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Managing The Sales Pipeline
What is the “Sales Pipeline”?
Many people talk about it being the visual representation of the process of acquiring, nurturing and converting leads into sales. It is what happens after you generate a lead. And, it is most critical to the success of any business (B2B or B2C) that depends on lead generation to start the sales process. The sales pipeline is the process of walking a prospective buyer through the buying cycle - the process that takes you from initial contact with a prospect all the way through to the actual sale.
Lead generation is only a small part of the battle. You can generate the best leads in the world, but unless your processes for moving them through the buying cycle are correct, you will waste money and other resources. To be successful you need to manage your sales pipeline effectively and efficiently. A broken sales pipeline will lead to missed revenue and profit targets.
How do you determine if your pipeline working effectively and efficiently? The obvious answer is that you’re generating and converting qualified leads into sales and meeting or exceeding your sales and profit objectives, then your pipeline is not broken but may offer opportunities for increasing its effectiveness and efficiency.
Broken Sales Pipeline Indicators
If you’re experiencing any of the following problems, your pipeline is broken:
- Empty sales pipeline – a sales pipeline that is devoid of “live” qualified leads.
- Don’t know the number of real opportunities in your pipeline.
- Every opportunity is treated the same regardless of size of opportunity and then you lose the big opportunities because you were focused on the smaller ones.
- Not generating qualified leads that convert.
- Not converting enough leads through each stage of the buying process.
- Not closing enough sales.
- Don’t know your target market’s buying processes.
- Don’t have the real decision makers involved in the sales process, as a lead.
- Don’t know how many stages you should have in your sales pipeline.
- Don’t know your conversion rates for each stage in the sales cycle.
- Don’t know your sales closing cycle – or the closings are not matching your sales cycle.
- Sales cycle is too long,
- Don’t have an accurate forecasting system, so you don’t know how many leads you need to generate to keep your pipeline full.
- Spending too much on media / channels which are not generating enough qualified leads.
- Still using spreadsheets and documents to store and manage your sales and pipeline data.
- Spending too much time administering your sales pipeline and not enough time actually selling.
- Sales staff leaves and take all the prospect/customer information with them.
Repairing & Optimizing a Broken Sales Pipeline
To repair a broken sales pipeline you will need to do one, many or all of the following depending on how badly broken it is. And, even if you think your pipeline is working, addressing the following areas, issues or problems will significantly improve the performance of your pipeline.
- Analyze your lead generation channels/media to determine what channels are producing the best results or offer the best opportunity for producing better results. Not just lead generation, but actual lead to sales conversion.
- Determine the best source for leads. Which channels and / or promotional activities.
- Evaluate media performance in terms of lead generation and quality. Are the media channels delivering the right types of prospects? Is there a qualitative difference?
- Evaluate your sales lead qualification process.
- Analyze the quality and quantity of leads flowing into your pipeline and determine their real status as leads.
- Determine how many potential customers are there really out there for your product/service? You need to determine if what you’re putting in your pipeline are in fact, valid inquiries, leads – do they qualify as leads based on your business’ definition of what a lead is. Are the leads in your pipeline the real thing or are they junk, good, bad, ugly. Are they labeled correctly as to the stage they are in. Are there leads / inquiries in the pipeline that you are using marketing automation to nurture which ends up being a waste of time and resources.
- Evaluate messages and offers that drive prospects to engage to make sure the messages and offers generating the right type of prospects -- messages and offers that drive qualified buyer prospects.
- Determine how many stages should be in your sales pipeline for your business model and industry.Managing a sales pipeline with more than 7 stages could turn out to be too time consuming. Now, this entirely depends on the length of the sales cycle, in many cases such as government contracts, it might be entirely normal to have well over 7 stages that are necessary to walk the prospect from lead to closing the deal many years down the line.
- Establish your conversion rates for each stage in the buying process in the pipeline, so you can forecast your lead generation requirements and revenues.
- Evaluate leads in your pipeline to make sure you have the decision makers who are involved in the buying process.
- Evaluate the leads in your pipeline to make sure they are tagged appropriately for each buying/sales stage.
- Determine the number of leads you have in your pipeline for each buying/sales stage.
- Evaluate your lead flow plan. This is the plan that details every point of contact and every step in the process of walking the prospective customer through the buying cycle. It details who, what, when and how.
- Validate that leads are being appropriately treated for the buying stage they are in.
- Evaluate and validate your contact strategy,
- Evaluate and validate your lead qualification, prioritization and segmentation processes.
- Evaluate and validate your nurturing strategy.
- Validate you lead qualification and scoring system against what’s in the pipeline.
- Evaluate and determine what your real closing cycle is.
- Determine how many leads you need to generate for a specific period to keep your pipeline full? Most business managers have no idea, certainly most people on the management team don’t know. So, how many leads do you need to be generating on a regular basis to keep your pipeline full, more to the point, full to meet your sales objectives for the next quarter and beyond? Do you know?
- Determine if there are any gaps in your sales pipeline that could be affecting the length of your sales cycle.
- Validate that you have the right tools to manage your pipeline, so you can spend more time selling and less time on administration.
- Evaluate the SFA / CRM / pipeline management application you are using and validate that the solution is appropriate for your business model. The better managed your sales pipeline is, the more likely you will increase your revenue.
Benefits of Repairing & Optimizing the Sales Pipeline
You can expect to see the following benefits from repairing your sales pipeline:
- Improved lead generation from digital and traditional channels.
- Improved qualification and lead scoring practices customized for your business model.
- Optimized lead generation and conversion strategies to fill you sales pipeline.
- Improved conversion rates for each step in the buying/sales process.
- Reduced sales cycle time.
- By optimizing your sales pipeline, you will increase the amount of time your sales staff is actually selling vs. managing the pipeline. In a study of how much time outside sales reps spent actually spent on sales activities, Pace Productivity Inc. found out that an average sales rep spends only about 22% (or 10,8 hours a week) of the time selling and 23% of the time on administrative tasks!
- Increased productivity from your sales team.
- Reduced number of lost opportunities.
- Higher number of closed sales.
- Increased sales.
- Improved management of your sales pipeline.
- And, an improved relationship between sales and marketing - elimination of the marketing sales divide.