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Do your salespeople really understand your company’s sales process?
Do they follow it to the letter every single time, with every single sale?
What if there was an easy way to track not only the performance of your sales reps but also where each and every current lead lives in your sales process?
You can do it with a sales pipeline.
By the end of this article, you’ll have a clear understanding of what a sales pipeline is, and just how essential of a tool it is to your sales team and the entire business.
Let’s get started!
Sales Pipeline Definition
A sales pipeline allows salespeople to keep track of where leads or prospects are in their company’s sales process. It also gives them a good understanding of their own sales performance, the company’s sales performance, and where improvements can be made.
What is a Sales Pipeline?
A sales pipeline provides a visual representation of a company’s sales process. The word pipeline might bring out pictures of a sewer or an itsy bitsy spider climbing a water spout, but a sales pipeline is more like a roadmap.
When you plan out a road trip, chances are you’re highlighting stops along the way where you’ll take a break to use the restroom or grab a bite to eat. A sales pipeline is similar; it maps out a customer’s journey so that a salesperson can see where their customer is in the sales process, and engage with them accordingly.
That might mean sending an email, SMS, or giving them a call. Sales reps can also use pipelines to figure out whether they are meeting their sales goals.
In other words, with a pipeline sales process, sales reps can easily see where they are in terms of making their sales quotas for a given period, while at the same time keeping track of their assigned leads.
There’s an oft-cited 2015 survey that was conducted by the Harvard Business Review that asked companies to self-evaluate their sales pipeline effectiveness using a scale of 1 to 7, with 1 being not great at all and 7 being excellent. Companies with ineffective pipeline management averaged a score of 4.6, while companies with effective pipeline management showed a growth rate of 5.3, which translates to a 15% increase in growth.
Companies that “mastered” their sales pipeline saw 28% revenue growth. While the article doesn’t state how many companies were surveyed, the numbers given seem promising in terms of dedicating time to sales pipeline management best practices.
But before we get into the nitty-gritty of sales pipeline reporting, strategies, management, and more, it’s important to understand how a sales pipeline matches up with the buyer’s journey or sales funnel.
Sales Pipeline Versus a Sales Funnel
The sales pipeline and sales funnel go hand in hand. While the sales funnel outlines where a customer is in their buying journey, the sales pipeline determines how a salesperson should be engaging with the customer as they move through that buying journey.
Sales Funnel Stages
A basic sales funnel for a B2B purchase snapshot typically includes some form of the following stages:
- Interest or Discovery
- Evaluation or Research
The awareness stage is the top of the funnel stage in the sales funnel and starts when a customer learns about your business. While it might sound simple, the awareness stage is very important, since if a customer doesn’t know about your business, how do you expect them to buy things from you?
Marketing usually takes care of the awareness stage through advertising, Search Engine Optimization (SEO), content, and SMS and/or email campaigns. It’s typically through these efforts that your business appears in front of your customer’s eyes.
The interest or discovery stage is probably the largest stage in the sales funnel. This stage begins when a customer responds to your business’s advertising. A positive customer response could be as simple as them watching your entire video ad on Facebook, or clicking through to your website from search results. Either way, these actions show that a customer has at least discovered and learned about your business, and could also mean that they are interested in learning more about you.
The interest or discovery phase can also hit the middle of the sales funnel and is the stage where the customer is deciding whether they should buy from you or not. For instance, the customer could be visiting your website multiple times throughout the day or week, engaging with your content, and has maybe even had the first conversation with a sales rep.
The evaluation stage begins when a customer is trying to decide whether or not to buy from you. In other words, they might still be researching, but they’ve likely engaged with a sales rep and were maybe even presented with an offer.
The intent, purchase, and loyalty stages are at the end of the sales funnel and usually come relatively seamlessly after the evaluation stage since this is where the customer finally decides whether to buy or not. If they decide to buy, then the salespeople are just responsible for putting through the payment and delivering the product to the customer.
Sales Pipeline Stages
Sales pipeline stages outline how a salesperson should engage with a customer depending on where that customer is in the sales funnel.
A basic sales pipeline usually consists of the following steps:
- Lead generation or prospecting
- Qualifying leads
- Engaging with qualified leads and determining their needs
- Finalizing the sale/negotiation
- Making an offer
- Closing the deal
- Delivering the product
The lead generation or prospecting stage in a sales pipeline is usually handled by the marketing department, although in some situations the salespeople could be finding leads through cold calling or other methods.
Once leads come into the sales pipeline, the qualifying leads stage begins. This is where sales determine how viable leads are based on a set of predetermined criteria. For example, a training manager at a banking company fills out a lead gen form on a website that sells financial eLearning courses. The eLearning website would obviously want to contact this lead as soon as possible as they appear to be a) a decision-maker for their company, and b) they fit the target audience for the eLearning site’s product.
