Definition: ‘The sales pipeline represents your sales process consisting of all the sales steps you need to take in order to sell your product to your customer.’
A sales pipeline can become complicated because of the many sales steps involved, the varying needs of a prospect, timelines and the ever-changing probability of closing.
Chances are that you’re already using a sales pipeline to guide your contacts through to a sale. As your contact progresses through the sales pipeline they require more attention as they are progressing from simply being a contact to an opportunity and then, hopefully, onto a sale.
Having too many stages in your sales pipeline is counter-productive as it’s time-consuming, difficult to manage and opportunities can be missed.
Too few, though, and the sales cycle is overly fast and feels too urgent, giving salespeople their ‘pushy’ stereotype (which nobody wants!).
Based on this, the optimum number of steps in your sales pipeline should be 5 or 6.
A 6 step sales pipeline usually includes the following:
The main reason you should care about your pipeline is that doing so will see you take more money home in your pay packet.
It’s that simple.
The best way to make the most of your sales pipeline is to score each step. It doesn’t take long but can make it incredibly easy to manage your sales opportunities.
Each step in your sales pipeline will be weighted differently. This usually consists of a value or the probability of closing the prospect into a paying customer. A scored sales pipeline gives you an excellent indication into what your sales performance will be for the current month and the next and where you should spend the majority of your time.
On average a prospect who is sent a proposal will be 60% likely to become a customer. If yours is lower, then maybe you need to overhaul your follow-up procedure.
A typical sales pipeline will look like this:
Once a contact enters your sales pipeline, they become an opportunity.
As a general rule of thumb, you should have 3 times more active opportunities in your sales pipeline than your actual sales target.
But for an opportunity to successfully progress through your sales pipeline you’ll first have to complete a set of actions at each stage. This could be follow-up calls, sharing marketing collateral or delivering a product demonstration.
It’s also important to not just focus on the end of your sales pipeline. Yes, this will help you hit this month’s quota, but what about next month or the month after that?
Sales guru S. Anthony Iannarino states, “It’s an enormous mistake to stop prospecting because your pipeline is healthy right now.”
To keep your sales consistent, you need to focus some of your time at the start of your sales pipeline to ensure a steady flow of opportunities are entering it.
A sales pipeline will constantly shift with conversion rates fluctuating, differing prospects and even outside influences such as the marketplace or time of the year. So whether you’re new to sales or a seasoned veteran, sticking to the tips listed above can help you build a successful pipeline.