5 Steps for Building and Managing an Effective Sales Pipeline
A well defined Sales pipeline is the center of an effective sales process. When managed correctly, a sales pipeline can give your team useful insights such as forecasted revenue, what parts of your process might be blocking deals from moving forward, and highlight your top sales performers.
Setting up your pipeline will require some time and thought, as well as consistent review. However, it’s worth the time upfront. A Harvard Business Review study showed that when asked about having an effectively managed pipeline, executives who said their pipeline was well managed were consistently reporting increased revenue.
An effective pipeline also requires a comprehensive understanding of your buyer’s journey. You want the different stages of your pipeline to match the interaction you expect to have with your buyer, and the milestones or outcomes you expect through the buying process. When you create pipeline stages to reflect the behaviors and buying process for your customer, as well as the planned interactions your teams will have, it will ensure that your deal information is accurate. Your pipeline will be set up in a way that goes hand in hand with where your prospects, leads, and opportunities are in your buyer’s journey.
These buying stages include:
Awareness– Your buyer is discovering that they have a problem that needs a solution.
Consideration– Your buyer has defined what their problem is. They are actively doing research on options to solve their problem.
Decision Making– Your buyer has done their research and is ready to evaluate options, with an end goal of a purchase.
The tips below will help you set up a pipeline that will empower your sales team to effectively guide prospects and leads to a decision – as well as give your team visibility into the whole process.
- Define Your Sales Pipeline Stages – Your pipeline stages should be defined by the different outcomes or interactions with the buyer that your sales team has throughout the sales cycle. Think about the information about your product or service your buyer will have access to within each stage, what kind of interactions they will have with sales during each of these times.
Things to consider: How many meetings or demos could a buyer have before making a decision? What does your contract process look like? These questions will help uncover consistencies and steps in your sales cycle that will then turn into the stages of your pipeline. Examples of common stage definitions are Discovery Call or Product Demo.
- Establish rules for each stage— A common mistake made by teams is leaving too much room for interpretation. When your team is clear on what needs to happen during each stage in order for a deal to be moved forward, departments will be aligned and the pipeline stage will be accurate. Decide on specific events that trigger stage completion, and allow a deal to move into the next stage. This could include a meeting or demo being held, or a contract being sent.
When you decide what these triggers are for your business, you can build them into your pipeline stages so that reps are clear on what qualifies a deal to continue to move forward down the pipeline.
- Manage your Pipeline like a Pro with a CRM – If you’re ready to re-define your sales stages, it’s going to require time and energy. Finding a CRM that can automate, standardize, and report on the process you worked so hard to set up will set your team up for success. You will be able to report on the progress of each deal at any time and keep your data in one place.
Check out this article by The Balance Small Business to get their take on some of the best CRMs on the market right now. They break it down into categories so you can read up based on what you need the most. Some favorites are HubSpot, Pipedrive, and Salesforce.
- Avoid future headaches with a clear data management plan – Imagine this scenario. You put time and effort into defining your pipeline stages, and found a new CRM or re-worked your current one to store all your sales data. A month goes by, and you’re excited to see all of the progress that’s been made due to your new sales pipeline.
You sit down to start creating some reports, only to find that your expected numbers are completely off, and a lot of data appears to be missing. This happens to many teams who didn’t put much thought into enforcing standardized steps in their sales process.
With an effective pipeline, you should work to define what you need to track on each deal for every stage. This could mean tracking certain data points, or meeting notes, to ensure the data is always captured as deals move through each stage of the pipeline. When done properly, you won’t be wondering what data you’re looking at because you’ll know that your sales team has been following a specific, documented process.
- Get your team fully on-board – Introducing your team to a whole new sales pipeline is an undertaking in itself. They will be learning new stage definitions, potentially a new software, and will have to adjust their workflow so that data entry is accurate and the new pipeline can be effective. Because of this, it’s easy for reps to follow business as usual and not prioritize standardization.
Asking and reminding team members who have proven their old ways to be successful to make changes can even be awkward. But, it’s a crucial step in this process. So how do you get your team on board? First, understand where their resistance is coming from.
HubSpot found that 32% of sales reps spend over an hour on data entry every day. That’s a lot of time spent away from prospecting, emails, and meetings… it’s no wonder many sales teams are reluctant to adopt a new process. It’s okay to leave room to evolve and improve, but over-all you want to get your process right the first time. Involve your team from the beginning. They’re the ones doing the job every day – ask what usually happens during each stage, what objections customers have, and what roadblocks them the most in their day to day. Then make decisions and definitions according to their feedback. For example, your sales team knows how long it usually takes to get a meeting, so you could use their feedback to decide how long a prospect should spend in a ‘Qualify’ stage. Giving your team some skin in the game will alleviate the learning curve when they see the long-term benefits that are waiting on the other side.
Talk to any team who has put time and effort into building out a sales pipeline, and their building blocks will look a lot like the ones listed here. There are so many benefits beyond visibility, clean data, and accurate reporting as highlighted in this post, but those are some of our favorites. If you’ve found yourself needing to restructure your company’s sales pipeline, and want to do so like a Pro – feel free to reach out to us here.