When you're selling a product or service, it's important to have a plan. This is where the sales pipeline comes in. The sales pipeline is a visual representation of the steps that need to be taken in order for a sale to be made.It can seem daunting, but with the right tools and strategies, you can maximize different stages of a sales pipeline and close more sales!It may be difficult for any sales team to understand what works and what doesn't during the sales process.However, a strong grasp of your most — and least — successful activities is an important part of predicting income and hitting objectives.A sales pipeline is a vital tool for organizations to get a clear picture of progress and better manage performance.We'll go deep into what a sales pipeline is, how it's useful, and how to construct one that will make a significant difference.[toc]
What is the definition of a sales pipeline?
A sales pipeline is a good way to depict clients as they go through the buying process.It's a highly organized approach for tracking and managing sales activities, including information about each prospect, contract, and money spent.Sales processes are critical to gaining important insights that lead to efficiency, efficacy, and, eventually, profit.Furthermore, since salespeople have a lot on their plates now—such as prospecting, interacting with clients, producing reports, and closing deals—they require immediate access to specific details about buyer progress.If you don't use pipeline software in your sales management operation, you risk significant data going unrecorded.We can't talk about what a sales pipeline is without defining what it isn't, especially because it's frequently confused with other sales words.
A sales pipeline is not the same as a sales funnel
Despite the fact that the two are quite alike and related, it's vital to remember each has its own set of characteristics. A sales funnel revolves around leads, takes place from the prospect's perspective, and displays conversion rates at each stage of the sales process.The funnel, in essence, is a broad representation of the entire lead qualification procedure.Many sales leads enter the wide top of the funnel and few make it to the bottom as genuine consumers.The goal of a sales pipeline is to show which sales activities must be completed in order to meet quota or revenue targets, whereas the aim of a sales funnel is to demonstrate which transactions are required in order to maximize profits.The act of organizing your sales process into a workflow is intended to show how revenue possibilities are generated and distributed across various phases during the sales lifecycle.
The Stages of the Sales Pipeline
You must first understand the stages that a sales pipeline comprises in order to profit from its transparency and operational efficiency. It's crucial to remember that your company's industry and business model may impact the actual phases.We'll look at some typical phases that are commonly found in a sales pipeline in this section:
Customers must first discover that your product and service exist before they can purchase it to address their pain points. In this phase, sellers find and contact potential leads who match the ideal buyer profile.Sending outbound emails, cold calling, using LinkedIn to contact people, and other promotional activities are all examples of prospecting. If your company uses inbound marketing to create leads, this phase is sometimes referred to as "lead generation."Whatever you want to call it, this period is crucial, with 82 percent of purchasers saying they're prepared to meet sellers who reach out proactively.And since a firm loses a percentage of its customers each year through natural attrition, your staff can't afford to overlook the value of attracting potential consumers that they may convert into buyers.Remember that increasing the number of clients lowers your risk of lost sales, so establishing a solid prospecting approach will work to your advantage.
Stages Of A Sales Pipeline
Not all potential customers are viable. Even if they match your target buyer's description, it does not necessarily imply that they will proceed through the sales process.In reality, while 61% of B2B marketers send all direct leads to sales, only 21% of those leads will be viable.Reps who don't follow a certain set of criteria risk wasting time on leads that won't—or can't—ever buy your product or service.Worse, they may end up buying a solution that doesn't address their problems, resulting in attrition and customer support difficulties in the long term.Because qualification is critical to differentiate between hot and cold leads, make sure your pipeline includes a research strategy that addresses these questions for each prospect:
- Is the prospect willing and able to pay for your product or service?
- Is your solution able to solve the prospect's most pressing problem?
- Is your prospect trusted to make purchasing decisions regarding your goods or service, or do they need buy-in from other parties?
- Is the buyer prepared to make a purchase right now?
Salespeople can help prospects determine whether or not they are qualified by providing them with useful information (and understanding if they're interested in learning more). Salespeople may benefit from a solid plan for confronting objections, which can help warm up those initially chilly leads.
The first stage of the pipeline, known as the qualification funnel, is rather straightforward: when a rep recognizes that a lead is qualified, they can interact with them directly.74 percent of buyers want to hear from sellers when they're looking for a solution to their problem. Salespeople may outperform the competition by contacting qualified prospects with a customized message and guiding leads in the correct direction.It's critical that salespeople first research buyer concerns and develop a strong argument for how your goods or service addresses those problems, then reach out to the lead when it's still fresh.
4. Relationship Building
Stages Of A Sales Pipeline
Strong customer relationships are critical for closing more deals and completing them faster. Customers with strong connections (as a result of a client-centric approach) may be able to sell 4 to 8% more than competitors who don't invest in close contact with clients.Because developing rapport and enhancing trust isn't a one-and-done type of activity, this stage should ideally span the remainder of the pipeline's stages.Reps may develop strong relationships through expert content production, sharing their company's mission, customizing each interaction, and collecting and addressing feedback in order to enhance conversions.
5. Meeting, Demo, Sales Call
Once a rep has built a connection with a prospect, it's time to actually schedule a meeting. When sellers present (and frequently demonstrate) your product or service in an attempt to validate its worth to the prospect, this is where they do it.According to a study by research firm Gartner, just under 60% of sales meetings are unhelpful. That's a huge (and scary) number, but there are certain best practices reps may follow to guarantee success at this stage in the process.Making a positive first impression and influencing buyer choices for the better requires:
- Focusing on the specific value that your goods or service provides to the buyer
- Working with the buyer to create a collaborative action plan (MAP) that incorporates their input
- Educating the buyer with fresh viewpoints and concepts
- Recognizing the distinct obstacles in a buyer's market or sector
It may be time-consuming and stressful for busy executives and salespeople to run successful negotiations. They must frequently spend the entire meeting writing down accurate notes, which is distracting, error-prone, and difficult.Virtual assistant technologies are utilized by modern sales organizations to enhance their meetings without sacrificing rep productivity.Salespeople may use these technologies to gather conversation intelligence, real-time coaching, live transcription and notes, and actionable data so they can focus on the customer during meetings (and yet have accurate notes for follow-up).
6. Deal Closing
A deal does not just end when two people shake hands and agree to terms. You must first submit a comprehensive proposal that details how your product or service will meet the buyer's requirements, how the value of your services justifies their price, and how your firm provides a unique edge over competing vendors.The buyer might then negotiate these conditions—and perhaps many more times—until you and he/she reach an agreement on the work scope, cost, and managing expectations.This may be a time-consuming component of the sales funnel because both parties must be prepared to compromise until they find a mutually beneficial deal.When it comes to closing sales, the number one challenge that 48% of salespeople confront is competing against cheaper rivals.It's critical that your representatives know how to negotiate effectively without crumbling, so this training will serve as an effective guide for them.After these tasks are completed, it's time to sign the contract (at long last!). Some enterprises simply execute a transaction at this point, while others require signing a contract.
Build and Optimize a Sales Pipeline for Success
A sales pipeline is important for gaining insight into your operations and increasing productivity, efficiency, and company results.You risk losing out on key insights if you don't have the right tools for building, managing, and modifying your pipeline (based on accurate, real-time data).Alore CRM offers sophisticated pipeline management tools that assist you to work and managing your opportunities, as well as bringing insight to sales engagement.Learn how AI and machine learning are used in Alore CRM to help you improve pipeline health and generate reliable predictions, or try out a demo today.