Sales Pipeline Management
Are you taking full advantage of all the insights your sales pipeline provides?
If you’re like most businesses, the answer is “probably not.”
Most sales managers understand how their pipeline works and the value it can provide, but when it comes to best practices for managing that pipeline and maximizing its usefulness to convert leads into customers, the majority aren’t as informed as they could be.
That’s okay – because today we’re going to break down how the sales pipeline works and offer up some tips on how to make it run like a finely tuned machine.
What is a Sales Pipeline?
Before we get to that, let’s take a minute to do a refresher course on what a sales pipeline is – just so we’re all on the same page.
Without getting overly complicated, a sales pipeline is a visual representation of where all your various customers are in the purchasing process. It provides information on what deals are happening, where the customer is on the buyer’s journey, how your sales people are doing in terms of hitting their quotas, and can give you a good estimate of revenue.
For a sales manager, a sales pipeline can feel a lot like a lifeline – it’s filled with valuable information that can give you an intimate look at where your numbers are headed.
Is a Sales Pipeline the Same Thing as a Sales Funnel?
If you’ve spent any time in marketing and sales over the past few years, you’ve undoubtedly heard the phrases “sales pipeline” and “sales funnel” tossed around regularly – and often, interchangeably.
But are these two terms talking about the same thing?
A sales funnel is essentially the path your customers travel on the buyer’s journey.
The sales pipeline can tell you where your potential customers are in their buyer’s journey, but it also offers so much more – including pointing out opportunities.
To keep this as simple as possible – because an in-depth discussion of pipelines and funnels is an entirely different article – think of it like this:
The pipeline reflects what the seller does during the sales process, where the funnel focuses primarily on conversion rates from leads to customers.
The key takeaway here? Technically speaking, the sales funnel and sales pipeline are two different things, but the phrases are often used interchangeably. Being aware of the difference can help you in the long run.
How does a Sales Pipeline Differ from a Sales Forecast?
If you were hoping the vocabulary lesson was over, apologies. This is the last one, I promise.
A lot of people not only confuse sales pipelines and sales funnels, they confuse sales pipelines and sales forecasts to0. And like in the previous section, these are really two different things.
Since we know what a pipeline is, let’s briefly discuss the sales forecast and how the two differ.
Where the pipeline gives you an overview of all your leads that are currently active, the forecast is interested in opportunities that are likely to close in a given timeframe.
The pipeline tracks prospects and leads. The forecast provides information about whether or not you’re going to make your quota or how revenue is trending in general.
While the pipeline and funnel are similar and easily mixed up, the forecast is something different entirely.
What is Sales Pipeline Management?
Now that we’ve got the definitions out of the way, we can start talk about how to get even better results out of your sales pipeline.
The key? Sales pipeline management.
You may already be doing some level of management of your sales pipeline, but following these tips and best practices can help you really take control of your sales process. The effort is worth it — a fully functional sales pipeline is all but guaranteed to increase your sales.
Pipeline management is vitally important to ensuring that you’re nurturing your leads through the buyer’s journey in order to help them complete their transactions with your company.
When you have a small number of potential customers in your pipeline, managing how they move through the process is relatively simple – but as your sales pipeline grows it’s vital to stay on top of it to prevent potential clogs.
Managing the pipeline isn’t just knowing who’s on the journey and where they’re located in the process, though – it’s also understanding what’s keeping them stuck at a specific point of the process, how to move them to the next stage more effectively, and gain insight into how to improve experience for your prospects and sales team alike.
How Big Should my Pipeline Be?
Depending on the size of your company, you’ll have wildly different goals when it comes to determining how big your pipeline should be, And obviously, when we say big we’re talking about how many prospects you would want to have in it at one time – not the actual size of the pipeline. We’re funneling customers here, not crude oil.
Knowing how big your pipeline needs to be will help you understand how close you are to meeting your quotas – which is one of the key metrics that a sales pipeline can help you track.
So, how do we determine the perfect size?
The simplest way is to figure out your target revenue amount, then divide that by the average value of your deals. Right off the bat, you now know how many deals you need to make in any given period.
Next, divide the target number of deals by your conversion rate. This can be your overall conversion rate, or you can break it down by funnel stages. That’s entirely up to you. Doing it by stage seems to give you a better result, but both are useful.
This will show you how many leads you need and how many deals should reach completion in a given time period. Is this less than you’d hoped it would be? Then you need to work on expanding your pipeline.
9 Best Practices for Sales Pipeline Management Success
So, how can you improve your sales pipeline’s effectiveness and reap the benefits that come with it? By utilizing these best practices.
