A pipeline plays a pivotal role in any successful business. 72% of sales managers hold sales pipeline review meetings with their sales reps several times a month. However, 63% say that their companies do a bad job at managing their sales pipelines – showing the vast room for improvement.
We live in a digitally connected world with sales and marketing teams being more data-driven than ever before. This grants access to large quantities of information but also grants people far more accountability. Executives are under more pressure than ever to understand the pulse of their business and at the heart of most businesses is the sales pipeline.
What is a Sales Pipeline?
A sales pipeline is a visual snapshot of where prospects are in the sales process. The pipeline shows how many deals salespeople are expected to close in a given week, month, or year and how close they are to achieving that target.
If you have a pipeline worth $100,000 in contract value and your conversion rate, from lead to a sale, is 10%, then you can expect to close $10,000 worth of new business.
This is where a pipeline analysis comes in. If you can identify improvements within your pipeline that will help you to move prospects from one stage to another you will be more successful at your job.
A study by the Harvard Business Review found that there was an 18% difference in revenue growth between companies that defined a formal sales process and companies that do not. Furthermore, companies that mastered three specific pipeline practices saw 28% higher revenue growth.
For B2B sales, having a healthy sales pipeline allows you to:
Improve your sales process,
Forecast future business results,
Analyse different sales strategies for your business,
Manage and allocate resources to close or service upcoming sales,
Review your progress for the current financial year, and
Know how far you are from your targets.
A sales pipeline plays a key role both in closing more sales deals and indicating the overall health and future direction of your company.
10 best practices to manage your sales pipeline.
1. Remember to follow up.
Buyers today have more choices than ever before and because of this, they need more help to make the right decision and choose your product or service. Ten years ago, it took just 3.68 sales calls to close a deal – today, it takes more than 8.
The best salespeople will make sure they keep following up with leads to land the sale. Most sales professionals give up after 2 calls – so make sure you always follow up.
Following up is not easy. In fact, it is currently ranked as the third biggest challenge for sales teams.
One way to follow up is to set a reminder that notifies you each time you need to follow up with a prospect. Another solution is to automate the process completely, by using one of your sales email templates to automatically follow up on a specific date or after a specific time period (i.e., two weeks after the initial phone call).
2. Focus on the best leads.
Take a closer look at your sales process, it is likely that it takes roughly the same amount of time to close each deal. Make sure you are concentrating on your best, most sales-ready, high value leads and avoid being distracted by anything that will not push you to reach your targets.
For example, if you sort your sales dashboard from high to low, instead of by date, you can instantly see which leads are the most valuable to your business. By viewing your sales activities for each lead, you can identify which leads are the most engaged and which ones you should then focus on
3. Drop-dead leads.
As important as it is to focus on high-value leads, it is equally as important to know when to let go of a lead, too. Letting go can be hard, especially when you have spent weeks or even months building and nurturing a relationship with them
A lead is dead when they clearly state they are not interested when they cannot be contacted, or you have spoken to them multiple times and they cannot be pushed through to the next stage of the pipeline. Learn to identify these dead leads quickly, so you can move on to the next sales opportunity to close a big deal – without wasting any more time trying to breathe life into leads that simply will not buy from you.
4. Monitor pipeline metrics
Your sales pipeline is a living, breathing entity that changes all the time. Therefore, you need to monitor the key sales metrics that it produces, which includes things like:
The number of deals in your pipeline
The average size of the deals in your pipeline
The average percentage of deals that you win (close ratio)
The average lifetime of a deal before it is closed (sales velocity)
Make sure you set aside time weekly to regularly review these metrics as they will give you an ‘at a glance’ view of the health of your sales pipeline and your business. Tracking the results over time will also give you a strong indication of how any changes or improvements you make to your sales process are contributing towards overall growth.
5. Review your pipeline processes.
A sales technique that works today may not work tomorrow (remember cold calling?). This is especially true with the introduction of GDPR and how it impacts sales teams. The best sales organizations regularly review their sales pipeline and techniques to make sure things are finely tuned and highly optimized to ensure maximum efficiency and success.
When it comes to sales, everything – from the first sales pitch, the frequency of follow-ups to the offers you make – can be improved and adapted over time until you find a successful formula. The best way to approach these changes is to look at where you think there are bottlenecks or blockages in your pipeline and consider ways in which they can be cleared out. From there you can test changes or run mini “sales experiments” to try and continuously improve each part of the process. If you look at making these changes bit by bit and one at a time, your pipeline will become a well-oiled sales machine in no time!
