Most businesses have a sales process and follow the sales cycle. But does that mean everyone is hitting their targets? Not without building a strong sales pipeline. In fact, research showed that 40% of companies failed to meet their sales goals. In this post, we'll get into what a sales pipeline is, how to manage it, how to measure it and more.

 

Introduction

As a sales rep, understanding the sales pipeline is essential to making sure your sales numbers keep climbing. The basics may be easy enough to understand - get leads, convert them into customers - but there are many nuances that go into each stage of the pipeline. In this blog post, we'll take a look at each stage of the sales pipeline, examining what goes into them and how best to approach each one in order to maximize success. From prospecting and engaging with new prospects, all the way through closing deals and customer retention, this guide will help you develop an effective strategy for navigating your pipeline and meeting your goals.

 

What is a sales pipeline?

A sales pipeline is the journey that a sale takes from initial contact with a potential customer to the point of purchase. It is also known as the sales process but is distinct from a sales funnel. A sales funnel tracks what happens to a prospect along their buyer's journey in the process of converting them into a lead. On the other hand, a sales pipeline in the process then follows a lead on their journey to becoming a paying customer. In other words, a sales funnel is also about tracking leads. The sales pipeline is all about closing deals. The sales pipeline typically consists of several stages, each with its own set of activities and tasks.

 

The stages of a sales pipeline

  • Prospecting: This is the stage where you identify potential customers. Prospecting can be done in a series of ways. Reps begin with market research, perform lead-generation activities, and then perform outreach (e.g., cold-calling, emails, or social selling). Leads can be sourced in a bunch of different ways too in the market research stage. Many businesses also use prospecting databases to get a clean prospect list. A sales engagement platform with an in-built sales prospecting tool is always a plus.
  • Qualification - Before a prospect moves on to the next step, a lead needs to be qualified to determine if they are a good fit for your products or services. Research shows that 67% of lost deals are because of improper qualification. Once qualified, the lead is recorded and becomes an official part of the sales funnel.
  • Contact or engagement : This is the stage of the sales pipeline where you reach out to the prospect and establish initial communication. Once a potential customer has been identified and qualified as a good fit for your product or service, it’s time to start building a relationship. In this stage, sales reps will nurture leads with targeted content and personalized communications in an effort to move them further down the funnel towards a purchase decision. 
  • Meeting Scheduling - After engagement, if the lead sees value in furthering your communication, they would request a demo. At this stage, a rep brings in a product expert or account executive to deliver a customized demonstration.  At the meeting scheduling stage, a rep would also try to involve a decision-maker to move the discussion forward. It's important to make the process of setting up the meeting as frictionless and easy as possible. Platforms like Outplay offer a meeting scheduler that lets reps embed calendar invites into emails to avoid back-and-forths. 
  • Negotiation - The negotiation stage of the sales pipeline involves discussions on price, terms of delivery, features included in the pricing, terms of implementation and customer support among other things. The aim at this stage is to make a profitable sale while ensuring the prospects that they're getting the best deal possible. Once all terms are negotiated, reps usually send out a sales proposal for the decision maker. 
  • Closing -  If all goes well, the final stage is closing the deal and getting the prospect to sign on the dotted line. This is when the sales rep will make their final pitch and negotiate terms with the prospect. It is the stage where you finalize the sale and make arrangements for delivery or implementation.

 

stages of sales pipeline

Looking for a sales engagement platform that helps you prospect, engage, schedule, monitor, track and SELL more from a single place? You should give Outplay a shot.

 

The benefits of using a sales pipeline

Sales pipelines provide sales reps with a clear and concise way to track their sales progress from start to finish and provide visibility. By keeping all of their sales information in one central place, sales reps can easily see where they are in the sales process and identify any potential problems that need to be addressed. Additionally, sales pipelines help sales managers to keep track of their team's performance and ensure that everyone is on target to meet their quotas. In essence, the three key benefits of using a sales pipeline are -

Tracking - A sales pipeline is the best way to gather insights on which deals have the most likelihood of closing, where teams are against their targets and how much more they need to close to achieve them. 

Measuring - By tracking your sales pipeline, you will be able to measure and monitor your team's performance. You'll be able to have visibility on how each team member is faring against their individual targets to decide if you need to intervene with support. Or if you need to revise any of your tactics. 

Forecasting - Having a sales pipeline will help you make projections on expected closures and create revenue forecasts. Forecasting is essential to determine strategy success and for other key business decisions like staffing and resource allocation. 

 

benefits of using sales pipeline

Looking for real-time dashboards with metrics that go beyond the basic sales metrics? Outplay has your back.

 

Sales pipeline metrics

Sales pipeline metrics are essential for understanding the health of your sales pipeline and identifying areas for improvement. By tracking these metrics, you can get a clear picture of where your deals are stalling and take steps to improve your close rate. You can also use them to identify which salespeople are top performers and adjust your commission structure accordingly. Let's break down some of the most important pipeline metrics -

These metrics can help you understand where your team is spending their time and effort, which leads to better prioritization of tasks and better performance across the company. You should be tracking your: 

  • Conversion rates (the percentage of deals that move from one stage to the next)
  • Average sales cycle (the time it takes to close deals)
  • Customer acquisition cost (how much sales and marketing expense it takes to turn a lead into a customer).

 These metrics are the ones that should guide your sales strategy. For example, studying your average sales cycle will help you assess if you need more tools to improve velocity. Studying your acquisition cost will help you figure out what sales and marketing tactics are working, and how you can redirect your budgets.

 

Managing your sales pipeline

The first step in managing your sales pipeline is to understand the stages of the buyer’s journey. The Awareness stage is when the customer becomes aware of their need or problem. In the Consideration stage, they research solutions to their problem and compare different options. And finally, in the Decision stage, they decide which solution to choose.

As a sales rep, you need to manage your pipeline by moving potential customers through these stages. You can do this by creating and nurturing relationships with potential customers, providing them with valuable content that helps them move from one stage to the next, and following up with them regularly.

You can close more deals and grow your business by managing your sales pipeline effectively.

 

Sales pipeline mistakes to avoid

There are a few common mistakes that sales reps make when it comes to their sales pipeline. The first mistake is not having a defined process. Without a defined process, measuring progress and identifying potential problems is difficult. Without a sales pipeline, it's also difficult to manage your time and prioritize opportunities.

The second mistake is not nurturing your leads. Leads need to be nurtured throughout the entire sales process in order to convert them into customers. This means staying in touch, providing value, and following up regularly.

The third mistake is failing to track your metrics. Tracking your metrics lets you see what's working and not. It also helps you identify areas of improvement. without tracking your metrics, you're flying blind.

The fourth mistake is letting your pipeline get stale. Your pipeline should be constantly evolving as you move deals through the stages of the sale cycle. If you let your pipeline get stale, you'll miss out on opportunities and waste time pursuing dead ends.

Avoid these common mistakes and you'll be well on your way to success!

 

Conclusion

Understanding the sales pipeline is essential for any sales rep. It helps to determine where leads stand in the process, what needs to be done next and how long it will take them to close a sale. By keeping track of your potential customers, you can accurately estimate your performance targets as well as forecast future sales trends. As a sales rep, understanding this system is key to success and can make or break a business. Taking the time to research and learn more about the sales pipeline will help ensure that you are successful in hitting your sales goals and ultimately increase profits for your company.

What also helps? An all-in-one sales engagement platform that empowers your team through the sales cycle. Find out why Outplay should be your only choice with a personalized demo.

 

understanding the sales pipeline