Once the lead is qualified, the salesperson should then meet with the client and determine their needs before making an offer and moving on to the closing stages of the sale.
At the finalizing the sale/negotiation stage, sales reps are getting their hands dirty putting the final touches on the sale. Once that’s done, all that’s left is to close the deal and deliver the product to the customer.
While the basic steps of a sales funnel and sales pipeline and how they work together might seem straightforward, building a sales pipeline specifically for your company is likely going to be more complex.
Building a Sales Pipeline
Think about the steps you take before you decide to buy a product. Lots of the steps might seem automatic or obvious, but when you take the time to break them down one by one, it gives you insight into how a typical customer acts before they make a purchase.
Let’s say you’re driving home from work and see a billboard advertising McDonald’s new spicy chicken nuggets. As you pull into the drive-thru, you see a menu board with pictures of a pumpkin spice latte, so you add that to your order.
Before you move up to the payment window, the McDonald’s employee asks you if you would like anything else. That triggers you to think of your partner waiting at home, so you tell the clerk to double your order.
Once you pay and receive your order, the transaction is done and you drive away.
Unknowingly, you followed a sales funnel and the McDonald’s employee was there to engage with you as needed along the way until you completed your purchase.
So how do you build your own sales pipeline?
It will take some time, but here’s what you need to get started on building your own sales pipeline:
1. A Detailed Sales Process
Your sales process should include all the activities or actions that your salespeople must take as they move a customer from a lead to a sale. Your sales pipeline is a visual representation of this process.
2. Your Lead List
Before you can start selling, you need customers to sell to! When you have a good list of leads, you can start the process of reaching out to them and determining where they fit in your sales process.
3. Revenue Targets
Sales goals and revenue targets are important aspects of your sales pipeline. Otherwise, how would your sales reps know if they are meeting expectations? With a clear view of revenue targets, your sales team can understand where they sit at any given time and what needs to be done to reach your sales goals.
4. Your Sales Team
The number of people on a sales team varies with the type of business and what growth stage they’re in, but even if you have just one salesperson, it’s still worth tracking their performance on your sales pipeline. With more salespeople, your pipeline can help you track and manage who certain leads are being pushed to for the best chance at a sale.
Thankfully, you don’t have to track all this information manually. A CRM like Ringy can help you keep track of incoming leads, assign leads to the right salespeople, and view comprehensive reports on sales performance.
Sales Pipeline Strategies
Now that you have the tools to start building your own sales pipeline, it’s important to consider the strategies behind keeping it effective as a sales tool.
Let’s take a look at some effective sales pipeline strategies to keep you in the game:
1. Regularly Evaluate Your Sales Process
Sure, you might have a rock-solid sales process, but it doesn’t hurt to evaluate your process every once in a while. After all, 77% of B2B customers report that their latest purchase was complex or difficult. By regularly evaluating your sales process, you could find ways to streamline it so customers move through your sales pipeline faster. Look at your current sales process and see if you can find any areas where customers get “stuck” or drop off. Talk with your salespeople and see if there are any common struggles or opinions on improvement, then implement changes as needed.
2. Make Sure Your Data is High Quality
High-quality data is essential for making sure that your sales team can move customers through your sales pipeline as quickly as possible. If there are fragmented, missing, or incorrect data, it creates unnecessary roadblocks that prevent quick sales. To make sure your sales team has all the information they need, make sure lead gen forms ask for enough information (without going overboard) and try to maintain a high standard when customer data is entered into the system manually.
3. Prepare for Every Call
Your salespeople can’t make a client call without knowing anything about them, so make sure they can get the right lead information quickly and easily. A lead dashboard, for instance, is a handy tool that shows lead data like name, company, prior conversations (often with recordings to listen to if necessary), notes, automated messages sent, and more. Ringy’s lead dashboard, as shown in the screenshot below, provides all of this information and more.
4. Use Content to Nurture Leads
You might have heard the phrase “content is king” when it comes to reaching people online, and we’re here to tell you that it really is. Content keeps your business at the front of your customer’s mind and keeps them engaged at every stage in your sales pipeline. Which content is appropriate at each stage of the buying process will have to be determined by your marketing and sales teams. Social media, for example, can provide content at every stage of the sales funnel, from awareness to purchase.
Other content like automated emails and SMS are examples of other key ways that content can be put in front of your customer’s eyes at the exact stage they’re needed. For example, with Ringy, schedule an SMS confirmation to go out as soon as a customer completes their online order. Or send an automatic email if the customer abandons their cart before making a purchase.
5. Nail the Proposal
It would suck to have the customer go through your entire sales pipeline, only to get lost at the most crucial time in the process—the proposal.