6. Update your pipeline regularly.
Your sales pipeline is constantly changing. New leads are added, leads move through from one stage to the next, and deals are closed. If you are not careful, your sales pipeline can start to get a little disorganized and chaotic – which will make you inefficient and could lead to lost sales.
To avoid this, you need to make sure that you are keeping details up to date on every single lead by adding regular notes and information for each stage of the sales process. Yes, this does mean you need to spend more time on admin, but if you use this time to remove dead leads or update outdated contact information, then it is time well spent.
7. Keep your sales cycle short.
Unlike B2C, the sales cycle for B2B companies can belong. In fact, 75% of all B2B sales take at least 4 months to close, with 18% taking 12 months or longer! According to CSO insights, 27% of sales reps say that a long sales cycle is one of the biggest barriers to sales effectiveness. The reason for this is simple – the longer your sales process, the more chances your prospect has of changing their mind or finding an alternative product or service to solve their problem.
That is why it is important to keep your sales process as short as possible. If you are finding that most of your leads are going cold and you are not closing enough sales to reach your sales targets, then you may have a problem with the length of your sales process. Reducing the sales process length does not mean you should bombard your leads with all 8-12 follow-ups in a single day, but it does mean you should consider ways to shorten it where possible. This could mean reducing the number of days between follow-ups or coming up with ways to give your prospects more information upfront to help shorten their decision-making time.
8. Create a standardised sale process.
It is easy to think that each customer is different and requires their own custom approach to closing a sale. More so, you may notice that your sales reps are employing varying outbound sales techniques. They may create their own routines, be it outreach, sales calls, one-on-one meetings, live demonstrations, or follow-ups.
But, if you really think of it, your ideal target customers have a lot of things in common. The truth is that their underlying needs and reasons for buying from you are all broadly similar – and it is this you should use to your advantage to standardising your sales pipeline. Custom sales techniques take time and add massive overhead – which impacts your bottom line. A standardized, repeatable, sales process can be fine-tuned to perfection over time and can scale with your business as it grows.
9. Give your prospects more content.
While phone calls and emails are at the heart of most sales’ communication, prospects will often require more, in-depth information to help them understand if your product or service is right for their business. For each step of the pipeline, think about what kind of content you can provide to your prospects that will help reinforce your message and take them through to the next phase.
During sales meetings, they will give your insight into the types of content they want at each stage of the pipeline. For example, they might ask you for something as simple as “do you have an article that explains this feature?” or “is there a product sheet I can download?”.
The challenge here is that only 27% of sales reps who are out in the field and meeting with prospects collaborate with marketing on content creation.
10. Use a CRM to manage your sales.
When your sales pipeline is full of leads – and leads are all in different stages of the process – you need to make sure you are managing it effectively. If you are a one-person sales organization on a tight budget and only making a few sales per month, then you can use a simple Excel spreadsheet to track all the details in your pipeline. However, as your business grows, you will need to consider using a CRM system to keep track of all your sales activities.
Without a dedicated CRM, you simply will not be able to manage your sales pipeline properly. In fact, CRM software has become such an integral part of sales that high performing sales teams now rank CRM as their second most important sales tool. Not only will a CRM automate several processes for you, but it will help you track metrics, easily manage a large volume of leads and enable your team to quickly access the right information at the right time.
A sales pipeline can be compared to the beating heart of your business. That is why its importance and value can hardly be overestimated.
This means that if you do not manage your pipeline successfully, then you risk losing out on new customers and your business could suffer. With more than 60% of sales managers saying that their company does a poor job of managing their sales pipeline, chances are you need to improve the way yours works, too.
The 10 best practices we have presented will help you keep your sales pipeline beating at a healthy pace, make your work more organized and structured, shorten and speed up your sales cycles, and reach your sales quota quicker, all the while bringing growth and profit for your business.
Upgrade your recruitment process with pioneering recruitment technology.
Reduce time-to-hire by 58% using our AI smart automation and video pre-screening software, Projectus Edge. Using 54 years of scientific research, benefit from behavioural assessments of long-term performance indicators and company fit against unique benchmarks for each vacancy and the behavioural profiles of your current team. Get a stronger guarantee on the right hire for you and save thousands in recruitment costs with improved staff retention across your business.
Pioneering recruitment technology for world leaders in technology. Makes sense, doesn’t it?