Sales Pipeline: All You Need To Know for Building One Effectively
Behind every effective sales team is a strategy and a healthy sales pipeline. Such a model guides prospects through the buying journey and helps sales teams document touchpoints along the way. Consider this your guide to understanding the significance of a sales pipeline and its various facets. We also provide practical tips for building and maintaining a thriving one.
Definition of Sales Pipeline
Before getting into the weeds, let’s begin with the basics. A sales pipeline presents all the stages related to the sales process, in a physical format. It provides a baseline for sales teams to track activity, predict future sales, and intervene if needed.
What is a sales pipeline?
A sales pipeline is more than charts and graphs. It portrays the buyer’s journey as they move from awareness to making a purchase, (i.e. a conversion). Each stage in the pipeline aligns with a phase in the buyer’s journey. Knowing where a buyer falls in the progression helps sales reps reach them with the right message at the right time.
What Are the Sales Pipeline Funnel Stages?
A sales pipeline reflects the following stages and activities:
Sales prospecting
Lead qualification
Demo or meeting
Proposal
Negotiation
Closing
Each stage is important to the outcome, as it helps get the prospect closer to becoming a customer.
Benefits of a Sales Funnel Pipeline and Why Your Business Needs One
Sales teams stand to benefit from implementing a sales funnel for a number of reasons. Here are a few:
Overall Sales Insights
Where are prospects getting stuck in the funnel? You might discover you need to adjust tactics or strategies to get the desired results.
Sales Productivity
Sales productivity looks at sales team quotas and the steps team members are taking to get there. For instance, what’s an individual’s win rate?
Sales Performance Monitoring
You might have motivated salespeople on your team. Or, maybe you have some who are lagging behind. Either way, a sales funnel pipeline will provide objectivity, so you can proceed more confidently.
Improved Revenue Forecasting
Past buying habits might suggest what’s to come. A sales funnel can give sales teams more clarity on sales expectations, so they can focus their energy with more intention.
By being mindful of these benefits, sales teams can adopt and adjust processes, bring in more sales, and give the competition a run for their money.
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How To Build Your Sales Pipeline in 8 Steps
Sales teams follow a certain order of operations when building a sales pipeline. They include:
Define Your Ideal Customer
Determining your ideal customer is an important first step when building a sales pipeline. You can do this by coming up with a hypothetical customer profile that reflects factors such as demographics, behaviors, frustrations, and buying motivations.
Getting to know your prospect on this level can help you better discern who might make a purchase. These insights can help sales professionals refine their message and approach, all so they can speak to the customers’ unique needs and situations.
Establish Your Sales Stages
Most sales don’t happen overnight. Sales teams will put in time and effort in areas like prospecting, initial contact, needs assessment, proposal, negotiation, and closing to move the prospect through the sales funnel. Each one is important to the outcome and helps sales reps understand the next steps and adjust tactics as needed.
Assign Sales Tasks to Your Team
Take inventory of the actions dictated by each stage and assign sales reps tasks accordingly. It’s important that each team member understands what’s being asked of them so there are no surprises.
Sales are dynamic and interactive. Sales reps can’t expect leads to come to them without any legwork. Making prospecting calls, sending follow-up emails, and scheduling product demonstrations are activities that can help influence potential buyers.
Establish Your Ideal Sales Cycle
The timeline for moving a lead through the entire sales process will vary across organizations and teams. You can better predict the average duration of each stage by looking at past sales data. Armed with this information, sales managers can set their teams up for success by setting reasonable goals.
Set an Ideal Sales Pipeline Size
Crunch the numbers to arrive at the number of leads your sales pipeline should have at any point to meet targets. Having an intimate understanding of conversion rates and your sales cycle will help.
The ideal-sized pipeline offers reassurance that you have enough prospects to meet your sales goals without pushing your sales team past their limits. Ideally, lead generation and conversion have a balanced ratio.
Constantly Add and Qualify Leads
A healthy sales pipeline depends on consistent and qualified leads. Not every prospect will become a customer. Prioritizing quality instead of going after any opportunity can mean fewer dry spells, improved conversion rates, and less frustration.
Set and Monitor Your Sales Metrics
Key performance indicators (KPIs) can help you evaluate the status of your sales pipeline. Conversion rates, average deal size, sales cycle length, and other markers can help you identify trends, gauge performance, and make better decisions.
Perform Sales Pipeline Maintenance
Make time and space for regular maintenance. Scrub your sales pipeline to remove stale or unqualified leads. You’ll need to confirm the status of each lead, update information, and make sure the pipeline presents an accurate, real-time picture.
Successful sales teams swear by these steps. However, you should also factor in your organization’s challenges, opportunities, and goals when building a sales pipeline. No two paths will look the same.
Sales Pipeline Management: How to Improve It
Sales pipeline management is not a set-it-and-forget-it proposition. You need to take active ownership to hit goals and set ones that are in line with your team’s abilities. These tips can help you succeed:
- Make a point to check in.
Dedicate time to review and update your pipeline so it represents the current state of affairs. Look for bottlenecks in the sales process and implement strategies to remedy these issues.
- Use reports to improve.
You can’t hit goals based on gut feelings alone. Sales reports can provide objective feedback about performance and help you refine processes and procedures to land more sales.
- Track what matters.
You can’t manage what you don’t measure. It’s important to log important data points like conversion rates and deal sizes, so you know where you stand.
- Stay active and engaged.
Check in and update your sales pipeline weekly (or at whatever cadence makes sense), so you can adjust goals based on internal and external factors.
Sales pipeline management is both an art and a science. Putting in time and effort is worth it when you consider how it can improve efficiency, productivity, and profitability. Sales teams that function without a proper sales pipeline management strategy are leaving success to chance. On the other hand, a sales force with a healthy pipeline is a more confident one.
Master Your Sales Pipeline With Podium
The most productive sales teams look for solutions to help them stay organized and efficient as they work through prospects and aim for conversions. Try Podium’s AI Employee to take control of sales processes. Your reps will thank you, as they’ll have more time to build and nurture relationships—and hit goals.
Podium’s AI Employee acts like an extension of your team. It responds to leads around the clock, so you don’t miss out when your business is closed. Our AI Employee engages with prospects in a way that sounds human while leading them to solutions. Watch a demo to learn more.
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