Building a sales pipeline or sales strategy does not require you to be a professional seller. Unintentionally or not, almost every sale may be mapped to a sales pipeline. This is so because your established sales procedures and techniques will be naturally followed by sales pipelines. And building them is quite simple.
You can even examine a very fortunate sale and make adjustments to your sales pipeline and procedures to make future sales more similar to that one, however, this is not recommended.
Here’s what they don’t tell you:
Sales pipelines are always changing, and always morphing. Creating a sales process is a lot like perfecting a recipe. Every time you implement it, you see what works and what doesn’t and refine it little by little.
What is a Sales Pipeline?
A sales pipeline is the series of ordered steps that a prospect travels through on their journey to becoming a customer. Sales pipelines are defined by stages, which are loose categories that define how the prospect should be interacted with.
Be advised that people conversationally misconstrue sales pipelines and sales funnels. From an operations perspective, a sales funnel is something else entirely.
Sales pipelines vary from business to business, and even from product to product, and are meant to serve as a way of knowing which route is the best route a prospect can take to become a customer. It’s also easy to analyze a sales pipeline and determine which stages need more fine-tuning based on how easily prospects convert between specific stages.
For instance, if about 25% of prospects make it to each next stage, except only 10% make it through the pitching stage, it might mean that your pitch requires some work, or maybe there are other details that aren’t being properly addressed leading up to this stage.
What Are the Stages of a Sales Pipeline?
There is no one right approach to creating a sales pipeline; the number of phases in a process varies based on the industry and the firm.
“Our sales approach is low-touch,” explains ContentStudio’s founder Waqar Azeem. “A deal comes into the sales funnel when a demo meeting is scheduled directly or through trial sign-up. Our sales pipeline consists of six stages: trial sign-ups, sales qualified leads, scheduled demos, on-hold, ready-to-buy, and deal won/lost.
It’s critical to create a pipeline that is optimized for your particular business. Nonetheless, the following sales pipeline steps are probably included in every company that uses a standard B2B sales process:
Before you can sell to them, potential customers need to know your business exists. There are many ways to generate leads for your business; these include paid and non-paid campaigns on social media, research through online searches and LinkedIn, cold calling or cold emailing, or inbound marketing strategies. Typically, sales leaders create an ideal customer profile with certain set parameters and try to reach prospects who fit this profile.
Let’s say you’re running a digital marketing agency that specializes in helping small businesses improve their online presence. Your goal is to find potential clients who are interested in your services. To generate leads, you might employ the following strategy:
Content marketing: Create high-quality blog posts, videos, and infographics related to topics relevant to small business owners, such as “Top 10 Ways to Boost Your Website Traffic” or “Social Media Strategies for Local Businesses.” These pieces of content provide value and showcase your expertise.
Opt-In offers: Created free gated content, like an e-book or downloadable guide. Visitors can access this valuable resource by providing their contact information.
Email marketing: Send out regular newsletters containing valuable insights, tips, and updates related to digital marketing. Include calls-to-action (CTAs) that encourage readers to learn more about your services or request a consultation.
Paid advertising: Run targeted online ads through platforms like Google Ads or social media. Direct these ads to specific landing pages optimized for lead generation.
Referral programs: Implement a referral program where existing clients can refer potential leads to your business in exchange for discounts on your services or other incentives.
Search engine optimization (SEO): Optimize your content for relevant keywords that potential clients might search for. When your website appears in search results, it attracts organic traffic and generates leads.
Cold outreach: Reach out to potential leads directly via email or social media. Personalize your outreach to demonstrate that you’ve done your research on their business and understand their needs.
Qualifying a lead is another way of “finding out if a potential customer will buy.” This is a crucial step in the sales process; you don’t want your salespeople wasting time and energy on a sales prospect who is unlikely to buy. To find the right buyer, you’ll need to find out a few things:
- Can your product solve the buyer’s pain points?
- Can your prospect actually afford your solution?
- Does your contact have purchasing power, or should you be talking to their boss?
A couple of the most common examples of lead qualification methods include lead scoring and the BANT framework:
- Lead scoring: You assign a lead score to each potential lead based on their interactions with your content. For example, you might give higher scores to leads who have visited your pricing page, watched a product demo video, and signed up for your newsletter.
- BANT criteria: You use the BANT framework (Budget, Authority, Need, Timeline) to assess the quality of each lead:
- Budget: You determine whether the lead has the financial capacity to purchase your software.
- Authority: You find out if the lead has the authority to make purchasing decisions within their organization.
- Need: You identify whether the lead’s needs align with the features and benefits of your project management software.
- Timeline: You inquire about the lead’s timeline for implementing a new project management solution.
If the prospect isn’t a good fit, that’s ok. Move on to a prospect who is more likely to make a purchase.
At this point in the sales process, the sales rep attempts to contact the lead in order to better understand their needs. Depending on your lead generation methods, this can look different. Here are some examples:
- Cold calling or emailing: After researching prospects on LinkedIn, your team may make contact with the most promising-looking potential customers by calling, emailing, or messaging them on social media.
- Warm calling or emailing: Using the information from inbound lead generation, your team contacts the prospects using information gathered when the prospects sign up for a gated asset or webinar.
The nurturing stage helps you map your business services against the lead’s needs, but it also serves as a way to start building the customer relationship. The nurturing process begins here.
Schedule a meeting or demo
After your initial conversation, if the customer is interested in your services, a sales rep might schedule a demo or a meeting with the main decision-maker. These steps will help you negotiate the deal and further sell the prospect on your product.
