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How to Effectively Manage Your Sales Pipeline
June 7, 2024
|
7 min. read
LAST UPDATED
June 13, 2024
READING TIME
7 min.
Businesses with an accurate sales pipeline are 10% more likely to increase their revenue compared to their competitor. Now, the key to having an accurate sales pipeline is effectively managing and optimizing it once it has been developed.
A sales pipeline is a step-by-step forecast of actions to drive sales for your product or business. This usually includes finding leads, qualifying them, making a pitch and closing the deal. This post will show you everything you need to know to build a full-proof sales pipeline as well as effective pipeline management guaranteed to increase your company’s revenue.
What is Sales Pipeline Management?
While sales pipeline management is the process of tracking and moving potential customers through several stages of the sales process, a more accurate description is ensuring that your sales pipeline stays highly effective and that it improves overall sales performance.
This is because while tracking and moving prospects initially might be relatively simple to do, with time as your leads compound, bottlenecks start to show up. It becomes difficult to keep track of all their interests, and what they need in the sales pipeline. At this point, you’ll need help with automating the process to properly manage your pipeline.
When you have a clear sales pipeline management strategy, you’ll get clearer details into what exactly is working in your sales process and what to improve or optimize at each stage of your sales pipeline.
Why Should You Invest in Sales Pipeline Management?
If you’re not sure whether investing in proper pipeline management is worth it for your business, here are a few reasons you should consider taking it more seriously.
Shorter sales cycles: By streamlining the sales process and identifying bottlenecks, pipeline management can help you close deals faster. Also once you can start tracking your sales progress, you can identify deals that are stuck or unlikely to close, so your sales team can focus their time and energy on the most promising opportunities.
Improved sales forecasting: Tracking the progress of deals through the sales pipeline, can also help you get a better idea of how much revenue you’ll get within a particular period. With this, you can make informed decisions about any sales strategy or even make better resource allocation.
How to Build a Sales Pipeline
Now before you can launch a pipeline management strategy, you need to create one. Creating a sales pipeline is just as important as maintaining one because you need to build each stage up to a certain standard.
When creating your sales pipeline, build it in a way that makes it easy to manage all events in your sales cycle, track all your leads at every stage they are in the sales journey, and access metrics to help you understand how successful your sales activities are at each stage in the pipeline.
Now, when creating your sales pipeline, there are several steps and it will all depend on what type of business you’re selling. However, here are the inevitable stages you’ll need to use;
1. Generate and Qualify Your Leads
This is the stage where you identify potential customers and assess whether a lead is a good fit for your product or service. This could be via a webinar, an ebook, cold calls and more. Usually for B2B businesses, you might want to host an event and invest in content marketing and even social media marketing like Linkedin.
Rather than manually finding these leads, you can use the lemlist lead database. With lemlist, you can find leads, verify them before adding them to your database and categorize these prospects so it's easy to track them in the sales pipeline.
2. Create your sales stages of the pipeline
In this stage, you learn more about your lead’s needs and challenges before sending over a proposal. Usually, it could be a discovery call, or even a long email thread - again whatever works for your specific business. After this stage, you can present your product or service to the lead in a way that ties to their specific needs.
3. Negotiate and close
Usually, your leads will try to negotiate the terms of the deal. Whether it’s reducing the pricing plan, or curating one for their specific needs, once you finalize this, you can close the sales deal and they become a customer.
Again, your sales pipeline will vary depending on your business type. In some cases, you might also need more than one sales pipeline especially if you have multiple products or services. In this case, you want to use a tool like lemlist to help you curate and build this pipeline. You can start with a free trial to see if it's a great fit.
Sales Pipeline Management Tips for Your B2B Business
Once you’ve set up your sales pipeline and you already have leads going through the activities you’ve set up, you need to constantly review your sales process. This constant review and optimisation is what makes up your pipeline management and here are some ways you can do this;
1. Set and Constantly Review Metrics
Before looking for what to optimize, there are some metrics to track that will improve your sales pipeline management. When you track these metrics, you can identify the underperforming areas of your sales pipeline and take steps to improve them.
Some metrics you should definitely track include;
Conversion rate: This is the percentage of leads that move from one stage of the sales pipeline to the next up until they become actual paying customers.
Sales cycle length: This is the average amount of time it takes to close a deal. This can tell you whether you need to optimize the stages in your pipeline or the negotiations for a faster closing time.
Win rate: This is the percentage of deals that are closed. If only a few people end up becoming customers, it's an indicator that you don’t have enough quality leads to begin with or, you need to evaluate the entire pipeline.
Pipeline value: This is the total value of all the deals in your pipeline. Think of this as your potential ROI. Is it worth it?
You don’t need to find the formula to calculate these metrics at all. Using a CRM will automatically help you track these important metrics. So we recommend opting for one with enough data reporting features.
2. Automate your sales activities to save time
The stages in the sales process are time-consuming especially with finding leads, building the outreach strategies, reaching out to the customers and manually keeping track of where each lead is in the sales pipeline.
There’s also a high chance that whoever is handling a particular lead or account will change and there might be no time to pass on these key details to the new salesperson in charge. So you need to invest in a CRM that takes care of these repetitive boring tasks so your team can focus on the more important stuff.
With lemlist, you can automate these processes; finding leads, verifying and adding to the database, scheduling calls and setting follow-up reminders, setting up workflows for emails and social outreach, cold calls and more.
3. Update the sales pipeline and reorganize sales activities
Depending on your business needs, you might find out that a sales step is a redundant one. There’s no point moving your leads through that route especially if it doesn’t help with the conversion. For example, if one of your sales activities is to offer a guided product tour, there might be no reason to offer a free trial again because it just lengthens the process.
The longer the process, the more time your leads can change their mind. So identify the sales activities and even channels that take up the most time and switch things up. You can even choose to change what stage you do your follow-ups by making the time in between much shorter.
4. Remove deals from the pipeline that are no longer viable
One of the biggest issues with sales pipelines is that there are too many deals in progress and oftentimes, these leads are no longer interested. When you remove these unviable leads, you can focus your resources and time on leads that actually have a chance of converting thereby lessening your workload.
So sort your leads from oldest to latest, make one final outreach to see if they are still interested and remove the ones that aren’t. Depending on their response, you can move them over to marketing for more nurturing.
5. Train your team on pipeline management
Pipeline management isn’t just a one-man effort, on the contrary, it takes a team. You need everyone onboard constantly looking for ways to optimize the process. However, they have to first understand what the current process is.
For example, if a sales rep doesn’t know that the follow-up period should be a maximum of three days, they have a tendency to lengthen the duration thinking that there’s enough time.
So teach them how to use your CRM for their different things. Let them be able to decipher what stages are affecting the sales pipeline, what leads need their most attention and more. At the end of the day, this will help them reach their quotas faster.
Wrapping Up
A well-managed sales pipeline helps you forecast sales, identify bottlenecks, and close deals faster. Build your pipeline with stages like lead generation and qualification and maintain it by adding new leads, tracking progress, and removing inactive ones.
