What is the sales pipeline? Simply put, your sales pipeline is the amount of business you attempt to close in a given month, quarter, or year. It is usually presented as a spreadsheet or in a CRM system that tracks all of the business you or your sales force has pursued. As time passes, you can begin to track what share of sales you close. If that share is consistent, you should be able to forecast sales with greater accuracy.
You will also glean information on where you or your sales team falls short: For example, is your conversion rate low, or are you converting plenty of customers, but only getting a small share of their total business?
Your first step is to identify an account’s total budget, the likely length of the sales cycle, and the key decision-makers. If you or your sales people are not trained and managed to establish these three critical pieces of information, then the pipeline will continually be over-optimistic. In a worst case you will spend all your time writing proposals for unqualified leads, the whole time being certain that the deals will close any day.
Of course, it’s not always so easy to gather that information from prospects without sounding pushy. So start to think about how you speak with prospects. For instance, asking “Are you the decision maker?” will often alienate a prospect. Instead, use a softer approach, such as “We find that with this kind of purchase, decisions are made by a lot of people on the executive team, and the process of really understanding your needs goes smoother if I can gather information from everyone.”
Similarly, a prospect reluctant to discuss budget may be coaxed into giving up a number when offered a range, such as “our packages start from £100 per month up to £1,000 per month; where are you most comfortable?”
Finding the Magic Metric
Many organisations will focus on sales numbers, however a key driver of lead-to-sale conversion can be the time it takes to respond to the customer.
Industry data indicated that leads receiving a call-back in two minutes or less were four times as likely to convert to sold as an average lead. So start measuring response times at your company and get the balance of contacting new leads and nurturing existing.
As customers enter the sales funnel, most businesses will offer free advice in order to help the prospect make an informed decision. For larger customers whitepapers work better as they are more likely to spend more and ask more in depth questions so have something to hand which you can mail out. Dangle the carrot, give a little something and you’re on your way.
If you don’t consistently measure the factors that turn leads into sales, you’re shooting in the dark. For instance, measure the cost vs. quality of leads. You might have one source where a lead costs you £500, but closes at a higher rate than the ones that cost you £100. You want to know that so that your salespeople spend more time with high-quality leads.
You can also measure the number of calls per day that reps make, and the number of “nurture points” — such as e-mails and follow-up calls — as leads turn into opportunities.
Don’t take no for an answer as no doesn’t mean no. If your database is targeted and relevant then it usually means not right now. In business, things change every day. People change, too. When you are told no by a prospect continue to follow up and work this prospect forever.
There is however a fine line. You should stop short of driving prospects nuts, but continue to follow up at regular intervals. You will experience instances where you were first told no only to end up getting the same business 12 months later.
One of your biggest deals could come from communicating with the prospect over a year and making more than 100 phone calls to get to a contract. Most of those calls may not be answered, however if you give up then you will not have converted into a lead.
Celebrating your wins is crucial to keeping you and your sales team sane. Larger organisations will have sales reps report on their wins and losses at weekly pipeline meetings and, about once a month, they do a deeper analysis of a juicy deal that got away from them. The company may send a questionnaire to sales leads that did not close, and follows up with an interview.
The data would be analysed and reported back through the sales organisation. Why not try taking a leaf out of their books and introducing your own sales pipeline process and systems.