The sales pipeline can be visualized as a horizontal bar, a Kanban-style board, a vertical funnel or any way that shows a progression of stages.
What are the benefits of using a sales pipeline?
Using a sales pipeline can significantly boost your sales and improve the quality of your customer interactions.
For example, you optimize your time when you use a monthly planner to keep track of your meetings and engagements. The planner helps ensure you don’t miss any of your obligations and prevents double bookings.
The sales pipeline is a similar concept. By recording your sales reps’ outbound calls, emails, documents sent and any other interactions with potential customers, you know where everyone stands. This way any representative can pick up the deal and take care of the customer, knowing exactly what they’ve experienced so far.
A sales pipeline also:
Ensures your sales funnel remains full by showing you when early stages are empty and lead generation needs a boost.
Shows you where new customers are in the sales process (know when they’ve signed the contract, received an updated quote, emailed customer support, etc.).
Helps you nurture loyal existing customers into brand advocates.
Overall, a well-built sales pipeline helps you create the most profit while delivering maximum value to prospective, new and existing customers.
Like humans, businesses are unique. It makes sense, then, that sales pipelines will all look slightly different.
Some pipelines have three simple steps (lead qualification, contact, conversion). Others will need a lot more detail, including steps like prospecting, quote delivered or webinar sent.
Below, we’ll outline nine stages of an effective sales pipeline. Ultimately, you’ll want to tweak these fundamentals to suit your business.
1. Ideal customer profile creation
This is where you envisage a buyer persona for your dream client. More than just a workshopping exercise, you’ll want to collect as many data points as you can to get the most accurate picture possible of your very real ideal customers.
Collect data on demographics such as:
Social media preferences
Learn their pain points and identify how your business provides a solution. Learn where they spend their time online and how to best contact them.
This is a crucial step before diving into prospecting. Customer research informs your prospecting efforts, so you’re not wasting any time on the wrong leads.
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2. Prospecting and lead generation
Once you’ve identified your target audience, you need to alert these potential customers to your business’s existence.
Work with your marketing team to put your business in front of your ideal customers using promotional strategies, such as targeted ads and public relations.
Use these methods to agitate your target audience’s pain (reminding them why it’s a problem) and let them know you have the solution. Start building brand awareness and trust within your audience base with pinpointed marketing.
3. Qualifying new leads
Spending resources on unqualified leads – those who won’t be receptive to your sales strategy – drains your time, energy and resources. Qualifying new leads is an important stage in the sales pipeline.
Qualifying a lead means getting an idea of how a prospect runs their business and evaluating how open they’ll be to your proposal.
Lead qualification helps narrow your focus and allocate your resources toward potential customers with whom you have the best chance of converting into paying clients.
To do this, many teams will use a framework like BANT. BANT stands for:
Budget (Can the prospect afford the product?)
Authority (Does the prospect have the authority to sign off on this?)
Need (Do they have a need your product solves?)
Timeline (How quickly do they need it?)
BANT is a popular, classic lead qualification system. It is important to note that qualifying leads using a framework like this should always be part of a natural process instead of a box-ticking exercise.
Outreach is when you make initial contact with your qualified lead. It’s where you present yourself to the potential customer, tell them you understand their problem and offer your solution.
Generally, outreach is done via cold calls or emails, LinkedIn or other social media. The goal is to open a discussion and move the lead onto the next stage of the sales process, where you explain your offer in more depth.
During the sales negotiation stage, your job is to convince the lead that you can solve their problem.
You offer your sales proposal and price for products or services. Sometimes, the lead will counter with objections or request a lower price. How you handle this will make or break your sale.
Negotiating is a highly valuable skill in sales, so training and upskilling your salesforce can directly affect your profitability.
6. Close deal
This is where the lead moves from potential client to existing customer, but it’s not the final stage of the sales process. After your lead becomes a customer, you’ll want to continue showing them you value their business.
How you handle your after-sales service will directly affect their satisfaction with your service and any chance you have for referrals, all of which will impact future sales.
Moreover, deals not won are not necessarily lost. You can place these leads into a lead nurturing email sequence that provides value while keeping your brand top of mind in case they later have a change of heart.
Onboarding your new customer is the process of welcoming them and, if you provide a self-service product, helping them use what you’ve sold them.
This stage in the sales pipeline is a great time to tell your new business how glad you are to be serving them. It sets you up to increase profitability by upselling them later on.
Moreover, automation can take this step off of your reps’ hands. It’s easy to set up an email sequence to onboard your customers and keep them happy after the sale.
A current or repeat customer has a 60–70% chance of converting on an upsell (according to Paul Farris’s classic book Marketing Metrics).
This is because a current customer already trusts your business and no longer needs convincing that you can deliver what you promise. Including an upselling stage in your sales pipeline will significantly improve sales and profitability.
Customers might not convert in your first round of negotiations or simply stop communicating with you. Knowing when to get a salesperson to send a follow-up email or phone call is like contacting a qualified lead all over again.
Calculate how many deals you need to add to your pipeline to achieve your key performance indicators, sales goals and revenue goals.
In an ideal world, we’d close every lead. In reality, good conversion rates are between 10–15%, meaning for every ten qualified leads you acquire, you’re doing well if just one becomes a playing client.
Knowing how many deals you win on average, you can easily calculate the number of deals you need in each early stage of the pipeline. We explain more about this in our free Sales Pipeline Course.
Once you calculate these numbers, you’ll know how many deals you need to add to the top of the pipeline to reach your goals.
Step 3. Build stage-to-stage momentum
Once you’ve laid out your pipeline stages, aim to keep your deals on track.
The actions you take at each stage will help you advance leads to the next, such as sending a written proposal or following up at the right time. Set objectives at each stage that inform your salespeople what actions to take and when.
Continually re-evaulate these steps to optimize your sales funnel.
Step 4. Manage your pipeline consistently
Consistency is key to acquiring more customers. A weekly routine for sales pipeline management ensures you remain persistent and sustainable in your sales efforts.
Try these tips to maintain a healthy pipeline:
Have reps make calls together with a team member so they can learn from each other.
Keep an eye on your lead generation and when the pipeline needs topping up.
Always be on the lookout for pipeline optimization opportunities. Seeing regular bottlenecks? Time to optimize.
Use a good CRM or sales management software, such as Pipedrive, to help you close more deals.
Building a sales pipeline brings to light where your potential customer is at any stage of the buying process. It will help you meet your customers where they are in the buying process so you can provide a more personalized experience.
Though it might take some effort to get a sales pipeline up and running from scratch, it will help you build a successful business with reliable cash flow and profitability.
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