While it might seem like a sales pipeline is just another theoretical diagram from an MBA textbook, it’s a lot more than that. Each section of these 7 Best Ways to Increase Sales Pipeline Effectiveness focuses on the part of the sales process, and there are ways in which you can run it seamlessly.
According to Harvard Business Review, companies that define their sales process earn around 18% more revenue.
Therefore, limiting your company’s sales pipeline or following our suggestions to Increase Sales Pipeline Effectiveness is only going to benefit you.
But before we move on to increasing the efficacy of your sales pipeline, let’s take a look at what it is:
What is a sales pipeline?
A sales pipeline is an exercise that visually breaks down your sales process into different sections so that it is easier for you to analyze and optimize each of them.
Every time a stranger turns into a prospect and then into a lead before finally closing the deal, your sales pipeline is in motion. With a promising sales pipeline, you can always define how many prospects are likely to close and how they are divided between your sales reps.
Breaking down sales pipeline stages:
A sales pipeline looks something like this:
➡️ Stage 1: Prospecting
The first stage of the pipeline is devoted to finding new prospects through inbound and outbound marketing channels.
➡️ Stage 2: Qualifying
Your sales and marketing teams qualify available prospects at this stage to separate the warm leads from the cold ones.
➡️ Stage 3: Call and Proposal
The calling and proposal stage is when your sales team follows up on the leads and gives them demonstrations on how the product or service works best for them. This phase is also called lead nurturing.
➡️ Stage 4: Close
The 4th stage is the penultimate step of the sales pipeline when the lead finally makes the purchase decision and becomes a customer.
➡️ Stage 5: Retention
Just closing the deal does not mean much if you are unable to retain your customers. This final stage of the sales pipeline is designed to keep your customers over the long haul.
Now that we have defined what a sales pipeline is and how its different sections work, let’s take a look at what you can do to optimize it better:
Follow up with your prospects🧐
In today’s age of consumerism, all customers have access to reviews, social media discussions, comparisons, and improved customer service.
Buyers have numerous options and often find it hard to come to a decision. Therefore, it is the onus of your sales team to keep following up on leads by adding more value. In most cases, up to 3 follow-ups are crucial to pique your customers’ interest and enter them into the pipeline.
Create a weighted pipeline🏋🏽♀️
How do you decide what your sales team should focus on, especially when you have too many leads in your pipeline?
By using a weighted pipeline. This type of pipeline allows you to determine the current value of a deal by calculating the probability of the deal closing with the actual size of the contract. Too confusing?
Here’s an example:
Imagine you have a prospect named Roy who has already reached the 3rd stage of the pipeline. Now, there is a 50% chance that his deal will close, and the deal’s total value is $100,000. This makes the current value of the agreement $50,000 in the weighted pipeline.
On the other hand, you have a prospect named Calum, who is in the 5th stage of the pipeline, and his total deal value is $75,000. Therefore, his current deal value will be anywhere around $60,000 to $67,500.
With a weighted pipeline, it is easier for your sales team to prioritize based on current revenue rather than running behind bigger deals that have just entered the channel.
Clean your pipeline regularly 🧹
If you want to keep your pipeline clean, then there’s just one statistic you need to keep in mind: 80% of your total revenue comes from 20% of your leads.
This rule will ensure that you do not waste time behind the leads not moving forward in the pipeline. Those are unlikely to convert after a point and are just eating away your time and resources.
Clean your pipeline from these kinds of leads and focus on the more likely ones to close.
Monitor key sales metrics of the pipeline 🔎
Any sales pipeline goes through a continuous process of evolution, and managing it requires a close following of the critical sales metrics in the pipeline.
Here are some critical metrics for your sales pipeline:
✔️Total qualified leads
✔️Customer acquisition costs
Studying these metrics will give you a better understanding of where your sales pipeline needs optimization.
Make sure you read this for more information –
Understand prospect time cycles ⌛
Many times, a customer or lead may be interested in your product but do not have the necessary budget at the moment or are on a retainer with your competitor. In such cases, it is best that you recategorize them to the right section of the pipeline.
Keeping them ahead of the ones that are moving seamlessly will only clog your revenue.
Keep your sales cycle as short as possible 🔁
Depending on your product or service, try to keep your sales cycle as short as possible. A temporary sales cycle will help you use the initial momentum to ride smoothly through the various stages of the sales pipeline.
However, it is understandable that this becomes difficult in B2B sales, where sales cycles can extend up to 9 months.
Try to find out where it can be optimized because a lack in sales velocity will always give the customer more chances to change their minds.
Nurture into the pipeline 📑
Create a separate list of people who are still casual with your product/ service and give them to the marketing team for nurturing. This cleaning will speed up the pipeline and keep your sales team focused only on highly qualified leads who are serious about buying from you.
These are the seven best ways in which you can increase your sales pipeline effectiveness. If you are looking to grow your business and scale fast, book a one-on-one consultation with Nexuses, and we can help you evaluate where your business can optimize to develop more!