Sales pipeline is your business’s lifeline. With it, you’re getting a steady supply of new business. You’re growing - or at least maintaining revenue, which helps maintain your organization.
Without a working pipeline, the reverse is true. You might have the best product in the world... But no leads and no way to convert them consistently. Your business is in trouble.
On this page, we explain what sales pipeline is; why it’s so important; what its stages are. More importantly, we take you through how you can build a successful pipeline, step by step.
We also cover how building sales pipeline now, in the new normal, is different to building it pre-2020. Read on as we start with key takeaways then dive into the subject in more depth!
Key Takeaways
- Sales pipelines help track prospects, prioritize efforts, and improve sales productivity. They’re a visualization for salespeople, helping understand and increase the sales process.
- You need to evaluate and identify your ideal customers and sales funnel stages to create an effective pipeline.
- The long-term success of a sales pipeline depends on constant optimization.
What is a Sales Pipeline?
A sales pipeline is an essential tool that helps drive sales. On a basic level, it’s a visual representation of where each prospect is in the sales process. Its purpose is to help identify next steps and avoid roadblocks or delays in the sales process. Over time, this makes it easier to gauge potential revenue and understand the health of your business.
A well-organized sales pipeline is more than just a visual aid. It's a critical part of maintaining control over your sales process and ensuring the continued growth of your business. When used correctly, it provides valuable insights and helps identify areas for improvement in both nurturing and closing phases.
Effectively managing your pipeline is also a critical component of achieving long-term sales success. When paired with a CRM system, a sales pipeline can also improve customer relationship management and sales success.
Sales Funnels vs. Sales Pipelines
It’s important to note that sales pipelines and funnels are similar but different. A sales pipeline focuses on where prospects are in the sales process. It includes steps like lead generation and closing deals, and applies these to our general sales flow and individual deals.
Put simply, a sales pipeline is a step-by-step representation of your sales process. It starts at the initial prospecting stage to closing the deal. Each stage represents a specific milestone that your prospect must complete before moving on to the next step. A pipeline allows you to track individual prospects, forecast potential revenue, and evaluate overall sales performance.
A sales funnel, on the other hand, represents the different stages of the buying journey from a marketing point of view. Its focus is mapping marketing efforts and content, e.g. PPC ads or demos, to funnel stages.
The funnel starts broad at the top and narrows down as prospects move closer to making a purchase. A funnel tracks conversion rates at each stage and can help you identify bottlenecks or areas for improvement. It focuses on the overall optimization of the sales process, ensuring a smooth transition of prospects from one stage to the next.
Here's a shorter comparison to illustrate their differences:
Sales Funnels
- Focuses on the buyer's journey from awareness to decision-making.
- Groups customers and highlights conversion rates at each stage.
- Identifies potential bottlenecks and weaknesses.
- Prioritizes marketing-side processes.
Sales Pipelines
- Focuses on the seller's perspective.
- Breaks down specific milestones and steps in your sales process.
- Tracks individual prospects and deals.
- Useful tool for forecasting and evaluating sales team performance.
Sales Forecasts vs. Sales Pipelines
The terms "sales forecast" and "sales pipeline" are often used interchangeably, but they serve different purposes. Understanding the differences between these two concepts will help you sell better and ultimately grow your business faster.
As previously mentioned, a sales pipeline is a visual, sales-focused representation of the buyer’s journey. It outlines the stages a sales team would go through, from identifying potential leads to closing deals. A sales pipeline helps you track and manage prospects. By focusing on where they are in the sales process, you can identify the most effective next steps to take.
A sales forecast is a numerical prediction of future sales over a specific period of time. Sales forecasting helps estimate business revenue. It’s based on historical data, current market conditions, and your sales pipeline.
While a sales pipeline focuses on managing leads and opportunities throughout the sales process, a sales forecast determines potential outcomes.
The accuracy of a forecast is directly dependent on the quality of your pipeline data. Therefore, maintaining an accurate and updated sales pipeline is crucial for effective forecasting.
Key Sales Pipeline Stages
Before you can build a sales pipeline, you need to clearly understand the different sales funnel stages. These stages are usually broken down into the following sub-sections. It is not uncommon to add different stages, like “Upselling” or “Renewing” - but these are the key steps:
Lead Generation
Lead generation is the process of finding and attracting potential customers and getting their contact information. Targeted outreach, social media platforms, video outreach, or blog content can all be used to create a pool of leads.
The end goal is to gather and organize leads in your customer relationship management (CRM) system.
Lead Qualification
After generating leads, you need to qualify them. This is achieved by separating qualified leads - those with potential to become customers - from unqualified ones.
