A sales pipeline provides a visual overview of where prospects are in the buying journey. However, a pipeline can only be fully effective when properly managed.
Effective sales pipeline management can lead to a 15% increase in revenue. It is critical to get it right.
What is a sales pipeline?
A sales pipeline is an organized way to visualize and track leads and prospects as they move through the buying journey.
From lead generation to deal won, each stage in the pipeline is clearly defined and mapped out.
Sales pipelines give you an easy-to-digest, real-time overview of your team’s performance. They also help reps (who are often juggling multiple deals) stay organized. By glancing at their pipeline, they can easily see exactly where each deal is and what activity comes next.
Why you need a sales pipeline
If you sell anything, you already have a pipeline, whether you are aware of it or not. Your team most likely follows a similar procedure every time they interact with leads and prospects.
Documenting your sales cycle and processes can help your reps organize new leads that are coming into the funnel and track specific actions.
Detailing such sales activities helps to remove any guesswork and encourages a more structured process at all stages. A pipeline is a way to reflect these activities so that they become trackable.
When to use a CRM
If you are managing more than one personal and need to handle large number of deals, CRM software can help.
CRM, like Maximizer CRM, gives you access to advanced reporting and analytics. It helps your team to collaborate and work collectively to close deals. This ultimately grants you a deeper understanding of your team’s progress towards benchmarks and goals. Along with lots of additional great functionality.
What goes into a sales pipeline?
Your specific pipeline depends on your sales process, so it will vary between businesses. When you are setting up your pipeline, you will want to document the steps your team goes through for each sale.
There are several basic components that make up an effective sales pipeline. Here are some ideas.
The first two columns in the spreadsheet are for the Deal name and the Contact name or names.
The sales stage helps you to easily identify where prospects are in the buying journey.
To avoid confusion, make sure all stages are clear and specific so any reps handling the deal know when to move it along in the pipeline. An example of these stages might be:
- Initial expression of Interest: Potential prospects that would be an ideal fit for your product or service.
- Qualified: Prospects that your reps have contacted.
- Contender: The prospect has shown interest and been sent a proposal.
- Preferred: The terms of the contract have been negotiated.
- Verbal Commitment: They have agreed to the proposal, now they just need to sign on the dotted line.
How much is the deal worth? Hopefully, you will be able to put an exact figure on this. If you do not, use your average deal size as a placeholder.
In sales, a deal is not closed until the prospect has made the purchase. Each sales stage is assigned a probability of closing. The further along a deal is in the sales process, the better the chance they will close. The CRM then auto-fills the probability depending on the stage.
One of the advantages of a well-managed pipeline is the ability to forecast your future sales. Knowing how much revenue you can expect in a quarter enables you to make smart business decisions and focus your attention on the right places.
The forecast for your pipeline is automatically calculated, taking into consideration both the deal size and the probability that the deal will close. This helps you avoid being distracted by massive deals with a low chance of closing, and instead keeps your focus on the highest quality sales opportunities.
Expected close date
For your forecast to be useful, you also need to know when deals are likely to close. It’s important to keep a target date in mind, as this encourages your reps to keep the deal moving.
Who is managing the deal? Tracking who’s handling each deal enables you to measure team performance and ensure deals are properly distributed.
It is important to always know what has to happen next. How can you get the prospect from their current stage to the next one?
The next actions need to be clearly defined, without any ambiguity. Anyone should be able to look at the designated next step and know exactly what is required to progress.
Effectively managing your sales pipeline is a key step to improving your overall sales process and revenue growth. The best part is that it does not have to be complicated.
ProAptivity are an independent CRM solution provider. We focus on the implementation, training, and support of highly customised CRM software solutions. Our CRM software provides the customers with the tools needed to manage their sales pipelines. We help organisations embed sales best practice throughout their organisation.
Contact us today on 028 9099 6388 or via firstname.lastname@example.org. We can help you assess if your business is CRM ready.
Source: Pipedrive CRM