We’ve all heard the term “sales pipeline.” Considering how often (and vaguely) people talk about it, you could almost be forgiven for saying that it’s just meaningless jargon.
But that is far from the truth. Sales pipelines are not only real, but they’re a vital part of any healthy business’s growth strategy.
What is a sales pipeline?
Let’s start from the beginning. A sales pipeline is nothing more than good organization. It’s a breakdown of the different stages that an individual goes through from coming onto your radar until converting (and after).
The reason it’s referred to as a “pipeline” is because it’s often represented as a horizontal bar, with each of the stages clearly outlined. However, you can also hear it referred to as a “funnel.” They are, in essence, exactly the same thing!
Whether you call it a pipeline or a funnel, the idea is to move leads and prospects from one stage to the next. The benefit is that, by breaking the whole process into component parts, it’s easier to track and automate the process, ultimately converting more customers.
Preparing to build your sales pipeline
As with any venture in sales, before anything—you need information. The more information you have, the better. Specifically, you need in-depth insights on your sales team, existing customers, target audience, and target market
Only then can you begin to build your sales pipeline. Here’s what you need to know.
Even if you haven’t officially built your pipeline yet, your sales team or whoever is taking care of sales must have some sort of a process in place already. Whether it’s well defined or not, it’s still a very good starting point and should be kept in mind when building your pipeline. After all, the process should mirror the pipeline for best results.
Existing customers are like the solutions in the back of your math book. With them, you can work backwards to see how the desired result was achieved. Any information you have on your current customers should be stored in your CRM.
Of course, you also need to have a well defined target audience. This will normally be done during the brand creation phase, and many of the insights should also come from the existing customers.
Finally, you need to be aware of what’s going on in your target market. If you’re looking to stand out from the competition, you need to know what they’re doing. This comes down to knowing what your unique value proposition is and how your price point reflects it.
The makeup of your pipeline
With this basic information at hand, you can now begin thinking about the stages of your pipeline. Don’t get too caught up in the actual number of stages or try to twist your needs to fit some predetermined framework.
The point of a pipeline is to work for you, not the other way around. Everybody has their own opinion on how many stages a pipeline has—and they can range from five to seven stages, or even more.
If you aren’t entirely sure, start with a simple pipeline. You’ll soon discover if you need to further refine and add more stages later on.
Today, we’re going to discuss:
- Follow up
We’ve written before about prospecting and the role it plays in sales. To put it simply, if you want more customers, you need to go out and find them—that’s what prospecting is.
Once you have your leads, you need to figure out if they’re worth your time and energy or not. This is a very important step. Studies show that, while 61% of marketers send all leads directly to sales, only 27% of those leads are actually qualified.
There are quite a few factors that could disqualify your leads and that’s what this stage is all about. You need to know:
- Can they afford it?
- Are they the decision maker?
- Do they need it?
- Do they show interest?
While qualifying can continue after contact, you can initially discover if they have potential or not before even reaching out.
This stage could be broken down into various parts if you wish, moving from first contact with the prospect to building a relationship.
In theory, this part is pretty straightforward—you reach out and see if they’re interested. In practice, it’s more difficult than it once was. It takes a defined approach to be able to do it well.
When everything does go to plan, it should lead to what’s called “nurturing.” Nurturing is when you develop the relationship by addressing concerns and questions at exactly the right moment in the journey. This could be done over the course of a call by simply listening well, or over the course of months with well-timed emails or other messaging.
Above all, nurturing is about building trust. If people don’t trust you, they aren’t going to buy from you.
Once the potential buyer is ready, it’s time to close the deal. This is one of the most delicate parts of the process and it all comes down to how much the buyer trusts you, how much they believe that the product will be useful, and the skill of the sales rep.
Most of your revenue comes from current customers and increasing customer retention by just 5% can increase a company’s profitability by 75 percent. If they’re subscription-based, there’s the recurring revenue stream that’s literally yours to lose (through bad quality or service). This is a matter of meeting minimum expectations. But current customers also represent incredible chances for upselling and cross selling.
The quality of your after-sales service matters and if done well, you will have opportunities to nurture your customers once again, leading to even more sales.
How to create your organization’s pipeline
Now that you have an overview of the different stages of a pipeline, it’s time to put it into practice, step by step.
Step 1: Manage your contacts
Whatever way you do it, you need to have a system in place to manage your contacts. At the very least, you will need a spreadsheet to hold the data. However, you will quickly see the limitations of this.
Not only do you need a place to store your lead lists, divided into sub targets, but you also need to be able to track the progress of each lead along the different stages of the pipeline. Depending on the number of contacts you’re dealing with, this becomes increasingly difficult.
You need to collect the lead lists—which may require tools—pre-qualify them based on certain criteria (and discard those that don’t fit the bill). Then you need to reach out and contact them, likely further qualifying them as you do this and adding lead scores, before entering the nurturing phase. The nurturing could be by call or through automated workflows that make sense given the situation, lengthening the time from contact to conversion in the process. Finally you need to set up calls with as many as possible.
Did you keep up with that? If it’s that difficult to keep track of in theory, imagine doing it in practice.
That’s why you’re going to need a CRM.
Step 2: Begin at the end
Here’s a top tip. If you want a strategy to work, begin with the ideal outcome and work backwards from there. You may think it makes sense to begin by creating lead lists and setting up the other stages as you go along.
This, however, is like driving off road—only a few vehicles will be able to overcome the bumps and reach the destination. The smoother the road you create, the easier it will be for people to convert.
The best way to do this is by breaking each stage down into clearly defined activities. Begin by thinking about the sales call. Create scripts to help your sales reps and develop automated workflows where necessary. The most necessary ones are appointment reminders to cut down on dropouts and follow-up workflows for next steps.
Then think about the nurturing phase. Again, ask yourself, how much of this can be automated? It could be in the form of a welcome email campaign or by developing another sales script for nurturing.
Finally, think about creating the leads lists, using whatever tool you have. With predefined pathways to guide them down, you’ll find the process much smoother.
Step 3: Build out your pipeline
Once you have a viable path that allows someone to seamlessly journey from never knowing you to becoming a customer, it’s time to start refining.
At any point along the sales journey, an individual may find an obstacle and give up or you may be spending too much time on people that never come to anything. Finding these choking points in your pipeline and developing solutions for them is all part of the process.
Step 4: Realize that your work is never done
When it comes to optimizing your pipeline, your work is never over. Not only do you need to ensure that the process is as smooth and seamless as possible, but your team needs to work to keep it that way.
If it’s not kept up to date by team members, the whole system effectively collapses, or at least a lot of potential buyers fall through the cracks. This can take a while, but with patience and active training, you can ensure your pipeline is healthy and brings in an influx of new clients.
The right tools for the job
If you’re thinking about building your pipeline, you’re going to need the right tools for the job. Unless you have a robust platform that allows you to effectively create and track each stage—and your team actively enjoys using—it is impossible to get the results you want.
At Pipeline.so, our end-to-end CRM solution maximizes your sales efforts and has the capability to enhance every aspect of your pipeline, from prospecting to close, and beyond. Get in touch today for more information!