Sales pipeline management: A 7-step plan

January 17, 2019

The basic idea of sales pipeline management is to estimate the upcoming sales you’re aiming to close.

Without proper pipeline management, you could be missing profitable opportunities. Do you know how many qualified leads are actually converting? Have you overlooked deals that are now lost? How many deals are actually worth pursuing?

Over time, poor pipeline management can also cause inaccurate sales forecasting, which affects critical planning information such as resource allocation and budgeting. Revenue growth can suffer as a result.

As you can see, an inaccurate and poorly managed sales pipeline can eventually lead to the self-destruction of a business.

sales pipeline management

Granted, before you can properly manage your pipeline, you need a standardized sales process that includes a set list of steps for each pipeline stage and a definition of your ideal pipeline size. Ensure that a formal process is first in place to keep all sales reps on the same page.

That said, here are seven steps you can follow to create an effective sales pipeline management process:

  1. Find your prospects.
  2. Determine the real potential.
  3. Identify decision makers.
  4. Follow up.
  5. Measure results.
  6. Analyze results.
  7. Update your pipeline.

Creating the sales pipeline

1. Find your prospects.

sales pipeline management

Before we can talk about pipeline management, you need to create a lead pipeline by finding new prospects. Just remember that the focus needs to be on the quality of leads you are bringing in rather than on the number (review your buyer personas if needed).

In addition to cold calling and emailing, here are a few ideas for finding new prospects:

  • Lead capture forms: A lead capture form gives you the ability to capture information from prospects who visit your website and want more information. Sell gives you the ability to create and embed lead capture forms to display on your website and Facebook page.
  • Social Media: Interested people will often reach out on the company Twitter or Facebook page to ask questions about your business. Use this as an opportunity to provide assistance and determine whether they are worth pursuing. You may also use these platforms to reach out and message individuals you believe would be the right type of client.
  • Content marketing: A content strategy aligned with sales is an excellent way to generate interest and attract new prospects. Related blog articles, ebooks, and thought-leadership pieces are all educational and provide a platform to capture reader contact information. Connect with the marketing department on developing this type of content.

Sales prospecting does not have to be difficult. Just make sure that a clear sales-prospecting strategy is also included in your standardized sales process.

2. Determine the real potential.

sales pipeline management
This is your qualification step. To begin, obtain critical information from the prospect, including potential total sales dollars and volume for a specific period (weekly, monthly, annually, etc.). Remember, there’s no room for estimation here.

There is no doubt that a current client or a prospect has more accurate information about how much their company can spend on your product/service. This is also an opportune time to determine a client’s relevant purchasing policies. Think about the following questions:

  • Is the client prohibited from buying all of the product from one supplier?
  • On a monthly basis? Annual basis?
  • Are the client’s purchasing decisions based solely on price?

Collect every bit of information that can affect whether a client can or will buy from you. Don’t forget to check your gut either: While a prospect could be walking the walk, try to really gauge their intent to follow through. How responsive is the prospect? Do they get back to you right away, or are they quick to disappear? How serious is the prospect?

Figure out objections early to have a more accurate sales pipeline later.

3. Identify decision makers.

sales pipeline management
In some cases, your contact may be the decision maker. But many times, purchasing decisions may be made by key executives, based on the following:

  • Price
  • Volume
  • Volatile market conditions
  • Other reasons specific to their industry

Asking your contact about the key decision maker(s) can be an awkward conversation that may not help you in the end. Try softening your approach: Let the client know that this purchase would represent a significant expenditure for your company and would need executive approval. Once you’re on topic, ask if that’s their policy, too.

Don’t forget to ask for any purchasing directive the executives have provided; that can be a huge asset.

Sales pipeline management

4. Follow up.

sales pipeline management

Follow-up is critical to close on any request for business and can be as simple as this:

  • Send an email to thank them for their time and summarize next steps.
  • Call to see whether the lead is still interested.

Document all follow-up actions you agreed to complete for all clients and prospects in your CRM; make sure to add a description of the action required, a contact name, and an estimated date of completion for each action item. Then track and complete these actions accurately, totally, and within the agreed time frame.

Make sure to immediately follow up on any urgent issues, requests for a quote or, perhaps most importantly, the first call from a potential client. During this period, be aware of other potential sales offered to a client, and learn their hot buttons.

5. Measure results.

sales pipeline management

For each prospect, track and measure your successes (and failures). Tracking the results of your sales pipeline — especially in a CRM — helps with accurate sales forecasting later on and gives a better idea of future revenue. You should be reviewing metrics that give you an idea of pipeline health, sales activity, and stage conversion rates.

Here are a few examples of important metrics to track:

  • Win rate
  • Lead to qualified opportunity conversion rate
  • Average sales cycle
  • Sales velocity

Sales velocity is a key metric. Combining conversion rate, average deal size, sales cycle length, and number of opportunities, this metric looks at how fast leads go through your pipeline and how valuable they are to your business. Sales velocity helps you determine what pipeline stages need attention and how you can quickly close more deals.

Note: If you’re a Sell customer, you can use our stage conversion report to identify sales stage conversion rates for each of your team members. It lets you compare your reps’ performance in each stage and discover their strategies. For example, you can see who is a qualifier and who is a closer. This is also helpful for learning where your sales reps need improvement.

6. Analyze sales pipeline reports.

sales pipeline management

This is the review stage to see how efficient and effective your sales pipeline management process is. Check the data to determine which processes are working and which are not. Repeat the path that has earned sales. Stay away from the actions that lost sales. Answer these questions:

  • At what stages are deals getting stuck?
  • What are the current risks, based on the data?
  • What specific ways can we improve our opportunity conversion rate?
  • How frequent are our follow-ups?

Plan to review data regularly. Always look for opportunities to make improvements to your strategies, and put those techniques into action. Share the “dos” and “don’ts” with your sales force; that could mean updating your standardized sales process.

7. Update your sales pipeline.

sales pipeline management

You need to regularly clean your pipeline to ensure that opportunities are high quality. Too often, there is a clutter of leads that aren’t actually worth pursuing or have gone over the average sales cycle. And disorganization can cost you future sales. This means you need to consistently audit your pipeline. Ask yourself specific questions to see if your pipeline is clean:

  • Are there any bottlenecks (stagnant leads)?
  • Are there dead or low-opportunity leads I can remove?
  • Are there any communications that need updating?

Also ensure that opportunity contact information is up to date, or gather this info if needed. Your CRM should help with that. If there are any significant problems, you may need to review your pipeline stages and what each is designed to do.

And don’t let it all pile up: Make it a priority to clean your pipeline either daily or weekly. Everything will be more accurate, and you won’t be overwhelmed at the end of the month.

A smart business will create and track clients and prospects in their sales pipeline. And the smartest way to do that is with a CRM application like Sell, where you can track your information by month, quarter or year, eliminating the need for those endless, repetitive spreadsheets. With a CRM, you can measure the sales dollars and closure rates of potential sales identified by your team and then analyze these results to help you manage and, most importantly, enhance your sales pipeline.

Properly developing, tracking, managing, and analyzing your pipeline can directly increase sales and build your business. What are your tips for effectively managing the sales pipeline? Let us know.