Sales is the backbone of any business. The more the sales, the more the revenue. However, the key to increasing your sales is in knowing how to manage your sales pipeline.
72% of sales managers hold sales pipeline reviews with their sales representatives several times a month. However, 61% of respondents say they have not been adequately trained in sales pipeline management.
Fortunately, with the right tools and a little guidance, you can make pipeline management easy for every sales professional. In this article, we will discuss what a sales pipeline is and the ten best ways to manage your sales pipeline. Let’s get started.
What is a Sales Pipeline?
A sales pipeline is a visual representation of different stages of the sales processes. A sales pipeline is divided into four stages: lead generation, lead qualification, creating opportunities, and deal closing.
On the other hand, sales pipeline management refers to tracking and managing every opportunity through different sales cycle stages. It also helps determine how many leads you need to convert.
For instance, if you have a pipeline worth $100,000 in contract value and your conversion rate (from lead to sale) is 20%, then you can expect $20,000 worth of new business.
So, if your sales target is $60,000, you will need to convert (and acquire) thrice as many leads.
Having said that, let’s take a look at different ways to manage your sales pipeline and get the most out of your efforts.
How to Manage Your Sales Pipeline?
We’ve put together ten best practices to make it easier for you to manage your sales pipeline.
1- Determine How Your Pipeline Is Performing
The first step to managing your sales pipeline is determining how good your current processes are. Analyze key sales metrics, such as:
- The number of deals: It is essential to know how many qualified leads are there in your pipeline and what stages they are in. This shows how effective your sales processes are.
- Value of deals: The total value of all the deals in your pipeline provides you insight into your potential revenue and whether you are on track to meet your targets.
- Average deal size: Dividing the total value of your deals with the number of deals gives you the average deal size. You can then use this to determine how many deals you need to close to meet your sales targets.
- Average close rate: Dividing the number of deals closed by the total number of leads in the pipeline gives the average close rate. You can use this number to estimate monthly, quarterly, and annual income.
- Sales velocity: Also known as the sales cycle length, it helps determine how long it takes, on average, to convert a qualified lead into a customer. You can then use this to identify areas of improvement in your sales processes.
Ensure that you analyze these sales metrics for all your sales representatives to understand their performances and identify growth areas.
2- Track Performance Over Time
The next step is to track sales metrics over time. This helps improve your sales pipeline’s health and determine if the changes you make to your processes contribute to overall growth.
Tracking sales pipeline performance over time also helps you recognize when a metric is going off-track, enabling you to take measures to fix it. Another benefit of tracking performance is that it helps identify and jumpstart deals that have been stuck at one stage of the pipeline for longer than usual.
3- Review and Improve Your Sales Pipeline
When it comes to sales, there is always something to improve. Whether you use business phone systems or emails to reach out to potential customers, make sure your approach is finely-tuned and personalized to increase the efficiency and conversion rate.
One of the key benefits of reviewing your sales pipeline is that it helps determine bottlenecks or blockages in your pipeline. You can then create strategies to improve each part of the process.
For example, if you struggle to move leads from one stage of the pipeline to another or take too much time to do it, it’s high time to understand the reasons behind it. This will allow you to create new processes to resolve the problem.
4- Ensure Your Agents Follow a Standardized Sales Process
In sales, it is easy to get distracted from the planned (or documented) approach. Besides, many agents follow their own custom approach to close a deal.
While it is true that each customer is unique and has different requirements, if you really think about it, your prospects have a lot of things in common.
In fact, their underlying needs and reasons for buying your product are almost the same. Therefore, create and ensure that your agents follow a standardized sales process. Also, make sure that your representatives always use a business phone number when contacting a prospect.
For instance, you can create different steps (as shown in the image below) to ensure all your agents follow a single process.
Unlike custom sales techniques that add unnecessary burden (in terms of time, efforts, and money), a standardized, repetitive sales process can be fine-tuned to perfection over time.
5- Learn To Identify Good Leads and Let Go of the Dead Ones
Not every lead in your pipeline will convert. And, given the time it takes to close a deal, you might not want your agents to waste time on the dead leads.
A lead is considered dead when they clearly say they are not interested, cannot be contacted, or are not moving down the sales pipeline despite your best efforts.
Over time, you will notice certain patterns of good leads (the ones that convert quickly and easily). Make a note of those patterns to identify good leads and prioritize your time on them.
6- Shorten Your Sales Cycle
Now that you have identified good leads, it’s time to shorten your sales cycle. 75% of B2B sales take more than 4 months to close, with 46% taking over 7 months.
And a long sales cycle can hurt your agent’s effectiveness. In fact, 27% of sales representatives say that a long sales cycle is one of the biggest barriers to sales effectiveness.
Here are some ways to shorten your sales cycle:
- Align your sales pipeline with your customer journey. For instance, if a customer is in the first stage of your pipeline, focus solely on moving them to the next stage rather than trying to convert them instantly.
- Take time to understand the prospect’s pain points and highlight how your product can solve each of them.
- Book the next call at the end of each call. Also, make sure to use a virtual phone number so the agent can connect with the prospect even when they are not in the office.
- Help your sales representatives identify objections early and often.
- Leverage social proof to build trust with potential customers.
7- Leverage Content Marketing To Move Leads Down the Pipeline
Content marketing is yet another great tactic to shorten the sales cycle. Content provides prospects in-depth information about your product and makes it easier for them to decide whether it is right for them.
Think about different types of content that you can provide to your prospects at each stage of the sales pipeline.
For example, you can share blogs, articles, how-to guides, FAQs, and infographics for the top of the funnel stage.
You can share ebooks, case studies, white papers, and video tutorials for the middle stage of the funnel.
For the bottom of the funnel, give free trials, discounts, and customer success stories.
8- Update Your Pipeline Regularly
Your sales pipeline is constantly changing. New leads are being added, existing ones are moving from one stage to another, and deals are being closed.
If you don’t update your pipeline to reflect these changes, it can get a little disorganized, resulting in lost sales.
You could also consider adding regular notes and information for each lead in the sales pipeline.
Though it is a tedious task, it can help keep your sales pipeline organized and make your sales agents more effective.
9- Don’t Forget to Follow Up
Did you know ten years ago, it took only 3.68 calls, on average, to close a deal. Today it takes more than 8 calls.
That’s because today’s customers have more choices than ever. This means they need more help choosing the right product for their business.
However, many sales agents give up after 2-3 calls. So make sure you always follow up. You can set reminders that notify you each time you need to follow up with a prospect.
10- Leverage CRM to Save Time
Using CRM to manage your sales pipeline will save a lot of time in the long run. It will also eliminate the need to sift through papers or tools to find the necessary information.
You can receive timely reminders on the next thing (or the next prospect) you need to do. This way, you won’t have to remember everything and can focus on the task at hand.
Another benefit of using a CRM to manage your sales pipeline is that you can share lead information with the rest of your team easily. This will enable you to convert leads faster.
A sales pipeline defines how effective your current sales processes are and whether you are on track to meeting your targets. The 10 best practices mentioned above will help you keep your sales pipeline healthy, make your processes organized and structured, and increase your sales.
Do you follow any strategy to manage your sales pipeline? We would love to know about it. Please let us know in the comments.