Optimizing sales pipeline
Why don't all salespeople achieve their goals if every company has a strict sales process? Broken sales processes make it difficult for salespeople to guide prospects through the purchase process and cause a lack of visibility. It is not sufficient to have a written sales procedure. Managing transaction stages and spotting dead deals are made more accessible by creating a strong sales pipeline.
What is a sales pipeline, and why is it needed?
A sales pipeline is a visual representation of your sales prospects and where they are in the purchasing process. This enables you to estimate potential revenue and assess your company's health. It gives you a quick view of how well your company is doing. After all, if you don't measure it, you can't manage it.
Think of a pipeline as a river that is free to flow. There will eventually be issues downstream if there are issues upstream. Pipeline management enables you to identify the minor problems before they grow into significant issues that affect revenue. It allows you to make an educated guess as to how much your reps might close over the course of a week, month, or quarter.
Including sales, a pipeline helps salespeople track where all the money, deals, and other sales efforts are at all times. This is essential since salespeople frequently handle numerous deals and sales prospects and can't afford to let anything go through the cracks. You need a deliberate pipeline management approach if you want more control over your sales. With the correct procedure, you can prevent pointless operations, accelerate growth, and save time.
If something isn't broken, why fix it? But what if you are unaware that it is broken?
Things move swiftly in the B2B world. Therefore, something that was successful a year ago probably isn't as effective now. Optimization of the sales process is a continuous effort. Instead, it's something you need to update and maintain continuously. Even the most sustainable methods occasionally require maintenance. And today, we're advising you to take good care of your sales process.
Optimizing is required, what now?
Sales Pipeline is an effective tool for sales managers who wish to gather and examine data on how effectively their sales process is performing to optimize it accordingly. A sales pipeline provides visibility into which sales efforts produce the highest return for a firm since it tracks a salesperson's actions.
Five steps to build an effective pipeline-
1. Spell out your Customer Journey
Selling to potential customers requires an understanding of how they operate. Meet with your sales staff to discuss how leads become paying clients Some questions you'll have to ponder- a) Who typically makes decisions when buying a purchase? b) How can you get their trust and credibility? c) How many interactions are necessary? With these inquiries, you may determine various elements of your general procedure and let sales representatives know what to anticipate with each sale.
2. Eliminate unnecessary steps
A successful sales pipeline resembles a slick slide in specific ways. Your prospects should quickly ascend to the top, sit, lean over the edge, and descend to the bottom. Your prospects will experience much friction if the "slippery slide" (i.e., sales pipeline) is rusty, which is a deal-breaker. You must eliminate unnecessary steps because adding more would reduce your results.
So, where do you begin?
By streamlining your qualification procedure, you may attract prospects who have a genuine need for your goods and services and eliminate some steps from the sales process.
3. Enhance your accounting systems
Pipeline management includes what happens after a prospect becomes a client and before the sale. To get paid, manage your finances, and assess the general health of your company, you must create a process.
Put another way, you should have a mechanism to determine whether your current sales pipeline is effective. No matter how well-organized your sales process is or how hard you work on it, it will all be for naught if you can't effectively manage your accounting and ensure your clients pay you on time.
You need an accounting system in the modern day to manage your money and streamline your operations with tools like automated invoicing and income tracking.
4. Spot Pipeline Bottlenecks
Are your leads stalling out at the same stage of the pipeline regularly? Do you have many leads flowing into the pipeline, but few of them qualifying themselves? A pipeline bottleneck results from this.
A successful lead nurturing effort is often the answer to a pipeline bottleneck. Getting fresh leads is useless if they don't progress through the pipeline. The objective is to cultivate leads over time so that they will knock on your door when they are ready to buy.
5. Estimate KPIs
Without a clear end in mind, a process is rather pointless. Motivating people requires them to understand their goals, isn't that correct? You must choose, monitor, and evaluate the appropriate data to have a goal in mind.
Sales managers should continuously provide feedback and keep sales reps informed about the KPIs they are working toward. Prioritizing should be given to metrics that enhance sales performance rather than vanity metrics. These include the percentage of the team fulfilling the quota, the average on-target earnings, and the sales cycle length.
Sales Pipeline v/s Sales Funnel
The flow of prospects through a sale is described by both the sales pipeline and the sales funnel; however, there is a significant distinction between the two frequently misunderstood terminology.
- A sales pipeline represents the steps a consumer takes to become a customer. The sales funnel represents the volume of prospects who go through those stages.
- A sales pipeline examines each stage of the sales process, from generating leads to closing deals. It is brand-focused and examines the internal processes your sales and marketing teams must carry out to convert and keep a prospect as a customer.
- A sales funnel considers the entire customer experience from initial brand awareness to actual purchase. It is client-focused in that it considers the many steps a customer will take to make a purchase.
A sales funnel is for leads, whereas a sales pipeline is for deals.
Every step a sales representative takes to complete a deal from beginning to end is referred to as a sales pipeline. Conversely, a sales funnel consists of the steps the lead goes through in the purchasing process before becoming a client. A sales funnel considers the entire customer experience from initial brand awareness to actual purchase. It is client-focused in that it considers the many steps a customer will take to make a purchase.
How to measure the quality of your sales pipeline
Metrics that are tracked and routinely reviewed at the rep, team, and territory levels make it simpler to pinpoint what is and isn't working, pipeline bottlenecks, and team members' strengths and limitations. Let's examine the metrics, their meanings for pipeline health, and the methods used to calculate them.
No of qualified leads You can't complete deals without quality leads, which should practically go without saying. Keep track of all inbound and outbound leads to ensure that your sales force has a sizable pool to earn money required to expand the company. It is a code red if you don't have enough qualified leads for the upcoming quarter. Do nothing but focus on finding a solution. Spending more on marketing to attract more prospects, training reps on keeping a current list of contacts, and using prospecting tools to receive real-time notifications about position changes among your prospects are all things to think about.
Win rate Increase your training, enhance your sales procedures, and employ better sales enablement technologies if it is declining. You can have a marketing issue rather than a sales issue if you are completing deals quickly, but your overall sales are not where you would like them to be. Now is the moment to step up your marketing initiatives to generate more leads.
Average Deal Size This indicates the volume of qualified leads that become paying clients. Keep track of this number throughout predetermined time frames, like from quarter to quarter, so that you can monitor changes. How much money does a typical deal make? You can only begin to plan for the future and develop tactics to enhance your deal size once you know how big your current transactions are.
Consider your average deal size to decide how to divide the team's resources. It would likely be a better use of resources to assign some account executives to smaller accounts if 50% of your account executives are concentrating on closing enterprise customers. Yet, your average deal size is only $5,000.
Customer Acquisition Cost (CAC) Customer acquisition cost (CAC) is a metric used in sales and marketing to determine how much it costs to acquire a new customer. This figure should be as low as possible. Have a high CAC? Your sales operation's expense side may need some adjustments. Sometimes a modest adjustment, like only authorizing business expenses associated with prospects with a specific deal size, can have a significant impact.