Sales pipeline is the core of all sales planning and initiatives. It empowers the sales and management team to make data-driven decisions for attracting leads and increasing revenue. Effective sales pipeline management is vital to tracking prospect behavior and influencing their movement in the sales pipeline for closing more deals.
What are sales pipeline and sales pipeline management?
A sales pipeline is the method of tracking the buyer’s journey through different touchpoints. Touchpoints are crucial actions the consumer takes while buying, like finding your product, visiting your website, signing up for trials and newsletters, etc.
Sales pipeline management is the monitoring and optimization of the sales pipeline. It can be an initiative or a combination of processes to ensure the free flow of activities across the pipeline.
What are the benefits of sales pipeline management?
Helps in planning and prioritization of initiatives
Effective sales pipeline management helps you identify the pipeline’s crucial elements like when a lead visits your website, signs up for a trial, or shares the product information with others. It will help you develop and prioritize initiatives accordingly.
Optimization of sales processes
Analyzing the sales pipeline gives you clear insights into what is working and what is not. This can help you re-strategize initiatives and optimize the sales process.
Simplifying the sales cycle
Sales pipeline management will help you identify and prioritize essential activities. This will enable you to arrange and schedule goal-driven initiatives for lead generation and eliminate unnecessary activities.
Six Best Practices for Sales Pipeline Management
Learning how to effectively manage your sales pipeline can improve the results of your sales and marketing efforts. Here are six best practices for effective sales pipeline management.
1. Identify and prioritize the high-potential leads
You will come across hundreds and thousands of leads during the sales cycle. Not all of them will have the intention to buy your product. It would help if you focused on identifying and prioritizing the leads with high potential to convert and discard the ones that show no scope. But how do you identify the best leads? Many CRM tools help you score and rank leads based on the criteria you define.
2. Define your pipeline stages clearly
Each stage or touchpoint of the pipeline should be clearly defined. From product awareness to post-purchase relationships, clarity of each touch point will help the sales team to develop stage-specific initiatives and actions. Typically, a pipeline has seven vital stages: lead generation, qualification, demo or meeting, proposal, negotiation, closing deal, and retention.
3. Identify key performance indicators
Key performance indicators help businesses measure their performance over time for specific objectives. They are quantifiable metrics that measure your sales performance. You can develop your metrics to measure vital components of your sales cycle. For example, targeted new monthly leads, specific trial sign-ups, etc.
4. Track and analyze your data
Tracking vital touchpoints of the sales process and customer behavior is essential for effective sales pipeline management. Most businesses use a CRM to manage and track their data. CRM is a productive tool that hosts information about your customers, prospects, pipelines, and sales performance. Some vital areas that should be tracked are the number of new deals, repeat purchases, number of closed deals, average lead time responses, etc. A solid data and analytics system will eliminate assumptions and make data-driven decisions.
5. Forecast your sales
Sales forecasting estimates future product revenue or sales for a specific period. Many managers don’t see forecasting as a priority which serves as a potential disadvantage. A sales forecast can identify potential opportunities, threats, and roadblocks. It will ensure you are prepared for what is in front of you. All the crucial business activities like hiring, inventory management, payroll, compensation, etc. depend on forecasting. A sales forecast is based on analyzing different data points to estimate future sales performance accurately.
6. Create a formal sales process
If you are closing fewer deals than expected, it may be because of a sluggish sales pipeline and lack of a formal sales process. Developing a formal sales process will guide your employees to perform their work effectively and be accountable. An ideal sales process should have clearly defined procedures for finding and contacting leads, doing follow-ups, dealing with reluctant leads, and closing the deals.
Better sales pipeline management for better conversions
Sales pipeline management can look like an intimidating task, but with good practices, efficient tools, and proper data tracking and analyzing methods, you can easily ensure the free flow of activities in the pipeline. It will also enable you to identify hidden and potential opportunities in the sales pipeline. This way you can develop strategies to work on converting opportunities and increase sales revenue.