Nailing the proposal means showing the customer that you have a complete understanding of their problems and challenges, and that you’ve come up with a solution that can’t be beaten. High-quality customer data and a clear understanding of previous customer and sales rep communications help you create an unbeatable proposal.
6. Negotiate Towards Closing the Sale
Effective sales negotiation is more of a talent and art than a simple set of instructions that will lead you to success every time, but there are some tips you can follow that are sure to help you close the deal.
Here are some negotiation tips:
- Take the time to develop a trusting relationship with your customer
- Demonstrate your understanding of the customer’s pain points
- Provide an effective solution for your customer’s pain points
- Show confidence when expressing your price by showing your solution’s value
Sales Pipeline Management
Managing all of your sales information manually using spreadsheets or word documents often gets convoluted very quickly, especially as a business grows.
The solution is sales pipeline management, which can usually be accomplished with a sales CRM. A sales-focused CRM like Ringy can help you effectively manage your sales pipeline at every stage of the sales process, ensuring that leads continue moving forward and salespeople are busy connecting with customers.
Sales Pipeline Reporting
When it comes to sales pipeline analysis, good sales pipeline reporting software should show you actionable information about your sales pipeline, such as:
- The total number of deals currently in your pipeline
- The average size and value of the potential deals in your sales pipeline
- Number of won sales and an average close ratio
- The average amount of time it takes to close a deal
With this information, you should be able to quickly spot areas of improvement in your sales process, letting you make informed changes easier and faster.
Sales Pipeline Best Practices
When performing a sales pipeline analysis, follow these best practices:
1. Follow Up With Every Lead
Can you imagine filling out a lead gen form on a website and not getting contacted? It’s important to follow up with every interested lead, as you don’t know whether that conversation will result in a sale or not. If you have an effective lead generation form and/or CRM that filters out leads based on your inputted criteria, then your sales team should be contacting every lead that lands in front of them.
2. Identify the Right Leads
Contacting leads is important, but it’s also important to implement systems to create a solid lead qualification process. With the right leads being filtered to your sales team, you can be confident that they will have the best chance of making a sale.
3. Keep Leads Moving Through the Pipeline
It’s easy to forget about leads, especially when you have hundreds or thousands of leads coming through your pipeline on a monthly basis. However, you don’t want good leads to get left in the dark, so making sure that sales reps are regularly following up with existing leads ensures they keep moving through your sales pipeline.
4. Keep the Sales Cycle as Short as Possible
We all know that a typical B2B sales process is long, but that doesn’t mean you shouldn’t take steps to shorten your sales process as much as you can. Shortening doesn’t mean cutting corners or ignoring important steps, it means increasing efficiency, productivity, and sales through streamlining your sales process.
5. Use a Tool to Manage Your Sales Pipeline
A tool like Ringy can help you effectively manage your sales pipeline from start to finish. Keep track of sales rep performance, see where leads are in your pipeline, and ensure you’re doing everything to maximize your sales revenue.
Types of Tools and Software for Better Performing Teams
Building a sales pipeline is more effective when you have the right tools in your toolbox. Here are the tools you’ll need to build and manage an effective sales pipeline:
The first essential tool in your sales pipeline tool kit is a sales CRM. A sales CRM not only gives you the ability to create a visual of your sales process, but it also helps you keep track of existing and incoming leads, the performance of sales reps, marketing campaigns, and more. Marketing automation can also be tracked in a sales CRM like Ringy, making it easy to send automatic messages to your customers at every stage in the sales cycle.
Mobile VoIP is essential if you have a sales team that lives on the phone. Rather than springing for expensive cell phone plans, VoIP software not only saves you money, it reduces the administrative burden on your sales team.
Most Mobile VoIP software comes built into a CRM, like Ringy, and therefore allows salespeople to access customer notes, listen to previous phone calls, and essentially get a bird’s eye view of a customer before they’re contacted. This leads to overall better sales outcomes because the sales reps are able to go into a call armed with information, even if they are on the go.
These days, sales teams can’t get by without sales automation. Administrative tasks that burden salespeople and keep them from spending their time selling are reduced exponentially with sales automation tools. These tools typically hit every aspect of selling, from lead management, sales pipelines, and more.
Summary / Wrap up
Sales pipelines allow you to keep track of where a customer is in your company’s sales process. It’s also a visual of that process, which allows you to see and understand where gaps may occur and changes need to be made.
The sales pipeline works directly with the sales funnel, in that it indicates how a salesperson should engage with a customer as they hit different stages in the buying process. Managing your sales pipeline effectively and using your CRM’s reporting tools to keep track of its efficiency is often the key to growing your business and making more sales.
If you’re ready to experience a CRM that allows you to keep track of your own sales pipeline, request a demo with Ringy today!