Successful entrepreneurs understand the importance of generating a continuous stream of leads and turning those leads into customers. This is how your business grows. The amount of time it takes to turn a lead into a customer will depend on the service you are offering, and the price of that service.
Sales professionals generally visualize customer acquisition through the stages of a sales pipeline. Sales strategies can be applied at each stage of that process to help turn a qualified lead into money *ahem* a customer.
Understanding how your sales pipeline is working is vital if you want to optimize your revenue generation. A robust sales pipeline will give you valuable insight into anticipated revenue, cash flow, process bottlenecks, resource gaps, and overallocation. In this article, we’ll look at seven stages of a sales pipeline every entrepreneur should understand.
Prospecting is the first stage of a sales pipeline. During the prospecting stage, you collect leads and record their contact information. You might generate these leads through activities such as email marketing, social media campaigns, PPC campaigns, in-person events, content marketing, cold outreach, or other approaches.
There are some obvious levers for growth in this stage of the sales pipeline. They are:
- Basic Targeting: understanding who you are targeting and where you can find leads
- Sales Channels: determining which is the most effective sales channel to acquire leads
- Conversion Rate Optimization: improving the messaging you use and your approach to push more potential leads into your sales pipeline
There are too many variables at play for me to provide you with much useful information about those first two points. Fundamentally, you will need to research the customer journey, create a customer persona, and track leads down your funnel by sales channel.
In the digital marketing space, the simplest way to generate warm ready to buy leads is to offer a free consultation. You can use a landing page builder to create a suitable landing page.
It’s simple but effective.
You can take this approach to the next level by setting up retargeting ads across FB, Google Ads, or Youtube, that pushes these prospects to a landing page where you offer a content upgrade. This will help you increase your lead acquisition volume by targeting people who might be interested in making a purchase but aren’t ready now.
Below is a basic overview of an effective funnel for the prospecting stage.
If you’re serious about applying this approach, I recommend you buy the book Sell Like Crazy, by Sabri Suby. It’s an easy read and covers the theory in a lot of depth.
Once you have your leads, it’s essential to manage them efficiently. You can do this manually, but that is time-consuming and puts you at risk of missing an opportunity due to human error. Therefore, I recommend you use an automated tool for your CRM.
2. Lead Qualification
During the lead qualification stage of the sales pipeline, you develop a relationship with your leads and segment your leads according to quality. You can partly automate this process with an email drip campaign.
A drip campaign is a triggered sequence of automated emails aimed at achieving a specific result. A simplified email drip sequence would look something like this:
- Introduce who you are and what you offer
- Explain how your product or service can benefit the lead
- Give a case study that proves the quality of your product or service
- Pitch for a consultation
With email marketing, the two main levers to prompt action are logic and emotion.
If you’ve never set up an email sequence before, set aside a bit of time to research Frank Kern and Ryan Deiss. Both marketers made their millions through email marketing.
A nice example of an effective out of the box email sequence for sales is Gain, Logic, Fear.
Most of the time, the email drip campaign alone is not enough to move a lead down the pipeline. Therefore, it’s essential to combine email marketing with other sales channels to nurture the relationship. Events and webinars are the best way to nurture your relationships at scale.
If you’re going to use webinars during the sales pipeline, set $5 and a weekend aside to read Expert Secrets by Russell Brunson. The book is a masterclass on how to run sales webinars.
3. Meeting Prospects
Meeting prospects is an important step on the path to a conversion. Precisely what this stage looks like will vary depending on your company and the prospect’s preferences. Some people like to meet face-to-face. For others, a phone or video-call is better. Webchat, perhaps with a live demo of your product, are other options.
Whichever method you choose, this is the stage where you’ll explain your product or service in detail, and highlight the benefits of purchasing it. If your prospect has sales objections or questions, this is where you get to address those.
If your prospect seems receptive and ready to seriously consider a purchase, this is also the point where you can try to cross-sell or upsell your product or service, perhaps by offering an additional feature or an extended subscription.
My article on Mailshake outlines useful tips to follow to ensure success in a sales meeting:
- Get them to take action. You should get your lead to complete some activity before the meeting. This could be something like answering a questionnaire to explain their budget and needs.
- Do your research to make sure you’re fully prepared for the meeting. If you’re meeting a company representative, research their organization. Having a degree of familiarity with your prospect will make the meeting go more smoothly.
- Set the agenda. Make sure you have an agenda in place for the meeting. Even if you don’t follow it, an agenda helps ensure that you are never lost.
- Sell their goals. Don’t focus too much on the process; instead, talk about the result. Ultimately, this is the thing that the potential client cares about the most.
