Building a sales pipeline for your business improves income generation by a large margin via the introduction of standard operating procedures and process clarity.
A sales pipeline can give perspective on how many of your leads actually translate to closed deals!
It also gives you insight into your sales process, allowing you to track opportunities, predict revenue, and measure the progress made during a sales cycle.
The sales pipeline is one of the most useful tools to streamline the sales process and increase the closed-won success rate.
If you don’t already have a sales pipeline, now is the time to build one.
In this blog post, I will break down the process of building a sales pipeline into 7 comprehensive steps.
Read through to get all the tips!
What Is A Sales Pipeline?
A sales pipeline is a visual representation of your leads and how they move through the stages in your sales process. It focuses on how sales teams carry out their sales processes, converting leads into closed deals.
The sales process usually starts from the prospecting stage down to closing, where a deal is won or lost.
Sales pipelines differ from business to business. So, understand that what works for one company may not work for yours. That is why it is advisable to tailor unique sales pipelines for your business.
Sales pipeline benefits include the following;
- Track and manage every stage of the sales process more efficiently.
- Update the sales process based on results.
- Sales forecasting based on the sales pipeline conversion rate.
- Close deals and hit sales targets faster.
- Determine the number of leads required to meet sales goals.
- See the performance of the sales team.
- Conduct sales forecasts based on individual sales rep results.
A sales pipeline often gets mixed up with a sales funnel, but they are not the same.
Unlike the funnel that follows a customer-based approach and focuses on the customer’s journey from the leads’ perspective, the sales pipeline models the sales process.
How To Build A Sales Pipeline In 7 Simple Steps
A defined, efficient, and personalized sales pipeline is crucial to achieving your sales goal. You shouldn’t rush into building one without understanding the sales process of your business.
The steps below will offer guidance on how to implement a sales pipeline that suits your business;
Step 1: Identify Your Sales Targets
The first step to building your sales pipeline is identifying your sales target. Sales managers set department goals to provide sales reps with clear objectives and direction. These objectives can be anything from improving sales in a specific market segment, achieving a certain volume of sales, selling a specific solution, or increasing sales in target regions.
As a sales manager, there are targets for every season that you must achieve to help the company progress. Everything usually boils down to the effectiveness and success of your sales pipeline management. You must identify your goals and success metrics to measure your progress.
For instance, there’s a revenue target for a particular period. Before moving your leads from one pipeline stage to another, you must determine how many deals you need to close to meet up with the revenue goals. This will help you know when to stop and focus your energy on converting the generated prospective buyers. It also helps you achieve good sales pipeline management.
With those goals in mind, you can determine the stages to include while creating your sales pipeline and the sales strategies to employ.
Over time, you might have multiple sales pipelines proven to achieve different sales targets.
Step 2: Determine Your Sales Pipeline Stages
The next thing to do after identifying your goals is to define the stages of your pipeline. It is not a one size fits all, so your sales pipeline may differ slightly from another company’s. This is due to the difference in goals, industry type, the success of previous sales cycles, and the proposed sales cycle length.
That is why it is important to identify your goals and research your business’s previous sales cycles. Even if you didn’t previously have a definitive cycle, trace your closed deals to see how you got there. With that knowledge, you can decipher how to structure the stages of your sales pipeline.
In any case, here’s what the average sales cycle length looks like below;
Lead Generation or Prospecting
Prospecting is the starting stage of the sales process, where you find the people who may be interested in what you’re selling. They are called leads and are the stars of the sales stage because the whole process begins with them. Without them, you cannot sell.
It is the work of the sales and marketing teams to generate leads. The sales team is out for quantity and usually generates cold leads by cold emailing, cold calling, and cold campaigning.
Your marketing team, on the other end, generates warm leads by using proven marketing strategies and techniques.
The two groups create buyer personas that fit into your ideal customers and approach people who fit that profile.
However, if your organization has only the sales team, you can divide the cold lead generation and warm lead generation among your sales reps.
Lead Qualification
You made contact with your leads in the first stage because you think they are potential users of your products or services. Now, it is time to figure out if those leads actually want your solution.
At the lead qualification stage, you are expected to evaluate the prospect’s financial capability and willingness to buy from you. Do your research to check the prospect’s funding status, growth signals, and current problems. You can also use a lead-scoring model to assign points to leads based on their actions.
If it is very likely that the prospect will purchase, then you can move them to the qualified leads stage of your sales pipeline.
Ensure you remove the unqualified leads from your pipeline to avoid stagnancy.
Pitching or Sales Presentation
Once you have identified a qualified lead, the next thing is to pitch your product or service to them. Depending on what you are selling you might propose meetings, demos, or discovery calls.
