A Guide to the Sales Pipeline
The sales pipeline is where it all happens.
According to research by Vantage Point,
72% of sales managers hold sales pipeline review meetings with their sales reps several times per month.
However, 63% of respondents say that their companies do a bad job of managing their sales pipelines,
which shows that there is massive room for improvement!
In today’s digitally-connected world
, sales and marketing teams are now more data-driven than ever before. This means that not only do we have access to a wealth of information to work with, but we’re also far more accountable for it.
What is a Sales Pipeline?
A sales pipeline is an organized, visual way of tracking multiple potential buyers as they progress through different stages in the purchasing process.
Often, pipelines are visualized as a horizontal bar, sometimes as a funnel, divided into the stages of a company’s sales process. Potential buyers are moved from one stage to the next as they move through the sales process: when contact is made, for example, or when a prospect is qualified.
It’s a way of illustrating where prospects are in their journey from lead to (hopefully) customer; with a pipeline, salespeople are able to see exactly where their money, deals and other sales efforts are at all times. It’s a vital tool for salespeople, who are often juggling many sales prospects and deals, and can’t afford to have one slip through the cracks.
It’s also an important tool for sales managers who want more data on how well their sales process is working; because a pipeline tracks a salesperson’s activities, it offers more visibility into which sales activities are giving a company the greatest return.
Why is it Important?
A sales pipeline is vital to any successful salesperson for a number of key reasons.
It organizes the sales process
As a salesperson, organization is critical to success.
You have to juggle a lot of different prospects all at once, and they’re all at different sales pipeline stages
If you do not have your ducks in a row, you will lose sale after sale because you tried to close on a customer who wasn’t ready, or you drive away a potential client with one too many meetings.
It improves your own understanding of sales
A sales pipeline provides you with a complete picture of your situation, and helps you better understand the sales process itself.
You’ll notice trends in how quickly you move prospects from one stage to another, for example. This will help you modify your strategy in subtle but important ways.
It increases your closing efficiency
By seeing clearly how many times your potential client has been contacted and what conversations you’ve had, you have a lot clearer picture of whether it’s time to close, and also what structure your close should take.
For example, if the client mentioned they hoped to have a new solution in place by the beginning of the quarter, that could feature heavily in your follow-up email
as you set up the close.
The Sales Pipeline Process
The stages within your pipeline are similar to stops along your sales process. Clearly defined sales stages help your sales reps know the exact steps to take to close a deal. Each of the sales stages (Prospecting, Qualifying, Demonstrate, Proposal, and Closing) requires maintenance and a customer-centric focus.
Every sales pipeline begins with prospecting or lead generation. Prospecting is when salespeople find potential customers to buy their company’s product or service. Lead generation is when marketing efforts generate interest in products and produces leads for the sales team. Both are key because more targeted leads in your pipeline mean more opportunities to close deals.
Here are a few ways to generate leads and prospects:
- Networking (in-person) – You can find out a lot about a prospect simply by talking to them. You can quickly determine if someone is your ideal customer or if he or she is a potential source of referrals.
- Cold Outreach – Cold outreach activities like cold calling or cold emailing can be effective for contacting prospects you don’t know. You can also reach out to target audience members on social media or group forums.
- Social Selling – This is where salespeople use social media to research, provide value and connect with their ideal customers. The goal is to establish enough rapport to engage the prospect outside of social media.
- Advertising – Business owners and salespeople should generate interest through advertisements. Unlike networking, cold outreach, or social selling, this method should prompt a large number of targeted prospects to contact you or your business.
- Content Marketing – Similar to advertising, content marketing prompts prospects to contact you. Unlike advertising, content marketing involves creating items like e-books or videos that the target audience finds valuable enough to make contact with you.
- Events & Trade Shows – Events and trade shows are great for prospecting because your target audience is in one place, ideally to learn more about a topic closely related to your product or service. You can be a sponsor or attend and aggressively network.
This step—which is all about finding prospects who are the right fit for what you’re selling—is sometimes called Research. Occasionally it comes later in the process, after a rep has made contact with a prospect.
Qualification is an extremely important step, because you don’t want reps wasting their time on leads who can’t or won’t buy your product, or who might be wrong for your product and cause problems down the line. In this step you’ll sort the hot leads from the cold leads.
But how do you know a hot lead from a cold one?
Qualifying your leads may entail independent research, or a conversation with a prospective buyer, which you’ll use to answer the following questions:
- Does your prospect have the budget for your product?
- Can the prospect actually make the decision to purchase, or do they need to convince someone else?
- Do they truly need your product?
- Do they seem ready to buy now?