- End by clearly setting out what happens next. You should agree whether you’ll send a proposal, arrange another meeting, or make a follow-up call in a week.
It’s important to remember that you don’t have to accomplish everything in one meeting. You might close a sale in this first meeting, of course. But more likely, you’ll grow the relationship with your prospect, hopefully moving them to the next stage of the pipeline.
4. Making a Proposal
Making a proposal is more than just sending the prospect your standard product menu and price list. It must be bespoke for each potential client and focus on their needs. You should know enough about the prospect to have a strong sense of what their pain points are and how you can help.
Keep your proposal as concise as possible, but be thorough. Focus on the outcomes and objectives, and make sure the number of deliverables you offer aligns with the price. You want your prospect to be excited about what your offering can do for them. For example, it’s the number of people they can reach with your email marketing tool that matters, not the product itself.
If you are providing a service, offer at least three price options to a potential client. Providing multiple price options gives the appearance of choice – even though most customers inevitably choose the middle option. A price offer allows you to also stack your preferred choice to make it appealing to leads.
“Your business proposal needs to focus on the clients’ goals, and provide sufficient evidence that you are qualified to offer the service. If the lead believes in your ability to deliver, the cost of your service will never be the defining factor in you winning or losing the deal.”
Sujan Patel, founder of Voila Norbert
Your proposal can double as a contract. Include a field where both you and your prospective client can sign. Having a contract protects both you and your new client by ensuring that you are both aware of your obligations and bound by them.
If your prospect accepts your proposal, you can skip this stage. But if they come back with concerns or questions, it’s time to negotiate.
Effective sales negotiation is a skill. Negotiations should be based on mutual respect, meaning both parties should be on equal footing and operating in good faith. It’s not about getting what you want at the expense of the other person, but about coming to an agreement where you both win.
Let them tell you what they’re looking for and what they would like to change in your initial proposal. Remember, the cost of a product or service is rarely the main factor in a negotiation. Instead of negotiating on price, I recommend you discuss deliverables.
Although there are rules to follow when negotiating, consider the advice of Harvard Business Professor Michael Wheeler: you can’t always script the process. Sometimes, even if you’re a stickler for the rules, you don’t get the results you want. So what’s the solution? Follow the rules while they work for you, but be ready to throw them out of the window if needed.
6. (Not) Closing the Deal
You and your prospect have come to an agreement. You now need to sign a contract detailing your obligations to one another, including the price and when payment is due. Once both of you have signed the contract, it’s time to PARTY :). To speed up the process, you can use a handy signature tool.
If your prospect rejects your pitch, though, don’t lose hope just yet. It might be time to go back to the negotiating table. How you come to an agreement will depend on their objections.
Sometimes you won’t be able to compromise. If this happens, don’t lose hope, and don’t cut them loose. Continue nurturing your relationship with the prospect. Send them back to phase two of the seven stages of a sales pipeline.
Once the contract is signed, you need to focus on delivery. A good entrepreneur knows the importance of customer care even after your new client has made a purchase.
If you’re selling services, schedule an onboarding meeting immediately to ensure your client is happy and has all the support they need. If you’re selling products, arrange to call and check in, asking if they’re satisfied with their purchase or have any concerns.
You can also use this stage to cross-sell or upsell your client on new services and upgraded solutions. Remember this golden rule: it’s much cheaper to retain an existing customer than to acquire a new one.
If you give a fantastic customer experience, you can be assured that your client will spread the good news about you to others in their network. Word of mouth is a powerful marketing tool.
The Key to a Successful Business
If you want to be successful in your business, getting your sales pipeline process right is critical.
A study by Harvard Business Review showed that companies with an effective pipeline management system enjoyed an average growth rate of 5.3, this is a 15% higher rate of growth than companies without an effective sales pipeline management strategy.
The same study found that companies that mastered three specific pipeline practices saw a 28% increase in revenue growth. So remember the crucial steps:
- Identify leads and get their contact information.
- Weed out those who are not interested in what you’re selling.
- Set up a meeting and prepare for it well.
- Make a tailored proposal that directly addresses your prospect’s needs and pain points.
- Be prepared to negotiate to find a deal that works for both of you.
- Seal the deal and sign the contract. Don’t abandon the prospect if they’re not quite ready to buy yet!
- Maintain a high standard of customer service after the sale.
Sales pipelines give you a better understanding of the sales process, allowing for more efficient and effective sales strategies. If entrepreneurs take advantage of this, they can improve their relationships with prospects, drum up sales, and be a step closer to achieving their goals.