Imagine a sales world where every customer came to you already interested and ready to buy your product. Your sales would go through the roof! Wouldn’t that be great? Unfortunately, that isn’t how it happens. You have to reach out to potential customers to meet your sales goals. Some leads are more interested than others, some are more ready to buy, and some will take longer to nurture and make a decision. All these types of leads make up your sales pipeline, and it is crucial that you know how to deal with each one.
What is a Sales Pipeline?
First, let’s take a look at what exactly a sale pipeline is. In his article, 5 Best Practices for Managing Your Pipeline, Sales Hacker’s Matt Smith defines it this way, “The sales pipeline/funnel is a visual representation of all your team’s open opportunities.”
In other words, your sales pipeline is a tool that tells you exactly where each customer or lead is in the sales process. This simple concept can be complicated in practice because there are many sales steps involved, each lead has different business needs, and the timelines and buying readiness are different for each prospect.
It’s likely that your organization is already using some type of sales pipeline for managing leads through the sales process – contact, opportunity, and ideally, on to a sale. The stages that you define for this process are important. Having too many stages wastes valuable time; having too few stages is too rushed and can make sales reps seem pushy (which is off-putting to most people).
You have to decide how many stages, and which ones, are right for your company. But based on best practices, 5 or 6 stages works successfully, and they usually include:
- Initial Contact – This can be a cold call from a leads list, a phone call or website inquiry from a potential customer, or a referral.
- Qualification – This stage is used to find out if your product or service is right for the lead, and vice-versa.
- Meeting – In this stage, the rep presents the product or service to the lead and discusses it will provide solutions for the lead’s company.
- Proposal – Leads are provided with a detailed proposal that outlines why your product is best for them and how exactly it will be implemented. It is during this stage that reps will get the best indication of whether the lead will result in a closed deal.
- Closed Sale – The lead becomes a customer in this stage, by buying your product or service.
Identifying Sales Readiness of Leads
Leads are not created equally. You likely already know that some are more ready to buy than others and that the sales approach has to be adjusted depending on how hot or cold the lead is. How you classify your leads in terms of sales readiness makes a difference in your overall closed sales, but it isn’t always an easy task. Jenna Puckett at Technology Advice writes in a blog post, “Depending on the size of your marketing program, a lot of work can go into defining how to accurately categorize and sort individual leads.” But it is a task worth doing.
Some companies sort their sales readiness by using three different pipelines – cold, warm, and hot. Those categories determine who makes the initial contact (sales rep or account manager), and how much time and work are put into nurturing the leads.
Defining the sales readiness of each lead is important because you don’t want to spend a lot of time on a lead that is unlikely to buy. You also don’t want to spend too little time on prospects that are likely to buy but are just taking a little longer in the sales process. It comes down to finding the right balance, and categorizing leads can help you find that balance.
Tips for a Successful Pipeline
The following are some tips for you to consider as you define your pipeline stages and the sales readiness of your leads:
- Automate what you are able to – email reminders, etc.
- Define your pipeline stages clearly and the sales activities that they each contain
- Take the right amount of time with each lead depending on their sales readiness.
- Gather as much information about each prospect as you can. The more you know, the better you can help them, and the more likely a closed sale will result.
- Use a Customer Relationship Management (CRM) solution that will save your reps time and streamline your pipeline management.
- Review and reevaluate your pipeline stages periodically to see where you might need to make adjustments.
Sales pipelines are fluid and ever-changing. There are internal and external factors that can cause shifts (from minor to major) in converted sales. In order to weather those changes, you have to have a well-defined, but adaptable, pipeline management process that works for your company. Following the tips above, and identifying and defining the sales readiness of leads and acting accordingly, will no doubt help you reach your goals and improve your company’s bottom line.