To effectively qualify leads, probe for factors like the prospect's budget, authority, need, and timeline (BANT). Doing so allows you to focus your efforts on the most promising opportunities. Common ways to get information are asking directly, looking at marketing data, and looking for signs of readiness - or non-readiness - to buy.
Discovery
During the discovery stage, your goal is to collect more qualitative information about prospective buyers. This ensures you can customize your approach.
Ask questions to better understand pain points, needs, and wants. In this phase, it's crucial to establish trust and rapport with your potential customers.
Using Sendspark’s video recorder is one effective way to reach out to prospects for information in a more personalized way. Alternatively, you can always use live calls and text messages to get your point across.
Proposal
Once you've identified the needs of qualified leads, it's time to create a proposal. Your proposal should outline the solutions your product or service can offer based on the customer's challenges.
Your proposal should be personalized and present a clear, compelling case for why they should choose your solution over competitors. It should be based on the information you got in lead qualification and discovery.
Selling
In the final stage of the sales funnel, you need to negotiate terms, conditions, and pricing. This involves discussing payment options and addressing any final concerns the prospect might have.
Don't be afraid to employ persuasive techniques and demonstrate your confidence in your product or service during this stage. The goal is to close the sale, and your customers will find it easier to buy if they believe you.
Identify Your Ideal Customer
This process starts with developing an ideal customer profile (ICP). This is a detailed description of the type of company that would most benefit from your product or service. Your ICP should include factors such as company size, industry, location, and any other characteristics linked to your specific offering.
With a clear ICP, you can now create buyer personas. These represent the individuals involved in the decision-making process. Buyer personas are fictional yet realistic profiles of your potential customers. They should include demographics, goals, preferences, and challenges. This will help you understand and empathize with the customer, ensuring you can effectively address their needs.
If you use Sendspark, note that you can use our analytics to pinpoint both your ICP and buyer personas with more accuracy. Just gather data to see who views and interacts with your videos the most - and try focusing on these audiences.
Next, analyze your existing customers to determine trends, commonalities, and unique selling points. These insights will help you refine your ICP and buyer personas. Be sure to consider potential objections and pain points existing customers have raised in the past. This ensures you can address common concerns early on in the process.
You can now use your ICP and buyer personas to target leads who are more likely to convert. Leverage channels such as social media, industry events, and referrals from existing customers to identify and engage these prospects.
Word of advice… As a rule, many B2B salespeople forget that the people they sell to are, first and foremost, people. They assume B2B sales should be dry, boring, and fact-based. This is, in our experience, inaccurate. To get as many sales as possible, make sure to emphasize the buyer you’re appealing to as well as the company you’re targeting.
Understand and Optimize Your Current Pipeline
You most likely have some kind of sales flow and process already. When you’re getting started, it’s helpful to understand this flow and see how you can improve it. Here are some tips that can help:
1. Analyze your existing sales process
Start by identifying areas that work as well as those that may require improvement. Where are customers generally dropping off in your pipeline? Focus on these first.
Which pipeline stages convert extremely well? This is another important question to ask. The more you understand what people respond well to, the easier it is to focus on it and improve results.
If you're starting from scratch, outline the key steps your sales team should follow. Go from the initial contact with a prospect to closing the deal. Align the steps in your sales process with your company's goals and customer needs - then act based on initial feedback.
2. Implement a CRM
To streamline your sales processes, make sure you have a customer relationship management system in place. A CRM can help you organize, track, and manage your leads, deals, and customer data. This will keep your sales pipeline organized and efficient.
Choose a CRM that is tailored to your business needs and integrates seamlessly with your existing tools and workflows. HubSpot, one of our integration partners, is an intuitive app that’s easy for small businesses to use - and it scales well.
3. Train your sales team.
Ensure your team thoroughly understands the steps in your sales process. They should also know how to effectively use the CRM system to manage their leads and deals. Training fosters consistency and empowers your team to navigate your pipeline with confidence.
4. Monitor pipeline performance.
It’s important to continuously monitor key performance indicators (KPIs). Conversion rates, deal sizes, and sales cycle length are some examples. Regularly review and adjust your processes based on insights gained from this data. Make changes as needed to ensure your sales pipeline remains effective and efficient.
By focusing on improving your sales processes and leveraging the right CRM solution, you can establish a strong foundation for your sales pipeline. Remember, it's essential to maintain a clear and consistent process that evolves with your business and with industry trends.
Feed Leads into Your Pipeline
Leads need to be continuously fed into your sales pipeline to keep it strong. To do this, it’s important to use various lead sources for your business. These can include inbound marketing, cold prospecting, video marketing, referral programs, and more.
