Wonder how the top 1% of sales reps at any sales organization always meet and exceed their targets?
The answer is they have a robust, active sales pipeline that shows them what potential customers want, where opportunities are, and how to close deals fast. The more they know about prospects, the more their targeted approach can be, which leads to their outstanding performance.
In this guide, we’ll explore the essentials of a sales pipeline. You’ll learn what it is, what it’s used for, its stages, the difference between a sales pipeline and sales funnels, how to build a pipeline, and a tool you need to succeed.
What Is a Sales Pipeline?
A sales pipeline outlines stages of a sales process and specific actions a sales rep needs to complete to make a sale. It tells the sales reps where they are now, where they need to put more time and energy, and what they need to do next.
What Is the Sales Pipeline Used For?
A sales pipeline plays a crucial role in guiding your sales reps in the right direction to close more deals and increase sales. It can also be used to track how a prospect moves through every stage of your sales process.
Research shows that with an effective sales pipeline, businesses can grow their revenue up to 28%, compared with an average growth rate of 4.6% in companies having ineffective sales pipeline management.
Sales Pipeline vs. Sales Funnel
Sales pipeline and sales funnel are often used interchangeably, but the truth is, they’re different terms.
A sales funnel is a marketing term referring to the journey someone goes through from not knowing a product or a brand to purchasing.
It helps marketers understand what a prospect wants and behaves at each stage of the buying process. From that, marketers can develop relevant messages and campaigns, increasing the chance to turn the prospect into a paying customer.
A sales funnel typically includes four stages: awareness (a consumer becomes aware of a product), interest (the consumer starts researching and comparing options), decision (the consumer determines the best possible solutions and is ready to make a final decision), and action (the consumer purchases). As you can see, a sales funnel illustrates the sales process from a buyer’s perspective.
A sales pipeline, on the other hand, defines a sequence of actions that a sales rep needs to take to move someone from a prospect to a purchaser. What information about the prospect the sales rep needs to know, how to leverage that insight to target the prospect, what’s the best time to close the deal, and more.
Simply put, a sales pipeline depicts the sales process from a salesperson’s perspective. Let’s take a look at the sales pipeline stages to understand more.
Sales Pipeline Stages
The following are the common sales pipeline stages. Note that it may vary depending on industry and business.
- Generating prospects: Identify and bring leads into the pipeline. Leads are unaware of your business and product.
- Qualifying prospects: Determine the prospects that have the highest intention to purchase. The best practice is using lead scoring, which allows you to assign a score to each prospect based on specific criteria.
- Meeting prospects: Set up an appointment with prospects to discuss how your product helps them solve their problem. If the meeting goes well, prospects will request further information, which leads them to the next stage of the sales pipeline.
- Sending a sales proposal: Prepare a sales proposal and send it to a prospect. The proposal should convince your prospect you’re the best solution available to them and inspire them to take action.
- Closing deals: Finalize the deal — either you win or lose it.
What Should You Have to Start?
Now that you’ve understood the importance of a sales pipeline in driving sales performance. Is it time to build one?
Not so fast. Make sure you gather the following information from the get-go, as it’ll help create a solid foundation to develop a sales pipeline that works:
- Who are your target customers? What do you know about them? Their contacts, locations, roles, preferences. The more you understand your prospects, the better.
- What is your sales process? What are the typical steps your sales reps go through when making a sale? What are the activities associated with each step?
- What are communication channels? Sit down with your sales reps and ask them these questions.
- What are your sales targets? Your goals determine the number of prospects and deals you should have. They’re also necessary to measure your sales reps’ performance.
How to Build a Sales Pipeline (5 Tips)
Once you define your target customers, sales process, and sales targets, it’s time to create a sales pipeline. Keep in mind these tips:
1. Map out your ideal sales pipeline. You can follow the five stages above or adjust them to match your business situation and customer persona. When doing this, you should ensure your sales stages reflect the buying journey of your target customers.
2. Calculate the number of prospects and deals you need in each sales stage based on your sales targets.
3. Update your sales pipeline regularly. You can use tools like Revenue Grid to track changes in your pipeline so you can avoid risks and not miss out on any opportunities.
4. Optimize your sales pipeline management with a CRM. Revenue Grid also offers Revenue Inbox — a sales pipeline CRM that integrates your email and Calendar with Salesforce. With Revenue Inbox, you can access and manage data from a single place without having to switch back and forth between these platforms. Your sales reps will stay organized and work more productively.
5. Define metrics to track your sales pipeline’s performance. Consider metrics such as win rate, sales cycle length, deal fallout by stage, lead response time, and close ratio. In Revenue Grid, you can track these metrics and check your pipeline health easily.
Sales Pipeline Management Tool
A sales pipeline management tool like Revenue Grid aids you in every step of creating an effective sales pipeline. It can become a game-changer for your sales process.
Revenue Grid provides you with automation to automate your pipeline. For example, you can set up rules to trigger when a prospect moves out of a sales stage and send a reminder to a sales rep to follow up with the prospect.
Additionally, Revenue Gird informs you of any changes in your sales pipeline. Think about situations where a prospect has become unresponsive during a period, or there is a dramatic drop in committed pipeline. Revenue Grid will send you immediate alerts and insights so you can take action to catch deals before they go south.
With Revenue Grid’s sales pipeline report, you’ll have a concrete, actionable view into how your sales process is performing and how you can convert more prospects into customers and sales.
Interested in taking your sales pipeline to the next level with Revenue Grid? Then contact us for a demo today.