Month: April 2022
Building a Successful Sales Pipeline
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 allows you to track the progress of sales opportunities and ensures you take each prospect on the best possible journey to maximise conversion. Keeping track of prospects also means you shouldn’t forget to follow up on leads, and it allows you to ‘qualify’ or prioritise opportunities.
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 a contacts list is valuable information, it isn’t the best way to manage sales opportunities.
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, document or app, 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 on your latest quote?
If you can’t answer each of these questions with a number, you need to re-evaluate your 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 typical stages:
- 1st Contact. This is the initial exchange of information; this could happen via a referral, a phone call or a meeting.
- Appointment. This is where you set time aside to understand their needs and outline your solution. This could be via a phone call, an online meeting or face-to-face.
- 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 on each proposal. Sometimes, 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.
You may find that there are steps you want to add based on your sales experience. For example, you may like to send some introductory marketing between 1st contact and appointment, or your business may typically need two meetings before you can deliver a proposal.
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.
Top tip. At the appointment stage, it is important not to sell your services until you understand their particular needs or challenges. Your time at the appointment stage should be heavily weighted to understanding your customer’s challenges (often referred to as ‘pain points’). It’s important to understand your customer’s pain so you can tailor your sales proposal to directly outline how your services are the remedy.
Create your pipeline today
Today, most businesses have their sales pipeline on a spreadsheet or use a sales tool built into their CRM system. If more than one person is working on sales, having a pipeline that can be accessed remotely will help keep it up to date.
However, if you are a new business or sole trader, 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.
Ultimately, a sales pipeline is only useful if updated and reviewed. Here are some simple ways to help you create and maintain a pipeline:
Free tools like Hubspot and Trello allow you to create digital boards. You can then move each contact through the various stages of your sales pipeline. Here’s an example of what a digital pipeline can look like:
Don’t want to use online tools? Why not use a spreadsheet? Create a list of all your prospects and detail what stage they’re at in your pipeline. You can then use filters and formulas for summarising information quickly.
Have your sales board information prominently displayed in your office on a whiteboard. Then, divide your board into a grid and manually move each contact through the board. 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. 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. This is a great way to keep you sales focused.
The benefits of a sales pipeline
If used correctly, the sales pipeline is probably one of the most powerful sales tools at your disposal.
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 and grow your business.
Likewise, this information can be used to understand how many prospects turn into customers. This will tell you how many prospects you need at the start of the pipeline to make a profit.
How ETC can help
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.
Interested in winning more business and earning more profit? Read our summary guide to creating a winning sales process for your small business.