Traditionally, this meant reps would travel to a prospect’s office to demo a product in person, but these days it’s much more common for SaaS products to be demonstrated online. For example, a CRM might be shown to a client during a video conference so the client can see all the new features. There might also be a product expert on the call to answer technical questions about integrations and system requirements.
The lead has expressed interest, they’re a good fit, and the decision maker is willing to purchase from you. Now it’s time to negotiate the deal. During this stage, your team works out the details, including price, services, conditions, and anything else that needs to happen to make the deal work for all parties. During this phase, you might connect the buyer with your help desk to work out software requirements, integrations, and whatever else is needed to make the product work for the client.
This step involves a conversation with a decision-maker who has the authority to make purchasing decisions. It may also involve working with a decision-maker on your end who can authorize deals, discounts or other incentives.
Closing the deal
This is what you’ve been working toward: the final stage in your sales process. It’s time for your rep to ask for the sale.
If the customer isn’t yet ready to buy, don’t write them off just yet. Instead, mark them as ‘nurture’ and check back later. They may be ready in a few months.
How to Build Your Sales Pipeline
Building a sales pipeline from scratch requires some thought, but it may only take a few hours or days. However, thinking through which stages and activities you need to complete with leads throughout the buyer journey is an ongoing process.
Sales cycle length refers to the amount of time it takes for a lead to move from initial contact to a sale.
For smaller deals, a typical B2B sales cycle is around 3 months. For larger and more substantial sales, a B2B sales cycle is more likely to fall between 6 and 9 months. Typically, your sales cycle length will be shorter if you’re selling to SMBs and longer if you’re selling to enterprises because of the number of gatekeepers and processes involved.
Although it requires some planning, the advantages of building your own sales funnel make the expense worthwhile. Here’s how to create a pipeline for sales in six easy steps:
1. Identify list of prospective buyers and stages
As a first step, consolidate all your potential customers into your sales pipeline, and place them in different deal stages, depending on where they are in the buyer’s journey:
- If a salesperson has sent out a promotional mailer to a prospect, that deal is in the initiate contact stage of your pipeline.
- If a prospect has requested a demo of your product, the deal is in the scheduled demo stage.
- If a prospect has shown a willingness to buy, has responded to your emails, met your salesperson, and is discussing, that deal is in the closing the deal stage.
Identifying which stages each deal is in helps you visually categorize your sales opportunities.
2. Assign sales activities for each stage
Do you know which sales activities are likely to move your deals to the next stage of the pipeline? Sales activities are the specific actions taken by your salespeople to make a sale. These include
- Sending emails
- Making calls
- Tracking email metrics
- Following up with a lead
Sales activities are most effective when they are done during a specific stage of the sales process, but many sales teams scatter their activities across different stages of the pipeline. Organize your activities by assigning them to certain reps at different stages of the sales process. That way every salesperson knows exactly what they are supposed to be doing at every stage of a deal.
3. Define sales cycle length
Your sales pipeline is heavily dependent on your sales cycle and how quickly your salespeople close deals. The length of a sales cycle depends on a number of factors, and often varies, based on the following factors:
- Complexity of the product- The more complex your product is, the longer the sales cycle tends to be. With complex products, multiple people and teams are often involved in the sales process in order to help the prospect understand the product.
- Customization: If your product requires customization, the deal will likely take longer because your team will have to tailor the product to your customer’s requirements.
- Source of leads- What’s your sales strategy? If you rely on outbound sales techniques, like cold calling and email marketing, your sales cycle will typically be longer than a company that relies on inbound leads.
By fine-tuning your product delivery, lead sources, and sales engagement, you can control your average sales cycle length.
4. Decide the ideal pipeline size
Knowing how many deals are in your pipeline (and finding the ideal pipeline size) is critical for achieving your sales targets and meeting your team’s revenue goals for the year.
You can determine your ideal pipeline size by working backward: figure out how many deals your team needs to close for the year to hit your target. (Going after the target is not enough, as many deals rot over time, and may not convert to a sale. In fact, an estimated 24% of forecasted deals go dark.)
This might look something like this:
- Your team needs 50 deals to close every month in order to hit your revenue targets.
- For every 50 deals your salespeople pursue in a month, 10 or 12 deals may become stagnant over time.
- Therefore your team should pursue 70 deals every month instead of 50 to realize your sales goals.
You can use that information to determine monthly or quarterly sales targets for all your salespeople by dividing quarterly revenue by average deal size.
5. Remove stagnant deals from the pipeline
Unlike wine, deals don’t age well. As time passes, the likelihood of winning a deal diminishes, and the deal is likely to rot in your pipeline.
A pipeline full of rotten deals can distract your team from the opportunities that are likely to close. For this reason, you should keep track of the age of your deals; any stagnant deal that exceeds your sales cycle length should be on your radar. Check-in with the prospect one last time, and then remove it from the pipeline.
This process will help you clean up your sales pipeline by getting rid of old deals that are unlikely to convert. It helps to have a CRM that automatically alerts your team to stagnating deals.
6. Define your sales pipeline metrics
Sales pipelines are great visual aids for sales managers to track and monitor their salespeople.
Pipelines constantly change, however. Monitoring specific sales metrics can help track the health of your pipeline on a regular basis. Tracking sales pipeline metrics on a regular basis will help you identify how many deals your team needs to bring in to meet targets and earn profits for the year.
It’s up to you and your team to determine whether your pipeline is working or not. Analyzing sales results is helpful, but it’s also important to consult with your sales reps to determine which pipeline stages are necessary.