In order to bring more revenue into your business, you need to have more control and visibility in your sales pipeline. You stand more chance in reaching or exceeding your revenue goals if there are more opportunities in your pipeline. Here is a comprehensive guide for sales leaders and executives to grow a healthy pipeline through careful assessment and management.
Sales Pipeline – What is it?
Do not confuse sales pipeline with a sales funnel as the former lays down the steps involved in a buyer’s journey from being a prospect to a consumer. The pipeline provides details of a sales process, sales CRM, and puts down the actions that a sales rep must take at every stage.
All opportunities move from stage to stage of your pipeline depending on your sales actions. Since the sales process of all companies differs from each other, you must ensure that your pipeline is unique and features your buyer’s journey.
The rate that a given opportunity moves through your pipeline will differ and is decided on the basis of their urgency, interest level, and the amount of research they have done amidst other attributes.
Are Sales Pipeline and Sales Forecast the Same?
The two terms are often confused as being the same. However, that is not the case. While a pipeline encompasses all of the opportunities that a sales rep is handling irrespective of how original or new it is, a sales forecast is the approximation of all the opportunities that might close during a given time period.
Pipelines allow the sales team to track their prospects in the sales process and the suitable actions they must take to achieve their target. A forecast, on the other hand, shows the sales team how close or far they are to their goal, thereby helping in preparing accordingly.
Building Sales Pipeline – How to do it?
Here is how you build a pipeline:
- Define each stage of your sales cycle.
• Identify the opportunities that usually move to the next stage.
• Work backward and do your math to know the number of opportunities required at each stage to achieve your revenue target.
• List down the opportunities that convert for each stage and that must include the actions that a salesperson takes (follow-up email or phone call) and also the response (a prospective buyer agreeing to a free demonstration).
• Adapt an existing sales process or create a new one around these figures and actions.
Let us now dive further into specific steps:
Stages in a Sales Pipeline from a Buyers Perspective
Even though copying a template is the fastest way to define the stages in a sales pipeline, developing one of your own on the basis of your prospect’s buying journey is the most effective way to predict revenue and track progress.
Here is the usual sales process from the perspective of your customer:
- The buyer recognizes or becomes aware of their opportunity or pain point.
• Your prospective buyer defines their opportunity, develops evaluation criteria and requirements, and explores possible approaches.
• The next stage is when the buyer has made a decision and is now comparing and exploring vendors and solutions.
Stages in a Sales Pipeline from a Salesman’s Perspective
Here are the stages involved in building a sales pipeline from a salesperson’s perspective:
- A connection is formed when a prospective buyer interacts and engages with you or your company. It can be in the form of an email, webinar or downloaded piece of content from the company website.
• An appointment is set when a customer decides to meet you to learn more about your product or service.
• The appointment can be regarded as completed if the prospect shows up at the meeting, and you have talked about the next steps involved.
• A solution is proposed when the customer expresses interest in buying your product.
• A proposal is sent when the customer reviews your contract.
The stages can increase depending on the length of your sales cycle.
Determining Your Pipeline Size
Start working backward to figure out the exact opportunities required in each stage of your pipeline. Divide your target monthly or quarterly revenue by your average deal size. This will enable you to understand the number of deals needed to win in a month or quarter.
Next, you must divide your target deal number by your yield probability per stage. This process must be repeated for all the stages. Once you get to know the total milestones, go ahead and divide these goals by salesperson.
Each salesperson’s conversion rates will vary by stage. If one of your sales executives seems to struggle to prospect but has an exceptional demo-to-close rate, he or she will need much fewer initial meetings than their counterparts in order to meet their quota.
In the end, it must be said that it is important to master your sales pipeline, sales CRM, and sales funnel in order to master your results. In that way, you will be ready to meet all the challenges that come your way whether it is a huge opportunity, an internal strategic change or a new competitor.