A salesperson usually needs an average of eight cold call attempts before a prospective client answers the phone. Moreover, a new sales representative needs almost a year of experience to be fully productive. Sales is a tough game that only the most dedicated players thrive at.
Having great marketing and persuasion skills are not enough. To gain an edge, you need to use tools that can help you monitor and manage your sales activities efficiently. A popular and effective tool that successful salespeople use is a sales pipeline. Read on to learn more about what a sales pipeline is and how you can build your own.
Sales Pipelined Defined
A sales pipeline is a systematic visual diagram or outline that shows you where your individual prospects are in the sales process. It allows you to track leads, buyer movement, and sales activities. Think of it like a board game where you can see the individual pieces move from one block to another until they reach the finish point.
This birds-eye view enables you to monitor not only sales progress or likelihood of a successful deal. It also warns you of issues like deal rots, changing sales patterns, erroneous revenue projections, ineffective marketing strategies, and other sales problems.
Moreover, a sales pipeline can provide you with a real-time collation of large sales data. This is useful especially if you’re handling or supervising multiple sales transactions simultaneously.
Main Stages of a Sales Pipeline
The number of stages your sales pipeline needs would depend on the nature, scale, and ambition of your business. However, there are six main stages that most — if not all — sales processes should go through.
Prospecting Buyers and Customers
Prospecting is the process of finding buyers and customers who are likely to be interested in your product or service. For 40% of salesmen, this is the hardest part of the sales process. However, prospecting is indispensable; it’s the first stage of any sales pipeline.
Taking note of your potential client helps you determine your overall conversion rate. You’ll be able to project just how much action your business will be facing in the next few months. Moreover, you’ll get a picture of how many customers must be generated to reach your revenue and deal objectives.
Establishing Initial Contact
After scouting for clients, the next stage is to make first contact. The purpose of making contact is to establish rapport with your prospects and determine their objectives. This is when you feel that chilling breeze as you make all those cold calls and emails.
The average success rate of a cold call is just 3%, so patience and determination are required. One way to improve your success rate is by having a cold-calling sales script that is engaging and informative. Moreover, there are other mediums you can use like social media and in-person conversations to establish initial contact.
Once contact is made, you’re then able to make a qualification. Qualification involves finding out if your prospect needs or wants the solution your product or service offers. It’s also when you determine if the prospect is aware of your product at all. Some clear signs that your prospect is well-qualified are if they responded positively to your cold call, booked a meeting with you, or took a trial test of your product.
After making a qualification, you can employ sales strategies to increase your chances for conversion. These would include arranging a discovery call or offering a product demonstration.
Sales is not a robotic process where selling your product is the sole goal. You also have to build and nurture relationships with your prospects and customers. More than 80% of consumers say that they are likely to make another purchase from a vendor who offers positive engagement and great customer service.
There are several ways to create good relationships without being annoying. These include sending relevant articles to your prospects that help address their pain points or simply liking and commenting on their LinkedIn posts.
To improve sales conversion rate, relationship building should be incorporated into as many stages of the pipeline as possible.
If the other stages aren’t exciting enough, the negotiation part should get your gears rolling. This stage is important as organisations with a robust negotiation process can realise over 40% in net income increase.
Negotiation is when you work to agree on sales factors like price, conditions, and quotations. Moreover, it’s at this stage that you resolve objections and temper residual reservations that your prospect may still have. It’s important that you tread carefully as you negotiate with your prospect as one wrong move can throw all the hard work you made in the previous stages down the drain.
After all the prospecting and negotiating, you’ve finally reached the last stage in the sales pipeline — deal closing. Depending on how well you and your sales representatives performed in the previous stages, you may either close the deal or lose it.
It’s okay to lose in some of your dealings. In fact, the average success rate only ranges from 1% to 20% across different industries. Regardless of the outcome, the deal needs closure. There’s no point in clinging to a deal that is never going to yield fruit. You will only be wasting time that you could have otherwise used in prospecting for new clients.
Steps for Creating a Sales Pipeline
Now that you’re familiar with the stages, you may be asking how you can create your own pipeline or wondering how to increase your sales pipeline if you already have one in place. Whatever the case, all you need to do is follow a few simple steps.
Create a Record of Contacts and Prospective Buyers
There’s no need to create a sales pipeline if you don’t have a list of people to sell to. Make a complete record of your leads and contacts. This way, you can conveniently manage the influx and outflux of prospective buyers and manage the interactions you have with each of them.
To create a record, you can use tools like Microsoft Excel or Google Spreadsheets. However, if the volume of your prospects is already huge, or if you’re handling many deals, you should develop your own sales customer relationship management (CRM) software.
A custom CRM will enable both you and your team to monitor and manage deals collectively and transfer these deals from one end of the pipeline to another.
Manage and Define Sales Activities for Each Stage
There should be a corresponding set of workflows and activities for each stage of your sales pipeline. You should manage and define these sales activities and make sure that they are placed at the appropriate stage.
For instance, the prospecting stage includes activities like scouting prospects. Meanwhile, the initial contact stage usually involves making cold calls and sending emails. However, these activities are not set in stone. You are free to use whatever method or medium as long as they will help you go through each stage successfully.
Improve and Refine the Stages as Needed
After creating a list of prospects and plotting activities, it’s time to refine your pipeline. The need may not be immediate, but once you notice unique patterns, you should adapt by tweaking or adding sections to your pipeline. An example is the need to add a “buyer reassurance” section if you’re seeing high frequencies of buyer correspondences that are indicative of wavering resolve or apprehension.
It’s a continuous process. However, by constantly improving your pipeline, you ensure that the outline it provides remains beneficial to sales generation and your business in general.
Consistently Update the Pipeline
To ensure that your sales pipeline is always free from sales clogs, you should update the data you put in regularly. Orient and train your sales representatives to do the same. Make it a habit to enter all new prospects and transactions into the pipeline and delete obsolete deals. You should likewise move deals from one stage to another as they progress.
By consistently updating the information in your pipeline, you are better equipped to make precise assessments. Moreover, you are properly guided on what strategies to use to improve overall sales conversion rates.
There are several stages in a sales pipeline. While the concept may sound complex, it’s not that complicated once you put it into practice. From creating a list of prospects to making sure that your pipeline is up-to-date, you only need to follow simple steps to create your own sales pipeline.
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