funnel, which is not the same as a sales pipeline.
Both your sales funnel and pipeline are part of the great sales process. Your sales funnel is the visual representation of the entire buyer’s journey, from awareness of your product or service to the purchase.
Sales pipeline stages, which we’ll cover shortly, focus on the steps sales reps must complete to push prospects to the next stage of the pipeline.
For example, the sales lead stages start with prospecting, but to move to lead generation, specific actions must take place. From the lead generation, another set of actions must be carried out to transition to qualification and a meeting or demo.
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Typical sales pipeline stages encompass seven key areas of a prospect’s progression through your sales process. You may find slight variations from one company or sector to the next, but they’ll all generally include the following roadmap:
One survey found that 37% of marketers believe prospecting is the most challenging part of sales pipeline management. You may also find this term called “lead generation,” but they encompass the same core basics of reaching potential customers through:
Sales representatives will identify the exact target market to focus on in prospecting and pinpoint the business’s ideal customer. The goal is to use any channel possible for the prospect to enter the sales pipeline and move to the next stage of the sales pipeline: qualification.
Prospects are just that – prospects. They may or may not be your ideal customer. Sales teams will differentiate among them once inside the sales pipeline.
How?
Multiple strategies are used in lead qualification. Sales reps will determine the lead’s budget, authority, needs and how the business can best meet them. If the prospect isn’t a good fit, they won’t progress through the sales pipeline stages.
Next in the sales pipeline stages is a meeting or demo. “Meeting” may include face-to-face, phone, virtual, or other forms of meeting the lead. The goal is to assess the prospect’s needs and potential.
Depending on the niche and industry, a trial or demo may be given.
Sales teams utilize the meeting/demo stage to demonstrate the business’ ability to solve pain points. For example, if the prospect needs to find a backup solution for their database, the sales representatives will show them the many ways their product or service helps them achieve their goals.
Depending on the business and its product, it’s common for a tailored proposal to be made. The proposal may include all of the benefits of the product, how it will be delivered, and any extras that may be included, such as training.
Sales are rarely simple, and it’s not uncommon for negotiations to take place. Multiple stipulations and demands may be made, and both parties will engage in discussions to come to some form of agreement.
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At this stage, negotiations are complete, and a commitment is made. Once a contract is signed or payment is made, the deal is closed. Sales teams celebrate at this point because the hardest part of the sales pipeline has been breached.
Sales have been made, and prospects have been converted into customers. However, you shouldn’t give up just yet. It’s more cost-effective to retain a customer than it is to close a new one. You may find multiple methods to retain a customer, such as:
You must have a refined onboarding process and check in on the customer to prioritize them.
The stages of the sales pipeline have metrics that can be followed and incorporated into your business to improve your revenue and win ratio. If you have a clearly defined sales pipeline and processes, you can add some of the following metrics to your monitoring systems.
Your sales pipeline should work efficiently for you. One way to achieve this goal is to incorporate the right sales pipeline metrics into it, which will help you better visualize the company’s health and potential deals lined up.
While multiple metrics may be added, the following three are some of the most important:
Metrics help you better understand your sales pipeline process and indicate certain actions you must take to reach your goals.
But you must first learn how to build a sales pipeline in the most effective way possible.
An effective sales pipeline should align with the buyer’s journey to create a successful sales process. Building an effective sales pipeline starts with knowing your customers.
Your sales pipeline can’t be effective if you don’t know your customers. Make sure that you understand their needs and pain points so that you can determine how your product or service solves these needs. Create a buyer persona to deeply understand customer preferences and behaviors. It will help you to envision your ideal customer in tailoring your sales and marketing strategies effectively.
How do you get to know your customers?
Once you know your customers, you can start defining the stages of your sales pipeline.
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When defining your sales or lead pipeline stages, start with the initial contact and then move on to lead qualification, the proposal, negotiations and closing.
Each stage of your pipeline should be a reflection of where your customer is in the customer journey, whether it’s awareness, interest, consideration, intent, evaluation or purchase.
It’s important to define your stages carefully because you’ll need to identify the key activities that will help move leads along to the next stage.
Now that you’ve defined the stages of your pipeline lead generation, you can begin identifying the key activities for each one. These activities can include nurturing the lead, or personalizing communication or offers.
The first stage of your sales pipeline should focus on generating interest. Then, as the lead moves through the pipeline, you can focus on solving their pain points.
Key activities should evolve through each stage of sales pipeline to help push leads through to the final sale.
Delegate sales activities to team members to improve efficiency and productivity. Consider each team member’s strengths and expertise when distributing responsibilities, like lead nurturing, closing, or prospecting.
By taking this approach, you ensure that every team member will excel in their role.
Your lead gen pipeline should define key indicators, too. What metrics should your sales pipeline monitor? Sales targets, closing potential, deal value, conversion rates, and sales pipeline value are just some of the many indicators you’ll want to incorporate.
You’ve built your sales pipeline, but now it’s time to optimize it. Like any other aspect of marketing, your sales pipeline will change over time. It’s important to revisit it regularly to ensure you’re on the right track to reaching your goals.
There are several best practices you can follow to optimize your pipeline:
Following these best practices will help enhance your sales team’s performance and efficiency to maximize the return on your sales and marketing investments.
If you want to maximize sales, sales reps cannot act off on gut instinct alone. They need data.
The more data you collect, the easier it will be to reach prospects and leads with the right messages and through the right channels.
In fact, according to McKinsey, 53% of fast-growing sales teams are highly effective at using analytics to drive their sales strategies.
To leverage the power of data-driven decision making, you need to know how to collect and analyze sales data.
Collecting and analyzing sales data will allow you to make more informed and strategic sales decisions.
There are several ways to collect sales data, many of which you’re likely already using:
Collecting data is just one piece of the puzzle. Analysis will help you understand more about your prospects and existing customers, and you can use these insights to improve your sales pipeline.
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Now that you have a better understanding of your customers, you can analyze your customer data to identify opportunities to add value and solve problems.
Start by analyzing your customers’ current situation. Look for inefficiencies or gaps that you can fill. Maybe recent changes in their market or industry present an opportunity to introduce new services, strategies, or features that can help solve their problems or adapt to these changes.
You can also identify opportunities by:
Analyzing customer data to get valuable insights into their preferences, user behavior patterns, and purchasing behaviors. This data can be used to find upselingl and cross-selling opportunities.
Sending out surveys or asking for feedback. Use feedback forms and surveys to learn more about customer preferences and opinions. This data can help you learn more about their pain points and needs, allowing you to identify potential areas for improvement or upselling.
Finding opportunities within your existing customer base will allow you to maximize sales while improving customer loyalty. The more pain points you can solve and the more value you can deliver, the more likely your customers will stick around.
Predictive analytics uses real-time data and historical data to predict future outcomes. It can help you:
Predictive analytics can play an integral role in maximizing sales because it can help you improve your customer targeting to ensure you’re focusing on your ideal customers. It can also help you pinpoint customers who are at the greatest risk of churning, so you can reach out to these decision-makers and prevent them from leaving.
Having a glimpse into the future will allow you to take a proactive approach to your sales strategies and your sales pipeline.
An effective sales pipeline will serve as a solid foundation for your sales strategy. If you focus heavily on the sales pipeline, create it with a purpose, optimize it, and use it to improve processes, you’ll have an easier time exceeding growth goals.
