What is a sales pipeline?
A sales pipeline is a visual representation of the prospects’ status in the sales process. The sales pipeline shows you how many transactions are expected to be closed in a given week, month or year and how close your sales reps are to reaching their sales targets.
If you have a sales pipeline worth $500,000 in contract value, and your conversion rate, from lead to sale, is 10%, then you can expect to close $50,000 worth of a new deal. If your sales target is $100,000, then you will need to convert twice as many leads.
This is where pipeline analysis comes in. If you can spot improvements in your sales pipeline that will help you move more leads from one stage to another, then you will have more closed deals. And what is the biggest benefit you can get from managing your sales pipeline?
A research conducted by the Harvard Business Review found that there was an 18% difference in revenue growth between companies that defined a formal sales process and companies that didn’t. In addition, companies that mastered the three specific pipeline strategies experienced 28% higher revenue growth!
For B2B sales especially, having a healthy sales pipeline enables you to:
- Optimize your sales process
- Forecast future revenue
- Analyze various sales strategies for your business
- Manage and allocate resources to serve future sales
- Review your current financial progress
- Know how far you are from your sales targets
How to Effectively Manage Your Sales Pipeline in 5 Steps
1. Follow up immediately
Your existing leads may have many options and in order to make a decision, they do need your help. Therefore, follow up as soon as possible after you receive their inquiries or after you contact them the first time. What happens if you don’t follow up right away?
Your leads could fall for other product or service providers, who are most likely your competitors. Therefore, it’s important to note when and what you should follow up on. With the help of a reliable CRM system, you can schedule your follow-ups and check your communication history with clients, making it easier for you to follow up.
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2. Focus on your best leads
One of the most common mistakes is to waste your time chasing a lead who isn’t even qualified to become your customer. When managing a sales pipeline, remember to prioritize your best leads. Those with high value, who are genuinely interested in your product or service, and easy to work with.
3. Routinely monitor your sales pipeline
Don’t let your sales pipeline fall apart. Monitor each lead’s progress. Check whether you are getting closer to your sales target, how many leads you generate each day, how many leads each salesperson handles, how many deals have been closed, and so on. With ClickWork CRM, you can see real time information of your whole sales process in a single view.
4. Analyze your sales process
You also need to regularly evaluate your sales process. This is important to ensure that the sales process runs smoothly and efficiently. You’ll be able to identify the problems that are slowing down your sales cycle and address them early before they get worse.
Is your offer not good enough? Do your sales reps often forget to follow up? Or are you focused too much on leads that aren’t worth pursuing? Having this information will make it easier for you to optimize your sales pipeline.
5. Shorten your sales cycle
The sales cycle for B2B companies indeed takes longer than the sales cycle for B2C companies, but that does not mean you can’t shorten the former. The longer your sales process, the more likely your leads will change their minds.
To shorten the sales cycle, you can reduce the number of days between follow-ups, adapt your quotations to your leads’ preferences to speed up their buying decisions, or make it easier for them to pay, so they don’t feel overwhelmed by the payment methods in the beginning.
Don’t hesitate to try new methods as long as they are realistic and considerate, because you may come up with new, effective ways to make your sales cycle shorter.