You’re hoping to get a yes for each of these questions. If you do, that’s a hot lead. So sell, sell, sell!
If you get one or more negative responses, however, that lead might not be a good fit for your product or service—in other words, they’re probably cold.
You’ll need to do a little more work to determine if your leads are truly cold. At this point your reps should hear out the objections of a prospect and overcome those objections where they can. If the objections aren’t surmountable, then yes, that lead is cold. Leads can also go cold if they ghost you.
There’s nothing wrong with cold leads, you just don’t want to keep them in your pipeline. Instead, save their contact information (or move them to another category if you’re using a CRM with multiple pipelines) and move on.
About 20% of your leads are going to provide about 80% of your revenue (according to the Pareto Principle). To get at that 20% more quickly, it may help to quickly run through all of the contacts in your sales pipeline once a week or so. If you find a prospect who has been clogging your pipeline up for longer than your typical sales cycle, put the prospect in a different category, such as a future pipeline or a future callback list.
You can also save some time by automating this process with Ebsta’s cadence feature
directly in your CRM.
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Now that you’ve qualified your leads, it’s time to demonstrate the product or service to the prospect to make sure it resonates with them. It is during this meeting that you set the stage for who you are and what you have to offer. It is also during this meeting that you get to know your prospect, their needs, and pain points better.
Here are some things you can do to prepare for and execute an initial meeting:
- Define the purpose of your meeting – The first thing you want to do is to define the purpose of your meeting. Your initial meeting should be about getting to know your prospect, establishing rapport, and beginning to understand their needs and pain points
- Establish your desired outcome – Articulate what you want to come out of this initial meeting. It could be another more formal meeting or the opportunity to offer a proposal. Whatever you want, articulate it so that you are focused on this outcome.
- Plan how you will move the prospect to next pipeline stage – Your call or meeting plan should also include your plan to move your prospect into the next stage of your pipeline. Note the activities you will engage in to get closer to a closed deal.
- Organize intel from lead qualification – Your meeting should be centered around getting more familiar with your prospect’s needs. Organizing any information you were able to gather from qualifying your prospect will make you more prepared for your initial meeting.
- Prepare agenda topics and questions – Prepare agenda topics and questions in advance and use them to steer conversations and the flow of the meeting.
Now, the moment of truth.
It’s time to send them a detailed proposal laying out what will be offered, at what price, and for how long. With all of the work that you’ve already put in, this is a stage where deals are often won or lost.
When executed properly, proposals not only help close the deal but also make the sale larger than it otherwise would have been.
There are a number of things you should do to maximize your chances that the lead will say, “Where do I sign?”
instead of, “Eh, I need to think about it”:
Use a standard template.
Having a go-to template will save you time and make sure you cover all your bases. As you learn what works and what doesn’t for your business, you can refine your template over time. Customers will also appreciate not having to wait a long time for you to send a proposal over.
Whether this template lives in Google Drive or a formal proposal tool (like PandaDoc
), share it with your team and make sure you’re using it consistently.
Include the right level of detail.
As for writing the proposal itself, you’ll probably be able to use a lot of what’s already in your proposal template.
Still, go through it with a fine-toothed comb before you finalize and send. You want to make sure all the essentials are covered.
- Summary of your prospect’s pain or need
- Proposed solution with all specifications clearly laid out
- Next steps, timeline, etc.
- Terms and conditions
- Frequently asked questions
This should neatly summarize everything you discussed while also clearly proposing what you’re going to do for your almost-customer. They should walk away with all the answers they need to make a decision.
The proposal is out. You’ve done all of the hard work in partnership with the prospect, and gotten to the end of the road.
This stage ends in one of two ways: the prospect becomes a customer (wahoo!), or the prospect makes the decision to hold off for one reason or another.
Regardless of the outcome, there are a few things you should do to close things out.
If you’ve won a sale
, you should follow up with:
- A “Thank You” immediately after the sale closes. A handwritten note would be a nice touch, depending on the depth of the engagement.
- If needed, a simple onboarding or training process to get your new customer up and running successfully.
- A 30-day “Just checking in!” email or call to see how things are going.
Don’t forget about the importance of ongoing support and customer service, as well as future opportunities to provide them with free content (to add value to their solution) and discuss potential add-ons and upgrades.
Managing the Sales Pipeline
A sales pipeline can be compared to the beating heart of your business. That’s why its importance and value can hardly be overestimated.
This means that if you don’t 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.
Carve out a few hours to separate your sales pipeline into the aforementioned categories, determine your target sales figure, and adjust your process to add enough prospects to the pipeline to hit that target.