If your business is already running, you likely have some idea of what your lead sources are. If you are only planning your business, or haven’t started sales yet, you may not be 100% clear.
Either way, in the long run, it’s important to tap into multiple lead sources to diversify your pipeline and avoid over-reliance on a single channel. This ensures a steady flow of leads and reduces the risk of pipeline underperformance. Regularly analyze your sources to determine where you’re getting the highest quality leads and adjust your efforts accordingly.
Next, you want to focus on optimizing pipeline management, ensuring a smooth transition of leads from one phase to the next. Automate processes where possible - for example, by having clients get automated onboarding messages once they sign their contract.
Stay organized by incorporating a customer relationship management (CRM) system. This will allow you to track lead information, activities, and sales conversations. With a CRM, you can easily monitor and update lead statuses, record notes, and schedule follow-ups. The aim is to always have a clear view of the health of your pipeline.
Make sure you don’t just feed leads into your pipeline. Push them forward through the process too by using nurturing. Personalized email campaigns, phone calls, and social media interactions will keep your brand top-of-mind. Custom videos are always a good idea as well.
Review and Optimize Your Pipeline
Now your sales pipeline is up and running. Regularly reviewing and optimizing it is the surest way to truly achieve your sales goals. Making this a continuous process helps you track progress and improve efficiency. Here are some best practices to follow:
Establish key metrics. Knowing which metrics you want to monitor ensures you’re always tracking pipeline performance. Metrics such as lead conversion rates, average deal size, and time spent in each stage of your pipeline are some examples of key metrics used for sales pipelines.
Analyze conversion rates
Tracking conversion rates at each stage of your sales process can help you identify areas for improvement. If you find that prospects are not converting at a particular stage, examine your sales process to identify bottlenecks. You can then take corrective action, such as providing additional training to sales reps or modifying sales pitches.
Set achievable goals
Your sales goals should be based on current trends and historical performance. Consistently evaluate whether you are meeting or exceeding these goals. Small adjustments to your sales strategy or pipeline management can help you get back on track.
Optimize your sales pipeline
Consistently reviewing your pipeline allows you to focus on the areas where you are falling short. For example, you could track which types of leads are converting at the highest rate and then adjust your prospecting strategy to target similar leads.
Organize your sales pipeline
Maintaining an accurate and organized sales pipeline ensures your efforts are focused on the right prospects. Update your data regularly, remove any outdated information, and ensure your sales reps have the correct details for each lead.
Following these best practices and adapting your pipeline management process as needed, makes your sales pipeline more efficient.
Clean Your Pipeline
“Cleaning your pipeline” refers to optimizing your pipeline flow and processes to drive more revenue.
The first step in cleaning your pipeline is identifying problem prospects. Keep an eye on prospects who have been stuck in the same stage for too long. This might indicate they are not interested or engaged.
Assess these prospects to determine if you should continue pursuing them or remove them from your pipeline. If the same kind of prospect keeps reappearing in your pipeline, consider changing your processes in order to avoid targeting low-quality leads.
Second, ensure that your prospecting information is up to date. Accurate data is crucial for maintaining a healthy sales pipeline. Contact details, deal sizes, and other relevant data should all be checked on often. Regularly review and update your data to avoid potential bottlenecks or inaccuracies that could impact your sales process.
Third, find and fix functional issues. Evaluate each stage of your pipeline to identify where prospects may be stalling or dropping off. Examine your sales process to find weak spots or barriers preventing prospects from moving forward. Implement fixes to streamline these areas and improve the overall health of your pipeline.
Last but not least, make it an ongoing habit to improve your pipeline regularly. Identify best practices and implement new strategies to attract and engage prospects. This can include refining your prospecting methods and implementing sales automation tools, amongst other things.
5 Common Sales Pipeline Problems
A Long Sales Cycle
A long sales cycle can lead to a stagnant pipeline. The length of a sales cycle can be affected by factors such as product complexity, market conditions, and deal closing rates.
Solution
Take the time to analyze your sales pipeline stages and address any bottlenecks or inefficiencies. The aim is to find ways to shorten your sales cycle wherever possible.
Poor Sales Processes
Ineffective sales processes can cause your pipeline to suffer. Your team should follow a consistent approach to managing leads, qualifying prospects, and closing deals. A lack of clear guidelines may lead to confusion, inconsistencies, and lost opportunities.
Solution
Streamline your processes and establish best practices to maintain a healthy sales pipeline. Use tools like CRM systems to automate and manage tasks to improve your sales processes.