Sometimes, you may not be the one asking for a meeting with qualified potential customers. A lead who needs your service and already recognizes it will ask for a demo or meeting to learn more about your offer.
At this stage, your sales reps will represent your business, digging into the prospect’s pain points, and demonstrate how your product or service provides value to them.
Ensure to use experienced sales reps and other necessary experts at this stage. It is crucial you demonstrate to the prospect you are aware of their business problem and challenges and how the products or services you are providing address their needs better than the competition.
Just one mistake at this stage of the sales pipeline and your promising lead may get cold feet and exit the pipeline.
Negotiation, Proposal, and Quote
If your sales pitch goes well and the prospect is convinced you understand their problem and have a viable solution, they will show interest in buying and inquire more about what you are selling.
This is when the negotiation of price, terms, deliverables, scope of work, and other contract-related items are discussed.
You are expected to submit a proposal, considering the potential buyer’s needs, as discussed in your previous meetings with them. You may have to conduct additional meetings following the proposal submission to review and further negotiate the price, terms, and conditions.
This sales cycle stage may take quite a while since not all potential buyers will agree to the proposal. So, you may have to redraft your proposal and quotes a couple of times based on the discussions following the initial submission.
Closing Deals
The close of a deal is not always positive. So while you may be optimistic about making sales, don’t forget that your prospects may have a last-minute change of mind. There may be other competitors discussing business with them as well, so you don’t want to take anything for granted.
Don’t relax at this stage just because it’s the end of the cycle. It is a significant hurdle to be crossed to ascertain your success. You must employ proven deal-closing techniques to ensure you win the business.
You can;
- Offer one-time discounts..
- Ask questions about the deal
- Send them demos, tutorial videos, and other learning resources.
- Create a sense of urgency and scarcity.
- Communicate consistently to know their stand.
Don’t forget that your sales pipeline may not be exactly the same as the above. Yours could be a short sales cycle length or a long sales cycle. It all depends on what you are offering, your goals, and your tactics.
Step 3: Assign Tasks For The Success of The Sales Pipeline Stages
This step is where you define the sales activities which are crucial for a healthy conversion rate in the entire sales process.
While you already have your stages defined, you still need to formulate strategies to move your leads to the next stage of the sales pipeline. You should be training and delegating this work to the sales team members to ensure they can execute each step and swiftly move deals through the sales pipeline at scale.
Start from the very top of the sales pipeline: How do you generate your deal? What channels will be most effective? Where are your sales prospects located? What methods of communication would be most effective for your sales reps? How many leads do you need to hit the target number of deals? Will you use cold lead generation or warm tactics?
At the lead qualification stage, determine your methods of qualifying leads, whether you will use a sales pipeline software or a scoring model, your budget, and how many sales-qualified leads makes your goal feasible.
For the pitching or presentation stage, determine who handles which potential customers, the meeting channels, and other activities that fit into your tactics.
At the negotiation stage, which may take a while, create plans to keep the prospect in your cycle. For instance, you can make lead nurturing plans tailored to your buyer personas.
At the deal closing stage, you must prepare for situations where a potential customer delays accepting your proposal. Determine what method to use to increase the success rate. Are you going to create a sense of urgency, offer one-time enticing deals, or send helpful resources? All these should be determined beforehand.
Step 4: Identify Your Leads And Put Them In Their Respective Stages
After identifying and delegating the tasks required to move deals through your sales pipeline stages, the next step is to position your leads where they belong. Some of the time new leads don’t start their journey from the lead generation stage. There are instances where a lead can contact you themselves and go straight to the negotiation stage.
As the sales leader or business owner, you can always assign one of your team members or sales reps to indicate the leads’ position in the sales pipeline stages. That way, you can clearly identify the actions to take for them to move on to the next stage.
Step 5: Move Your Leads Through the Sales Pipeline
Once you have your leads positioned, use each stage’s earlier-drafted sales activities to move them forward through the pipeline. This should be straightforward since you have spelled out the activities required for advancing to each stage.
Work with your team, and reach out to your prospects to move them through the journey you have created with your sales pipeline. You can assign sales leaders to oversee the achievement of the set milestones.
You might want to arrange training sessions to enlighten your sales reps on the tactics that you have planned. This takes a guess out of their way and helps them deliver efficiently.
Step 6: Review Your Sales Process And Identify The Methods That Work
Don’t forget that you can always iterate on the sales process as a whole to ensure you are adjusting based on what is working and failing. After implementation, you can monitor the progress, forecast revenue, and change your strategies.
To increase your sales pipeline value, you must review and upgrade it periodically. It helps you to determine the best methods to use, reduce revenue leakage and achieve your goals more quickly.