1 Metrics, Metrics, Metrics
It feels like there are two kinds of people in the world – those who love data analysis and those who don’t.
The good news is you don’t have to be a metrics junkie or get a degree in analytics to understand how your pipeline is performing. Thanks to advances in sales AI, sales enablement, and sales pipeline CRM software, there are Software as a Service solutions that can help you crunch the data in your pipeline and figure out your next step.
That being said, regularly evaluating your pipeline data is a vital step in managing your pipeline.
There’s a treasure trove of information literally at your fingertips in your pipeline. Everything from how your sales team is performing, where your customers are experiencing pain points, revenue data, sales velocity, and more.
Knowing this information is there is only half the battle, though. If you’re not leveraging sales AI to automatically capture and visualize it, it can be nearly impossible to access and process it for insights. And if you’re not utilizing it to make decisions moving forward, you’re not taking full advantage of all the value your sales pipeline has to offer.
2 Review Your Pipeline Regularly
Your sales pipeline is constantly changing as new customers flow in and out – therefore it’s important that you’re taking all of your data and feedback from your sales team and constantly adjusting things to make it work more efficiently.
Things that worked in the past may not be practical or effective today. Realizing this, and adjusting your pipeline accordingly, can help increase your chances of successfully closing deals.
When you do review your pipeline, remember that everything should be on the table. Evaluate everything – from your first contact to your post sales follow up – and look for any places where things bottleneck or processes can be improved.
Evaluating and improving your pipeline regularly benefits both you and your customers – so make sure you’re constantly on the lookout for ways to improve!
3 Focus on the Little Things
There’s a tendency, especially when things aren’t working well, to focus on making sweeping changes. Resist this urge.
As the old saying goes, the devil is often in the details – and making minor adjustments to your pipeline can have a ripple effect that leads to big shifts.
For example, something as simple as helping your sales team focus their attention on the most qualified leads first is likely to have more of an impact than completely revamping your pipeline.
Keeping it simple – and looking at the individual trees and not the entire forest – can help you keep your pipeline wide open.
The best part? There are software solutions that can help you at each stage of this process.
4 Keep Your Pipeline Tidy
You probably wouldn’t want to live in a filthy house where everything is strewn about – so why would you want your pipeline to become a cluttered mess?
Too often, sales teams take a “file it and forget it” approach to the sales pipeline. They’ll put in valuable information and leads, but rarely does someone go back through to clear the dead brush.
This can really clog things up. You have dead leads taking up space, information that’s no longer relevant, and so on.
A messy pipeline can be a distraction at best – causing your team to spend time looking at old prospects that are no longer viable, affecting your forecasting, and just generally causing chaos.
Going through regularly can alleviate this issue. If you’re not going through and cleaning out your pipeline at regular intervals, you’re not being as efficient as possible.
One caveat here – be judicious when cleaning. If a deal is dead or not likely to happen without Herculean effort, then it’s probably safe to remove it. Don’t be so quick to remove completed sales though – it can be valuable to reach out to customers after they’ve moved through the pipeline to see if you can help them with additional purchases.
5 Make Sure Your Pipeline is Organized
Building off the previous point, it’s a great idea to make sure that your pipeline is organized – and by this we don’t mean you go in and move stuff around.
Instead, you should have an organizational manual that highlights how your pipeline works so all of your sales team is on the same page.
This document can be as detailed or as generalized as you want it to be – but it should detail how you expect your buyers to travel through your sales funnel, what to do when customers are stuck in the pipeline, data on conversion rates at each stage of the pipeline, and so on.
You can either create this yourself or choose a software solution that with complex AI that will help you decide the best next steps with predictive and prescriptive analytics.
No matter what you choose, being organized is a key to sales pipeline management success.
6 Focus on Your Strongest Leads
No, not the leads who lift the most at the gym – the leads with the strongest chance of becoming customers.
When you analyze your pipeline in detail, you’ll probably discover that most deals follow similar patterns. You experience resistance at the same places in the buyer’s journey, deals take roughly the same amount of time investment to complete, and so on.
Realizing this and capitalizing on it should be one of your main focuses as you work to refine your sales pipeline.
When you have multiple leads in the funnel, it makes sense to focus on the highest value ones and the ones closest to closing a deal first.
Don’t neglect your other customers – simply prioritize all your leads. This way, you can clear out customers in your pipeline and achieve better sales velocity, and then you can reassign your team to the next prospects. It’s efficient and effective.
Not focusing on your strongest prospects can lead to missed opportunities as sales team members focus on the wrong customers. No one wants to miss opportunities – so prioritizing can help eliminate this issue.
