A sales pipeline is a visual representation of your sales process. It helps you track the progress of your sale through the buyer journey. Sales pipelines have marked strategies to guide each step required to move from interest to closing a sale.
It also includes obstacles holding clients from buying. In this article, we evaluate sales pipelines and the critical role they play in the buyer journey. We also give tips to guide you in creating an effective sales pipeline.
How do sales pipelines work?
Sales pipelines follow a distinct structure. Here are the common stages of a sales pipeline:
- Qualification. A sales rep has to approach a potential client to ask important questions like their expectations, authority, and budget to buy soon.
- Meeting. The rep and the potential buyer get together to discuss the best solution for the prospect’s needs.
- Proposal. The rep sends a detailed proposal stating what they can provide and the cost and project timelines.
- Closing. The prospect signs a contract accepting the terms. They become a new customer.
A sales pipeline may include more steps. It differs from one sales team to another. There are tools that sales reps use to create sales pipelines. Other CRMs like Hubspot have sales pipeline tools you can use for your business.
A sales pipeline can be changed directly. Sales reps can adjust the pipeline to add or remove stages. Same way, they can increase their actions. Where a client needs more convincing, a rep can include a sales presentation.
They will present ideas to the prospect for approval. The most common stages of a sales pipeline include prospecting, qualification, discovery calls, sales presentations, negotiation, contract signing, and post-sale activities.
How to measure the quality of a sales pipeline
You can measure a sales pipeline’s quality by determining each prospect’s value. Sales representatives know what each prospect can spend on a product or service. Aggregating the amount can give a clear picture of the maximum possible amount they can make in sales.
Reporting and analysis tools can also play a role in identifying the quality of a sales pipeline. You can start by checking data on KPIs of choice from the pipeline reports. That can determine whether you need tweaks to improve your sales pipeline.
Consider the following aspects to help with the sales pipeline:
- Average sales cycle. How long does it take to make a single sale?
- The conversion rate by pipeline stage
- Average deal size
- Customer Acquisition cost (CAC)
- Customer Lifetime Value (CLV)
- Average conversion time by pipeline stage
How to build a sales pipeline
You can easily build a sales pipeline using a tool of choice. The most important consideration is your sales process. After that, note down the key stages of the entire process and what it takes to move the customer from one stage to the next.
Create your sales pipeline in the sales pipeline tool, and set up reporting. In addition, adjust your pipeline following the reporting metrics.
Here are the key steps to follow:
- Outline your sales process
- Determine important pipeline stages
- Note important activities within each stage
- Create your sales pipeline
- Set up pipeline reporting
- Refine your sales pipeline
Most CRMs offer pipeline sales tools. Some of the best tools like Zoho, Pipedrive, Zendesk, and Monday are easy to work with.
How to maintain a sales pipeline
Managing your sales pipeline involves taking stock of revenue made by sales reps. You can calculate how much money you have coming into your sales pipeline. You can also keep track of deals lost and money lost in each pipeline.
Pipeline tools allow you to adjust your sales pipeline. If it is not looking good, making a few changes can help add value to your pipeline. Working alongside a CRM and proper communication with the team can make sales pipeline management easy.
Make use of pipeline reports and encourage team collaboration. Involving all players helps tweak the pipeline to maximize success. It catches stagnant deals that the sales team can work on and move to a close.
Sales pipeline vs. sales funnel vs. sales flywheel
A sales pipeline is a visual representation of the sales process. It is often a record of activities involved when making sales. A funnel on the other hand is the buying journey in the eyes of the buyer.
A sales flywheel emphasizes building better relationships with clients through engagement and service. The sales pipeline, funnel, and flywheel help the sales teams understand the buyer, and buyer journey and work on client experience.
Conclusion
A sales pipeline is an essential part of the sales process. A good pipeline ensures that you walk leads to eventually closing deals. A successful sales team collaborates to ensure their sales pipeline remains effective.
Create a sales pipeline with CRM and start data collection. Work on your pipeline and make adjustments to fit your business needs.