Have sales pipeline review meetings and refine your sales process by doing the following;
- Identify the methods that are helping you to convert. You should build on those tactics to meet your sales target more efficiently.
- Measure your sales velocity. That is the duration it takes to convert using the methods employed. While a method can work, it may also take a long time and prevent the team from achieving timely conversions.
- Check if the methods work generally or just for certain individuals. Leads have different triggers, so you may have to segment them eventually and use the techniques that suit their personalities, lifestyles, geography, preferences, beliefs, and behaviors.
- Determine which stages have significant falls in lead numbers. Sometimes these stages work but not enough to hit your targets. Identify those stages and fine-tune their activities.
- Measure your average win rate. That helps you determine if a method yields as much as needed for your business to progress.
After analyzing the areas above, you can decide whether to remove, add, or fine-tune some of the stages and tactics on your pipeline. This helps you to keep a healthy sales pipeline, improve efficiency, and hit your targets faster.
Step 7: Test Different Demand Generation And Sales Tactics
Managing a pipeline continues long after creating a sales process that works. Sales is a fluid process, so you have to keep up with the market constantly and employ the tactics that work.
Don’t stop at closing deals, find more efficient ways to achieve your sales goals too! Monitor the changes in the sales pipeline, take feedback from existing customers and new leads, identify the pipeline clogs, and create new tactics.
You may move from the manual management process and test a CRM tool. Who knows, the sales process may be more cost-effective with sales pipeline management software.
So, be flexible and test different sales strategies. While it may take time to find a suitable strategy, your effort will facilitate achieving your desired results.
Don’t Forget- Always Remove stagnant deals!
As a sales manager or business owner, you should know that not all your opportunities will convert. While some will fall off early in the process, others might get stuck at the final stages of the sales pipeline.
Once a deal takes too long to close, it turns into a rotten deal that may never convert as far as your current sales cycle is concerned.
So, monitor your sales pipeline and identify the deals exceeding your sales cycle length. Focus on it and try to reach a verdict. If the deal doesn’t close soon, it’s advisable to clean it up and face other tasks.
Doing this periodically will help you maintain a smooth-moving sales pipeline and allow you to see your goals much clearer.
If you still have hopes for a deal after the end of a sales cycle length, don’t leave it unattended. Simply add it to your new sales pipeline and process it there.
FAQs
What Is The Difference Between A Sales Pipeline And A Sales Funnel?
A sales pipeline focuses on your sales process. It visually represents your potential customers and how they move from one sales stage to another until a deal is closed. It deals with the internal processes of the sales team. One look at the pipeline shows how many leads are on their way to buying from your business.
Similarly, a sales funnel focuses on a buyer’s journey, evolving around the stages a lead goes through before converting. However, the sales funnel represents a broader picture and is built from the lead’s perspective.
What should a sales pipeline include?
A sales pipeline is specific to the business using it. Your sales pipeline should contain the necessary sales processes and stages required to achieve your revenue goals.
The stages of a sales pipeline usually include the following;
- Lead generation
- Lead qualification
- Sales presentation
- Negotiation stage
- Deals closing
Note that- depending on your sales targets and product offerings, you can build yours to be longer or shorter.
How Do I Structure My Sales Pipeline?
You should structure your sales pipeline in a way such that it contributes to achieving your target revenue. It should contain sales activities that will help lead you to the success of your goals.
Here’s a standardized sales process you can use to structure your sales pipeline;
- Identify your current target.
- Define your sales cycle stages.
- Identify your leads and put them in their respective stages.
- Move your leads through the sales pipeline.
- Review your sales process and identify the methods that work.
- Test different demand generation and sales tactics.
What Is The Importance of A Sales Pipeline In My Business?
Creating your own pipeline has many perks for your business. In addition to helping you predict revenue, it does the following;
- Spot problems in your sales process faster.
- Reach your targets faster and more efficiently.
- Improve your sales process using your sales pipeline stats.
- Measure the performance of your sales teams.
- Measure the success at each stage of your sales process.
- Track your sales opportunities.
- Measure the general sales performance.
What Are The Best Sales Pipeline Software?
Sales professionals use CRM software to enjoy more effective and automatic sales pipeline management. If you are considering using one, too, try one of the 7 CRM systems below;
Final Thoughts
Building a sales pipeline that actually works is the key to consistently closing large quantities of deals. If you have been experiencing too many hitches in your sales process and can’t figure it out, it’s time to create a pipeline!
It helps you to see the clogs in your sales process more clearly, helping you achieve your targets more efficiently.
Fortunately, this blog post has all you need to create a sales pipeline tailored to your situation.
So, read through again and start creating!
