“Sales pipeline” is a term that gets thrown around a lot – but for good reason. While this phrase can feel overused, it’s actually a sales technique that is underused by many businesses.
According to a study by Vantage Point Performance and the Sales Management Association, companies with a formal sales process experience an 18% revenue lift.
Before we dive into ways to establish and manage a formal sales pipeline, let’s start with the bread and butter…
A sales pipeline is a visual snapshot of the entire sales process – from initial contact with a potential customer to the final closing of a sale. Consider it a window into your future deals. Not having one in place is like the sales equivalent of flying blind.
The primary goals of sales pipeline management are to effectively:
By actively monitoring and managing the pipeline, sales teams can prioritize leads, allocate resources efficiently and take time-sensitive actions to maximize conversion rates and generate revenue.
The key stages typically include:
The sales pipeline is a pretty chronological concept on a lead-by-lead basis, however, something that needs to be paddling away underneath the surface is thorough record keeping.
Make sure to track and manage each lead’s progress – updating their status in the pipeline as they move from one stage to the next. Customer relationship management (CRM) software will make this 1,000 times easier. Fail to do this, and you could risk going from a hot lead to a hot mess.
This is where the number crunching comes in. Calculators at the ready…
The calculations below provide insights into the health and performance of your sales pipeline, helping to quickly identify strengths, flag weaknesses, and highlight areas for improvement. Armed with these insights, resources can be allocated more effectively, helping to improve sales and generally give your sales team a well-deserved confidence boost.
Conversion rates. Calculate the percentage of leads that successfully progress from one stage to the next. For example, the conversion rate from lead qualification to solution presentation can be calculated as:
Number of leads qualified ÷ number of leads initially generated × 100
Sales velocity. Determine the speed at which leads move through the pipeline and how quickly deals are closed. It’s calculated by:
Average deal value × win rate × sales cycle length = sales velocity
Pipeline value. The total potential revenue represented by the leads in the pipeline. It is calculated by summing the value of all the deals at each stage of the pipeline. This calculation helps in forecasting and estimating future revenue.
Time in stage. This is the average time it takes for leads to progress through each stage of the pipeline. It helps identify bottlenecks or stages where leads are getting stuck, allowing sales teams to take corrective actions. It can be calculated by:
Total time spent in a particular stage ÷ the number of leads that have moved out of that stage = time in stage
Win rate. The percentage of leads that convert into closed deals. It’s determined by:
The number of closed deals ÷ by the total number of leads that reached the closing stage × 100
Sales forecasting. Predict future revenue based on the current state of the pipeline. It considers factors such as the value of deals at each stage, conversion rates, and historical data. Sales teams can then estimate potential revenue and make informed decisions. (A sales team’s crystal ball approach, as it were.)
There is! A sales pipeline and funnel both describe the flow of prospects through a sale but don’t mean the same thing. They refer to different aspects of the sales process.
The sales pipeline focuses on the internal process of managing and progressing deals through different stages, while the sales funnel focuses on the external process of attracting and converting potential customers. The pipeline is more specific to a company’s sales process, while the funnel is a broader concept that encompasses sales and marketing activities.
Is there a difference between business-to-business (B2B) and business-to-consumer (B2C) sales cycle lengths?
Yes! B2B sales cycles tend to be longer. Here are some general factors that contribute to this:
If you don’t build and manage a strong sales pipeline effectively, your revenue growth is going to slow to a halt.
The last thing you want to feel like you’re doing is wading through treacle with a blindfold on. Keeping your sales pipeline clean is essential for maintaining an organized and swift sales process. You can do this by:
Continually training and supporting your sales team. We’ve said it once and we’ll say it again! By having a well-trained team that feels supported, you can ensure they follow the best practices for pipeline management to keep it clean, while remaining motivated to close sales!
(This is our favorite list out of the lot:)
Pretty much a sales team’s wish list, right?
You can imagine there’s some nifty technology out there that makes the whole pipeline management process much easier (and less daunting). Sales pipeline software provides a centralized basecamp for sales teams to track, monitor and analyze sales activities and opportunities – from entering and managing lead information, pipeline visualization, status updates, setting reminders, scheduling tasks, generating metric reports… you get the drift!
Sales pipeline software often integrates with other systems, such as CRM platforms, email software, and marketing automation tools. Sales data flows seamlessly from one platform to the other, helping with automation, lead capture, data syncing, and activity tracking tasks.
This technology also makes it easier to forecast future revenue and set sales targets based on the data and trends in the pipeline. Not only can goal progress be monitored, but strategies can be adjusted according to results. It’s a much more agile way of working – you can nip any issues in the bud while doing more of what’s working.
This is why Turtl technology includes an Analytics dashboard – to show sales professionals the pieces of content in the sales pipeline that are getting the best engagement. With real-time editing, teams can make sales content go further across various stages of the pipeline, such as the solution presentation.
This also means you get immediate intelligence that will hook better-quality leads in future. If you monitor the content journeys of leads that are closing, you can see which content caught their interest and feed this into your next lead magnet.
Find out how to score leads and see how we do it at Turtl.
Grab our advice and start creating lead magnets that convert (these learnings feed straight back into your lead gen machine).
Jason Jordan – a thought leader in B2B selling and partner at a sales management training and development firm – Vantage Point Performance – authored a study in partnership with the Sales Management Association and turned its findings into an ebook: 3 Secrets of Successful Pipeline Management. In the study, they learned that there are three essential pipeline best practices that companies can use to increase their revenue streams:
“Every company has a different system for managing open opportunities. They use different stages, require a different number of touches from sales reps, and enforce different exit criteria – but the companies that actually formalize this process, coach their reps to abide by it, and most importantly, evaluate and manage their opportunities by it, find that they are more effective at winning deals and increasing revenue than those that don’t.”
Jason Jordan, sales management expert, and author
As you can see, it’s worth putting time into managing your sales pipeline. Accurate sales forecasting, increased productivity, efficient resource allocation, slick processes, strong customer relationships, scalability… it all contributes to turning leads into deals.
It really is a case of process makes perfect.
A round up of insights, trends, and tips on the world of content marketing