The Health of Your Sales Pipeline (and Curing What Ails It)

Healthy Sales Pipeline

A sales pipeline needs a little nourishment, too.

As salespeople constantly fill their pipelines with deals, they should be regularly checking the pulse of those deals to ensure they achieve the healthiest sales results.

“There’s a direct financial correlation between maintaining a healthy pipeline and piling on revenue,” said Mike Ciccolella, founder of Grow Your Sales Pipeline. “A pipeline managed with care is one in which deals move more dependably, close faster and bring more revenue to the company — and the sales team.”

The health of those deals — and therefore the sales funnel itself — is key to the health of the entire business.

But what exactly does a healthy sales pipeline look like?

The well-being of your sales pipeline

There are a few characteristics common to all healthy pipelines.

“A healthy sales pipeline should have the most opportunities at the initial stage of the pipeline and the proper amount of quality prospects in each subsequent stage,” Ciccolella said.

This should include a mix of small, medium and large deals — by your company’s definition of small, medium and large. While it may be intuitive to focus on going after large deals because they bring in more money, it is wiser to have a variety to protect the company should a major deal fall through.

Those are the basic indicators of a healthy pipeline, but to dig deeper, sales managers need to do their own math and decide what a healthy sales pipeline looks like for their specific company.

Are you a commodity play? Are you an enterprise play? What's your conversion rate? What's your close rate?

“You have to know all the numbers,” said Trish Bertuzzi, president of The Bridge Group, Inc. “It's just like when you go to the doctor and they take your blood. They look at [everything] — how your cholesterol is and how your T4 count is, among other things.”

Common pipeline mistakes

Ever read Anna Karenina? Tolstoy starts the book with this line: “All happy families are alike, but every unhappy family is unhappy in its own way.”

Healthy sales funnels are the same:

  1. A solid mix of leads enters the funnel
  2. Deals move through at a steady rate
  3. A (smaller) number of deals are won

But there are many ways a pipeline can go sideways, and they’re all different.

Here are some of the most common pipeline mistakes a sales organization can make:

  • Thinking it’s the marketing department’s job to generate all the sales team’s leads: “Even in the best companies, marketing can give you about 55% of your pipeline,” Bertuzzi said. “If you're just sitting there waiting for the rest to fill up by itself, you're going to miss your number.”

Reps need to be prospecting constantly to get leads into the front end of their pipeline, and they need to take responsibility for that work.

  • The pipeline is invisible to the rest of the company: Can the rest of the people in your organization see what’s going on in your pipeline? If not, you may be missing some opportunities.

“You may be surprised that someone within your company has a good-to-great relationship with someone at the organization you’re courting,” Ciccolella said.

  • Your pipeline is stalled: “An unhealthy pipeline is often stagnant, full of ‘deadbeat’ deals,” said Urmas Purde, co-founder and head of customer experience at Pipedrive. “You know the type: prospects who are too polite to say ‘no’ and brush you off with a ‘call us in a month’ response.”

An optimistic sales rep can get caught in a trap here, thinking the customer is simply taking extra time to mull over the deal, but that’s probably not the case. Purde recommends dropping these prospects from the pipeline completely and getting back in touch with them later.

  • The pipeline is bloated: If the pipeline is overstuffed with deals that are going to fall through, a rep might see all those deals and think the pipeline is solid.

“The problem with that is that it will lure you into thinking that you don't need to add new opportunities to your pipeline,” Purde said. “But you might need to, as two-thirds of your pipeline might be three-month-old deals, which are just stalled for some reason not under your control.”

Getting rid of those extra deals might be hard to do, but ultimately, will light a fire under a complacent rep.

“Seeing that empty pipeline creates that necessary sense of urgency and helps you to understand what actions are actually needed to meet your sales goal,” Purde said.

  • Thinking you have to have a set number of leads in the pipeline: The days of needing to have three or four times your sales quota in a pipeline at all times is over. Each company needs to do the math and decide, based on their particular needs, how many deals should be in the pipeline.

“It has to be very specific to your business and your conversion rates. [Not being specific is] a major mistake people are making,” Bertuzzi said.

  • You have a CRM but not everyone is using it: The best CRM or sales management tool in the world is no good unless everyone on your sales team is using it, which would be a pity since having a good CRM is one of the best ways to monitor the health of a sales pipeline.

By using the data stored in the CRM (and by making sure everyone is updating that information), Ciccolella said that sales managers “can know when and where to take action to enable more sales reps to achieve their goals, have more accurate sales forecasts, and drive healthy pipelines.”

Discover the health of sales pipelines throughout the world in our Global Sales Performance Review.