If you want to build your sales pipeline and manage it efficiently, here are some tips and advice to do exactly that.
One of the biggest roadblocks to meeting sales revenue goals lies in sales pipeline management. It’s not enough to build the stages of the pipeline and then leave your sales reps to get on with it. In fact, almost two thirds of sales people say that their companies do a bad job of managing their sales pipelines. Some companies believe that the bigger the sales pipeline the better, but this often results in bloat and a lot of time wasted on trying to move unqualified leads through the different stages by any method available.
If you want to close more deals faster, you need to make sure you are managing the sales pipeline so that it’s running in an optimal way for your business and salespeople.
Create a clearly defined sales process
For salespeople to move prospects through the sales pipeline, they need to have a process to follow so they can take the right action at each step, consistently. Having a sales process in place means each salesperson – no matter how long they have been working for your company – has access to a tried and tested set of best practices that give them the best chance of being able to close the deal. Having next best actions for each stage (including criteria such as contact time frame, number of times you should make contact, and which channels to use) will mean your sales staff always follow up, and don’t let leads slip through the cracks. They will also have to spend less time determining what to do next, which improves the efficiency of the sales pipeline management process.
To build a sales process, you need to first observe your highest performing salespeople so you can understand what they are doing that leads to them closing more deals. Then you need to spot patterns so you can apply these practices to generic situations that most salespeople will encounter. Finally, it’s important to remember that you need to be updating this process on a regular basis, taking stock of what is and isn’t working.
Define targets and optimize your pipeline accordingly
How can you successfully manage your sales pipeline if you don’t know what success looks like in terms of numbers? You need to define sales targets in line with your company’s overall KPIs, and from there, determine your ideal pipeline size. That way you’ll know how many opportunities you need in your pipeline to ensure that you can meet (and hopefully exceed) these targets. Make sure you don’t line up too many prospects in your sales pipeline, as that will take up time that could otherwise be spent on higher priority leads.
If you want to be able to do this successfully, you also need to be tracking the performance of your sales pipeline so you know if you’re meeting targets, as well as which parts of your sales pipeline management process you can optimize. Sales pipeline management software can help by automatically collecting more data than you would be able to manually, and centralizing it into one place. Some of the metrics you should track include:
Number of deals in your sales pipeline
Average deal size
Average time it takes to move from one stage of the pipeline to the next
Average time it takes to close a deal (sales velocity)
Average close ratio
With the help of sales pipeline management software’s data visualization functionality, you can make sense of your data to get the necessary insight to not only know when you’re meeting your goals, but also to be continually optimizing the way you manage your pipeline. Continually reviewing and improving the way you manage your sales pipeline –– in the same way you do with your sales process –– helps ensure you have optimized all stages for success. Don’t be scared to experiment with new techniques or processes, but remember to track their success or failure so you know whether to continue.
Know when to prioritize and when to disqualify
All leads are not of equal value. If you want to excel at sales pipeline management, you need to be able to identify which leads to spend most time on, and which ones you should put to the back of the queue. To do this, you (or the marketing department) needs to qualify leads by looking at factors such as where the lead came from, what previous interactions they’ve had with your company, how well they fit into your target audience, and the stage of the pipeline they entered.
Another key skill is in knowing when you should disqualify leads. If they’ve been stuck at one stage for a while, if they keep moving back and forth between stages but never get close to the sale, or if they’ve been in your pipeline for a long time, you need to cut them loose.
To help with this process, sales staff need to have adequate training to acquire the skills to know how and when to prioritize and disqualify leads. This is not happening in many companies today, with 61% of sales reps claiming that they have not been adequately trained in pipeline management.
Enable collaboration between sales and marketing
Being able to properly manage your sales pipeline also depends on having high-quality leads flowing into the pipeline. As lead generation often falls to the marketing department (at least in part), it’s crucial to have smooth collaboration between sales and marketing. To achieve this, the sales team needs to be clear on what it expects from the marketing department, such as
Number of leads (both qualified and unqualified) needed to meet their pipeline size and revenue targets
What process marketing should follow to qualify leads –– what metrics and filters they should have in place
What process marketing should follow to hand over leads.
Sales staff should also share any feedback they’ve received, or best practices they have come across, when interacting with pre-qualified leads. Marketing must also ensure that they fully utilize any contact database or software that the sales team have access to in order to ensure seamless collaboration.
Sales pipeline management is a bit like a vicious circle: the better you become at managing your opportunities and moving them from stage to stage, the more deals you will close at a higher overall value in a faster time frame. This then makes it easier for sales reps to manage their pipeline as they are spending more time focusing on high-value leads, rather than scrambling to make their targets in whatever way they can.
Want to learn more about sales pipeline management?