If you’re managing a larger sales team, or maybe just a really healthy pipeline, this can be really difficult to do manually. Luckily, advances in sales AI and sales management AI have made it possible to analyze, score, and prioritize opportunities without lifting a finger.
7 Follow Up Regularly
One of the biggest issues facing sales teams these days is the sheer amount of contact required to make a sale.
In times past, a sales person would have less than four calls before closing a deal. Today, that number has doubled.
Why, if we’re all busier than ever and we all hate being pitched, do sales require double the calls they did in the past? Because customers have more options for everything than ever before.
Compounding this issue is the fact that most sales professionals give up after two calls. If you do the math, you see that adds up to lost business.
Because of this, it’s important to make sure your team is following up with your sales pipeline leads.
If you’re qualifying your leads and focusing on the strongest ones as we discussed earlier, following up should be a lot easier to accomplish. These prospects are in the deep parts of the pipeline and genuinely interested in your product – your team should be reaching out to them regularly and consistently to keep them moving through your system.
Following up doesn’t have to be difficult. Sales enablement software leveraging AI offer guided selling features that intelligently recommend follow ups and make them easily actionable for your reps.
8 Shorten Your Sales Cycle
In the B2B space, sales cycles have seemingly grown exponentially over the years. In fact, over three-quarters of B2B sales now take over four months to complete. Almost 20% can stretch out to a year!
It’s no surprise this is bad news for sales teams. A long sales cycle offers a ton of opportunities for prospective buyers to back out, and keeps your sales team tied down and not generating maximum income.
So, what’s the solution? Decreasing the time of your sales cycle.
Of course this sounds easier said than done.
That being said, one of the easiest ways to achieve this goal is by tracking how long it’s taking your team to follow up with potential leads.
If your leads are falling off, it could be an issue with your outreach after initial contact. As we mentioned above, it requires more follow-up than ever to complete a sale, and most sales team members aren’t putting in as much effort as necessary here.
So, if you’re taking a week or longer before following up after a conversation with a lead and your metrics show that’s not effective, consider shortening the timeframe. Don’t bury your leads in an avalanche of follow-ups all at once, but shorten the gap between contact and follow-up.
Doing this can help shorten your sales cycle, increase your sales velocity – and keep prospects from languishing in your pipeline for months at a time.
9 Utilize Software to Make Things Easier
There’s a lot involved when it comes to managing your sales pipeline – but the good news is you can make it all much simpler by utilizing one of the many software solutions available on the market.
As we’ve mentioned multiple times throughout this article, sales enablement software is widely available and can help you get the most out of your sales pipeline. With so many options out there, it’s a buyer’s market – you can select a solution that’s perfect for your specific needs without compromising.
And while sales enablement and CRM software comes in all different shapes and sizes, there are some things you should consider before making a decision.
Depending on the size of your pipeline and specific needs, you’ll want a program that offers up robust analytics reporting that can cater your specific requirements at the bare minimum.
Beyond that, it’s great to have features like auto-transcribing technology that will capture full records of all your sales team’s calls and emails. Salespeople waste a lot of time inputting data of this nature, but with the right sales AI software this issue is eliminated as the program will do it for you. Free your salespeople to sell – let technology handle the administrative work.
If you’re doing a lot of content marketing, look for a platform that will help organize your marketing materials so they’re all easily located in one centralized hub. Over 66% of content marketing materials are never used – a good sales enablement system can eliminate that problem.
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Your sales pipeline is one of your company’s most valuable resources. It provides a wealth of information that can help you forecast future revenue, complete sales more efficiently, focus on your best customers, and dozens of other things.
Yet, despite all the value the sales pipeline provides, most companies aren’t managing it as effectively as they could. That’s unfortunate, because it means these companies are missing out on a wide range of opportunities.
It’s even more unfortunate because managing your sales pipeline isn’t difficult. Following the best practices we’ve outlined here will have your pipeline funneling leads from prospect to customer smoothly and efficiently.
And while the initial cleanup of your pipeline might require some additional time and effort, once these best practices are in place, maintenance is much less work. Think of it like cleaning your kitchen. If you put the dishes in the dishwasher after every meal, it’s a lot less work than if you let them pile up in the sink until it’s overflowing.
The same principle applies with your sales pipeline. Investing a little bit of time and effort into applying best practices and maintaining them will pay you back in spades.
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Accent Technologies is the first and only SaaS company to bring together Sales AI and Content Management in a true Revenue Enablement Platform. We provide both sales and marketing with better visibility into the performance of their teams. This drives revenue through intelligent recommendations for complex sales scenarios and provides the data for rich analytics that power better coaching, forecasting, and long-term customer support. Learn more about our solutions or request a live demo to see it in action.