The sales pipeline, or sales board, is a set of defined stages that a prospect moves through to become a customer.
An effective sales pipeline will ensure you take each prospect on the best journey to maximise conversion. It also means you shouldn’t forget a prospect, what you need to do with that prospect and when you need to do it. It can also serve as a powerful analysis tool for your business.
If you want to increase sales and profits, you need a sales pipeline.
Do you have a sales pipeline or sales list?
It’s common for the sales pipeline to be confused with a list of prospective contacts. Although this is useful information, alone this isn’t likely to make you money.
Here’s a quick test to see if you have a pipeline or a list of people you’re trying to sell to:
Right now, without opening more than one spreadsheet or document, you should be able to answer these simple questions:
- How many new prospects do you have?
- How many quotes are with clients?
- What’s the value of your last quote?
- How many days until you need to follow-up your latest quote?
If you can’t answer each of these questions with a number, you need to re-evaluate, or create, a sales pipeline.
How to create a sales pipeline
When creating your pipeline, we recommend you start by looking at the stages you went through to secure your last successful sale.
The structure of a sales pipeline can differ from company to company, but here are some of the more common stages:
- Contact. This is the initial exchange of contact information. This could happen via a referral, or through a phone call or meeting.
- Qualification. This is where you take the time to understand the prospect’s problem. This could happen at the same time as the initial contact, but it’s usually a good idea to allocate some time to talk through their specific requirements. It’s also an excellent time to determine if there is a genuine need, they have the budget, and authority to buy in the near future – are they a legitimate prospect?
- Proposal. At this stage, you outline the solution that best fits the prospect’s need and the cost.
- Follow-up. You should always follow up each proposal. It may take several attempts to close the sale. Keeping on top of your follow up schedule will keep your pipeline live and useful.
- Sale (Close). This is where the final negotiations are made and contracts are signed. The prospect is now a customer.
After you’ve written down the stages you need to make a sale, talk it through with someone who knows your business. They can help fill in any gaps or remove any unnecessary steps.
Once you’re happy with your pipeline, start placing each contact on your sales list in these stages.
The idea is to keep the sales pipeline simple, but not void of substance. As a guide, why not refer back to the questions at the start of this article. If your pipeline doesn’t allow you to answer these questions quickly, you may have missed a step.
Create your pipeline today
In a digital world, many people have their sales pipeline on a spreadsheet or use a sales tool built into their CRM system. At an early stage, it’s probably best to keep your pipeline as simple as possible. A complex tool or spreadsheet might prevent you from continually using it.
A pipeline is only useful if its used and continually updated and reviewed. When used correctly, a sales pipeline will increase the number of converted sales, guaranteed. Don’t over complicate it. Here are some simple ways to help you create and maintain a pipeline:
Online tools. Free tools like Hubspot and Trello allow you to create digital boards and then, using your mouse, drag cards through the various stages of your sales pipeline. Here’s an example of what a digital pipeline can look like:
Spreadsheets. Don’t want to use online tools? Why not use a spreadsheet? Simply create a list of all your prospects and detail what stage they’re at in your pipeline. You can then use filters and formulas to quickly summarise information.
Whiteboard. Have your sales board information prominently displayed in your office on a whiteboard. Divide your board into a grid and move each contact through the board manually. This is a great way to feel physically connected to each stage of the sales journey.
Top tip. If you prefer to go down a digital route, we still recommend using a whiteboard. This is absolutely best way to keep you sales focused as its always in front of you, prominently displayed in your office. You can keep the detail on your digital version, but use the whiteboard to remind you how many contacts are in each stage without opening up a document or app.
The power of an effective sales pipeline
The sales pipeline is probably one of the most powerful sales tools at your disposal – if used correctly.
Without complicating your pipeline, adding additional information will allow you to measure sales success and evaluate specific areas of your business.
For example, if you record when you first made contact and when you closed the sale, you can start to understand how long it takes you to convert a prospect to a client (on average). This helps you better forecast and understand how many prospects you need at the start of the year to pay the bills at the end.
Likewise, this information can be used to understand how many prospects turn to customers. This will tell you how many prospects you need at the start of the pipeline to make a profit. You may need to look at ways to improve your conversion if the numbers become concerning.
If you need help creating a sales pipeline, or if you have one and want to get more from it, please get in touch.
If you’re new to ETC, why not contact us for a free new business review? We’ll spend two hours with you, giving you professional coaching and will leave you with actions for immediate implementation.