Targeting the Wrong Audience
Targeting the wrong audience could hinder the growth of your sales pipeline. It's crucial to identify and focus on the right prospects. These are people who are genuinely interested in your product or service.
Solution
Research and segment your target audience to create tailored messaging that resonates with them. Building accurate buyer personas will also help you better understand your audience’s needs, pain points, and motivations.
No Understanding of What’s Working (and What Isn’t)
Analyzing your sales pipeline stages can help you better understand your team’s performance. Regularly tracking and measuring key metrics ensures you can identify and correct issues quickly and efficiently.
Solution
One of the metrics you should be tracking is conversion rates at each stage. You can never rely on intuition alone. Using data-driven insights to optimize your sales pipeline and make informed decisions will help understand what’s working.
Excessively Focusing on One Pipeline Stage
Every stage of your pipeline matters. An overemphasis on one stage can cause you to neglect other crucial stages. Conversely, focusing too much on closing sales might hinder opportunities for sourcing new prospects.
Solution
Find a balance between all stages to ensure a smooth sales process and a healthy pipeline.
In Closing
A sales pipeline is a visual tool crucial for driving and tracking sales, representing each stage of the sales process. It not only offers insights into potential revenues but, when paired with a CRM system, can enhance customer relationship management and sales success.
To build an effective pipeline, one must comprehend its key stages: from lead generation to sales closure. This involves understanding the potential customer, which starts with the creation of an ideal customer profile (ICP) and buyer personas. These tools help pinpoint specific customer types and profiles, allowing for more targeted sales efforts.
To maximize the efficiency of a sales pipeline, regular review and optimization are imperative. Such continuous assessments ensure that the sales goals are met and that the pipeline remains responsive to changes in the market or business needs. Establishing key metrics, analyzing conversion rates, setting realistic goals, and maintaining organized data are some best practices.
Moreover, it's crucial to "clean" your pipeline regularly. This involves identifying and removing stagnant prospects, updating data, addressing functional issues, and continuously improving processes. Regular maintenance ensures the pipeline remains healthy, productive, and aligned with the business's evolving goals.
Grow Your Pipeline with Sendspark
When it comes to lead generation, it's essential to stand out and make a lasting impression. Sendspark's video messaging offers a direct and memorable way to engage potential clients. Instead of getting lost in a sea of text emails, your outreach becomes an interactive experience.
Using Sendspark, you can easily create personalized videos for each lead, making them feel valued and understood. This not only helps in building trust but also increases the chances of a response. In a world where attention is scarce, Sendspark ensures your message gets the attention it deserves.
Want better engagement and a fuller sales pipeline? Try Sendspark today.
Frequently Asked Questions
What are the essential steps in creating a sales pipeline?
To create a sales pipeline, you should first define your sales process and identify the various stages your leads will move through. Next, outline the tasks and actions needed to move leads from one stage to the next. Finally, establish performance metrics to track progress and identify areas for improvement.
How can pipeline metrics improve sales performance?
By monitoring pipeline metrics, you can identify bottlenecks. This will help you gauge the effectiveness of your sales strategies. Some key metrics to track include lead conversion rates, deal closing rates, and average deal size. Regularly analyzing these metrics allows you to adjust your approach for better results.
What strategies are effective for sales pipeline management?
Effective sales pipeline management strategies include:
- Regular pipeline reviews.
- Consistent follow-ups with leads.
- Prioritization of high-value prospects.
- Leveraging data for insights.
- Testing different sales techniques.
- Focusing on client relationship management.
How do the stages in a sales funnel differ from those in a pipeline?
While both sales funnels and pipelines represent a customer's journey, they each have a different focus. A sales funnel typically focuses on the customer's perspective. It highlights the journey a customer would take to make a purchase. Sales pipelines, on the other hand, visualize the progression of leads from one stage to the next. They focus on the tasks and actions required to close deals.
What are some creative tactics to enhance pipeline growth?
To enhance pipeline growth, it’s important to explore different lead generation methods. Some examples are content marketing, targeted advertising, social media outreach, and strategic partnerships. Personalized, value-driven communication can grab a prospect’s attention and improve engagement. Creating custom video content using Sendspark is one idea. Keeping your sales team up to date on the latest tactics and techniques is another way to drive pipeline growth.
How can CRM tools, like Salesforce, streamline sales pipeline processes?
CRM tools, such as Salesforce, help you better manage and organize your sales pipeline. This is done by automatically tracking leads, monitoring communications, and storing data in a centralized location. These processes improve customer interaction visibility and enable better pipeline management. CRM tools also provide valuable insights, automation features, and reporting capabilities that can help you optimize your sales pipeline.
