The core purpose of your Sales Pipeline is - to help organize and track leads, forecast revenue, and streamline your sales process towards increasing sales production.
In a CRM, the sales pipeline visually represents the sales process. It depicts the stage of the lead in the pipeline and by virtue of that enables presentation of the full status of your leads and business. Therefore, if the end objective is to increase sales production, then building a sales pipeline also translates to building a high converting pipeline.
The steps to building a sales pipeline are given here –
- Identify your ideal buyers
- Follow the stages in the sales process to progress the leads through the sales pipeline
- Capture, review and analyse metrics of the sales pipeline
- Periodically clean the sales pipeline to enhance its potential
Identify your real buyers
Not every lead is a buyer.
Leads need to be qualified to be pursued for moving further down the sales process.
How do you qualify leads? Every business, industry and market segment have their own specifics and nuances. Yet, one of the oldest and effective criteria that provide the larger framework to qualify opportunities, the IBM’s BANT framework stands in good stead.
The BANT criteria for opportunity identification are –
B stands for budget. What is your prospect’s budget for the problem they are trying to solve?
A is for authority. Does the prospect have decision making authority, or is the person only an influencer?
N conveys need. Does the prospect have a need which your product / solution may solve?
T is the timeframe. The timeframe in which the lead would potentially implement the solution or make the purchase.
Your ideal buyers may not qualify on all the parameters above and you may want to roll them back for a future engagement when they may potentially be ready to buy.
You need a system that can support this requirement to have a ready database of potential leads and reminders to re-engage with them in future.
Track your leads
Once your prospect or lead is qualified, the opportunity is ready to move down your sales pipeline to the next process.
As we said in another article covering sales pipeline, there is no standard pipeline for all businesses. Based on your sales process, you would define the set of processes for the pipeline.
This process needs to reflect the buyer’s journey and needs to be customized for your specific business.
As the prospect moves further along in the sales process, the probability of conversion continues to increase.
While the system can give you an indication of the probability of conversion, if it is flexible enough to allow you as a CRM user to override the probability of conversion based on your engagement, it makes it easier to track your cold versus warm versus hot leads and pursue them, park them, or even defer them appropriately.
Sales pipeline metrics
As is said, you cannot control what you cannot measure.
A typical sales pipeline gives you a tremendous number of metrics to capture and track, including but not limited to the following, which can help manage a healthy pipeline.
- Number of leads
- Deals / Leads by Stage
- Cold, warm, and hot leads (to pursue)
- Duration per Stage
- Conversion per Stage
- Deals by Acquisition Channel (Source)
- Pipeline Velocity (average sales price in $ * no. of active opportunities * win rate % / sales cycle in days)
- Win rate i.e., no of deals won / (deal won + deals lost) in a period
- Opportunity Pipeline Multiplier (of revenue target)
- Average time to conversion
- Average time to lose
- Contract Value
- Email Open Rates
- Last Contact/ Communication Tracking
- Monthly Sales Growth
Periodically Clean the Pipeline
Cleaning your pipeline is crucial to maintaining a healthy pipeline.
Periodically the leads in the pipeline can go cold, non-responsive and may not move up a stage for long.
It is important to review leads, the notes and conversation details for each lead. Based on the review, consider either deferring for later revival, or archiving for the longer term.
With only active leads in the pipeline, focus remains on pursuing the right leads and the team stops wasting time on unwinnable prospects or those that may not be turning into customers for other reasons.
Application of all the above steps can generate a healthy and a high converting pipeline resulting in improved sales production and revenue outcomes.