The sales pipeline starts at the first moment a business comes in contact with a prospect or sales lead. The pipeline process doesn’t come to an end until that prospective customer closes into a sale.
Managing the sales pipeline is an essential part of successful selling; sales teams must have a plan in managing their sales pipeline process. Pipeline management goes a long way in forecasting future sales figures, and helps salespeople document how far along their sales leads are in the sales pipeline.
Some businesses think they have an effective sales pipeline, but even implementing small changes to improve the pipeline process has the potential to grow top-line revenues substantially. We’ll walk through the sales pipeline and stop at each step to ensure businesses are effectively managing their sales pipelines.
The pipeline process is not hard to comprehend, but it can be difficult to generalize, as each sales team manages their pipeline differently. To sum up the pipeline process from our experience in sales, we thought we would break the pipeline into five steps. Each step is very important, but you can see above that it’s step number five that makes a business money!
1. Sales Lead
This is where it all starts, acquiring a sales lead or a prospective customer. The sales pipeline begins from the moment a business first interacts with this lead. As businesses already know, leads come in a variety of different ways. To make it easier, we will just look at leads as either inbound or outbound.
An inbound lead is a prospective customer who has reached out to a business, not necessarily personally. They could have downloaded content, looked at a landing page or shown engagement on social media. No matter how, an inbound lead can be classified as a prospective customer who’s shown interest in a business.
An outbound lead is somewhat the opposite—a prospective customer who a business has shown interest in selling to. The lead may not even know who that business is, but they are a qualified lead nonetheless.
You guessed it, inbound leads are usually easier to sell to. Regardless of inbound or outbound leads, a sales team can’t afford a “leaky” pipeline, or in other words, to lose these leads.
- 79% of marketing leads never convert into sales. Lack of lead nurturing is the common cause of this poor performance. (MarketingSherpa)
- 61% of B2B marketers send all leads directly to sales; however, only 27% of those leads will be qualified. (MarketingSherpa)
- Just 56% of B2B organizations verify valid business leads before they are passed to sales. (MarketingSherpa)
These are all alarming statistics, especially because marketing teams are spending a lot of time and money generating leads. Sales leads often go to waste for many businesses; both marketing and sales teams must collaborate in order to bring the best quality leads.
Marketing teams must be sure that the leads they are providing sales teams are with market qualified leads, or MQLs. Of course, not every lead that is market qualified becomes sales qualified, but it’s important to do some screening before a salesperson wastes their time with an incompatible lead. If marketing teams provide better quality leads, the 79% of leads who never convert in sales will surely decrease.
2. The First Sales Call (Personal Contact)
The reason we don’t label this section as “contact” is because it takes more than just sending an email to a prospective customer to gauge their interest. A business has likely sent an email already, but emails don’t connect with prospects like people do. Customer interest is often sparked from personal contact, and likely a sales call in order to move them forward in the pipeline.
The first sales call is a friendly introduction from salesperson to prospect, nothing more than that. Getting to know your prospective customers is important, and the salesperson will understand whether or not they are fit to move forward in the pipeline. Sales calls give both the prospective customer and the salesperson an idea of whether or not the deal will work.
- Businesses rely too much on emailing for lead nurturing. Although emailing is efficient in reaching many prospects, sometimes this can be an ineffective way to progress a prospective customer further through the pipeline.
- The average business person sends/receives 115 emails per day. If a business only relies on emails to reach out, they run the risk of getting ignored or lost in a cluttered inbox. (SalesForce)
- One study proclaims that email marketing outreach had a response rate of .03%, which was much lower than the telephone based response rate at 8.21%. (SalesForce)
Leads are going to leak from the pipeline if a business doesn’t personally reach out. Emailing doesn’t always cut it.
The solution here is pretty simple: don’t give up on the power of phone calling and personal interactions. A sales call can be a very important step in the sales pipeline in order to engage a prospective customer and grab their attention. Emailing has become widely used in business, but if businesses simply rely on emails for outreach to leads, they will lose some of their sales leads. Make a sales call, be persistent and get on the phone with prospective customers in order to advance the prospect to the next step in the sales pipeline.
3. Presentation or Meeting
A business has already gotten a prospective customer on the phone, introduced themselves and it looks as though this lead is interested. What to do now? A business must get this prospect in on a meeting or presentation in order to fully display what they offer in the sale.
Presentations are the point in the sales pipeline where a deal is either won or lost. A great presentation essentially wins a prospective customer over, and brings them very close to closing the deal. A bad presentation likely means you are never hearing from that prospect again, and they are no longer interested. You CANNOT close a deal without a good presentation or meeting beforehand.
Bad sales presentations can jeopardize all of the work a business has done to get a sales lead to this point.
Well known business author Colleen Francis writes an article on The Top 9 Sales Presentation Mistakes, and we summed up what is most important:
- Be punctual: A business does not show a prospective customer any respect if they arrive late to a meeting or rush into the presentation. A business must show their sales leads that they value their time and interest.
- Don’t just read slides: A business must know what they are talking about, simply reading the slides implies that a business doesn’t know their material and have come under prepared. Once again, a sign of disrespect for time and interest of the prospect. Sales professionals must know what they are presenting, slides should be short and bulleted to highlight talking points.
- Slow down: Lastly, don’t rush a meeting. Businesses must be aware of fast talking—not only is it hard to understand, but it also might give off the impression that a business has somewhere else to be. A presentation should never be rushed, and should always accommodate the schedule of the prospective customer.
For more sales presentation mistakes to avoid, check out Colleen Francis’ article in the above link.
The solution can be said simply: give better sales presentations. However, we know that it isn’t that simple, so check out 5 Useful Tips to Improve Your Sales Presentation to Seal the Deal, which outlines tactics that will help a business nail their next sales meeting. Better presentations add up to more closes, more sales and more top-line revenue.
This step in the pipeline is usually pretty short, the “follow-up” stage. A business wants to give their prospective customer a bit of time to think after a sales presentation, but not too much time that they lose interest or forget about what a business is offering them.
Usually, a salesperson will give their sales lead a day to think and then contact them the day after the presentation. This way a company is not being too pushy, but they are also not neglecting the follow-up for so long that the client is losing interest. A follow-up is a polite way of saying “When are we going to close this damn thing already?”
Obviously a sales team will never relay their message across quite like that, but I am sure many sales teams think that. When following up be sure to:
1. Thank the prospective customer for their time
2. Make sure they are still on board and interested
3. Suggest moving forward to closing the deal
The follow-up and the close go hand-in-hand in order to move the prospect through the last stages of the sales pipeline. Usually a follow-up involves closing the deal, but sometimes a prospect may want more time before a deal is closed. Always give the customer what they want, but closing the deal sooner is always better than later.
5. Close the Deal!
If a business has made it this far, congratulations, the hard work is almost over and you can close the sale! Closing the sale is not only a reward for all of the hard work during the sales pipeline, but a business has just beat some extreme numbers working against them. According to Sirius Decisions figures, 90%of all leads never result in a close (Webpower).
As we look at stopping a leaky pipeline, we hope that our tips can decrease the 90% of leads that aren’t closing and help more businesses get to this glorious fifth step in the pipeline. The sales pipeline is a long and grueling process for many businesses, and it’s stressful losing leads throughout the sales process. Use these tips, improve your sales pipeline, and see more top-line revenue.