Sales are the lifeblood of a business. To ensure that the sales process runs smoothly and in sync with your goals, you must have an effective sales pipeline. According to research, 24 % of projected sales are lost without an efficient sales pipeline. However, businesses may change these numbers by enhancing the sales pipeline and establishing it as an essential component of the sales process. So, in this article, we will discuss what a sales pipeline is and how to build an effective one.
Sales pipeline meaning
A sales pipeline is your distinct sales process and depicts the typical buyer’s journey with your product. Each sales process varies from company to company (and sometimes even between products produced by the same firm).
How to build an effective sales pipeline
Identify a list of potential buyers and the various stages of the process
You should begin by collecting a list of your potential customers in your sales funnel and categorizing them according to where they are in the buying process.
For example, as soon as a prospect receives an email from a sales rep offering them a discount, they’ll be in the ‘initiate contact’ stage of your funnel.
For each stage of the sales process, assign certain sales activities
Sales activities are frequently dispersed and may occur at various points along the pipeline. A fast-moving pipeline is vital for certain organizations, but others prefer to focus on a small number of tried-and-tested activities. Assigning sales activities at the outset of each deal gives salespeople a sense of direction. For example, if the first step in your sales pipeline is making contact, what are the sales activities that go along with that?
One task would be to create and send emails. Keeping tabs on email analytics is also an option. Another step in the sales process would be to call the prospect. Sales operations like these necessitate delegating responsibility to different groups.
Set a timeframe for the sales cycle
It’s impossible to predict how long your sales cycle will be based on a single element. It may differ according to the following factors:
- Sales cycle length depends on the level of complexity of your product. This is mainly because several people or teams are involved in helping the prospects understand those complexities and persuading them to buy.
- It takes longer to get a contract done if your product demands modification because of the constant changes in client needs. As a result, it would take a longer time to fulfil those requirements and produce the goods.
- Email marketing and cold calling are two examples of outbound sales, which typically lead to longer sales cycles than inbound prospects, like those generated through a website.
Your typical sales cycle duration can be controlled by fine-tuning your lead sources, product delivery, and sales engagement.
Decide on an ideal pipeline size
On average, how many deals do your salespeople try to close each week? This is critical if you want to meet your yearly income and sales targets. Reverse-engineer the number of deals needed to meet the company’s revenue targets. Many transactions deteriorate over time, so simply pursuing the target is insufficient.
To begin with, you need a lot of agreements for a large number of opportunities to reach the conclusion of the pipeline. Divide quarterly revenue by the average deal size to set monthly or quarterly sales goals for your salespeople.
Remove dead deals from the pipeline
Keep an eye out for ‘dead deals’ (deals that have passed the end of their sales cycle). Prioritize and focus on a contract that has been stalled for an extended period and is taking longer than your normal sales cycle to close.
This method will assist you in getting rid of transactions that are too old and have little chance of converting. Your pipeline will remain fluid if you have an automated CRM that alerts your team when deals are stagnant, and sales actions related to those deals are being done.
Improve deal closure with sales pipeline tracking
When it comes to determining which deals have the best chance of closing, financial data provided by a sales pipeline are critical indicators of success. It allows you to keep tabs on the progress of each member of your sales team in terms of achieving their sales and revenue goals. Once you understand what a sales pipeline is and figure out its benefits, you’ll want to set up one. Realize them now by building a sales pipeline using the steps covered in this article.