Goodness, did I have a lot to learn.
The health of a company’s sales pipeline is critical in generating, understanding and predicting revenue. For a small, yet fast-growing company like mine, this affects not only the roles of the sales team but leadership throughout the organization as they seek to pre-emptively forecast capacity and hiring needs. For larger companies, the implications are just as important.
The sales pipeline is one of the most crucial fountains of data that any company has and is an important indicator of the health of the company’s growth engine. To manage it poorly would be unwise.
During these last two months, I’ve spent hours diving into research, evaluating data sets, reviewing platforms, and consuming as much information as I could stomach. By no means do I believe I have mastered the art of pipeline management, but I would love to share a few key insights I have learned from others, as well as a few I have found to be true from my own personal experience.
Without further ado, below you’ll find eight best practices for managing your sales pipeline.
1. Simplify Sales Stages
If it seems obvious, it’s because it is. Yet numerous teams struggle with this tactic. In order to most effectively manage your sales pipeline, and to simplify your team’s jobs as effectively as possible, it’s essential to keep your stages as smooth as possible. There’s just no getting around it!
Changing structures and systems is difficult in any organization – especially if leadership has a “we’ve always done it this way” mindset. But simplification of the sales pipeline is too valuable to brush aside.
With each unnecessary stage, your leads and opportunities are increasingly prone to stagnation and distraction. Not only so, but with extra fluff in the sales process, there is a risk of flawed perspective from the salesperson. What I mean by this is, if the stages aren’t stripped down to accurately align the decision-making process of the buyer with the internal selling process, the salesperson can easily become too caught up in the steps themselves and forget to focus on what really matters – guiding the prospect to move forward. And, as many of us have experienced, prospects tend to pull away with the slightest hint of misalignment.
All of this – stagnation, distraction, and misalignment – translates to lost dollars. And that is a language everyone can understand.
Note: While researching the alignment of sales stages with the buyer’s journey, I found an interesting alternative to the traditional stages used by most companies. The stages were flipped to entirely reflect the stages of the buying decision rather than internal processes of organizations. The model, created by Mark Sellers, is geared more towards B2B companies.
Naturally, I took interest in this given that the company I work for provides SEO, PPC and CRO for B2B companies.
The funnel is called the BuyCycle Funnel, and the stages are as follows:
Another key reason to simplify your sales stages leads directly into best practice number two….
2. Shorten Your Sales Cycle (Within Reason)
As a general rule of thumb, shorter sales cycles are more desirable. They lead to revenue faster, allow for increased sales velocity, and are far less of a headache for everyone involved. Everyone is striving for a shorter sales cycle.
And it makes sense inherently.
People prefer transparency over the obscurity, structure over chaos, and the concise over the drawn-out. But, the length of your sales cycle should never be secondary to the quality of the touches within it. Speed should not be forced upon the sales process, but rather should be a natural byproduct of having your stages simplified to the mere essentials ( Point #1).
In the wonderful world of B2B sales, cycles move at a pace that put glaciers to shame. Speeding up processes, therefore, needs to be done with gentle care. The metric, I believe, should be based on competitive standards.
If we are adopting a different mentality, it’s imperative to always consider what the buyer is experiencing. Then, we must be aware of the fact that they are likely going through similar sales processes with other companies. If we speed up our processes too much, we may begin to seem less credible than our competition and lose valuable trust.
Let me explain. In my case, we offer custom proposals that include a detailed audit of our prospects’ websites and a high-level, tailored solution. This is the next step after our “intro call.”
Typically, it takes a couple of days after the intro call to build out this strategy and present it. If I wanted to speed up the sales cycles just for the purpose of speeding it up, I could put other things on hold and knock out an audit the same day. But, my assumption is that that wouldn’t help. In order to build out a solid game plan and thoroughly understand the search engine landscapes our customers exist in, we must spend an appropriate amount of time doing our research. By the same token, our suggestions and recommendations would doubtfully be taken as seriously with a significantly shorter turnaround time.
Further, if your prospects are exploring 3-4 different companies (which they are), then you might be left with a lengthy “in limbo” period after you’ve completed your proposal and the customers are waiting for other proposals to come through.
It is a best practice to keep sales cycles brief, but only by keeping the stages to the essentials. Don’t overhype speed over the process.
3. Add Value at Each Sales Stage
I cannot stress the importance of value enough. At any point in the sales process, your prospect should know what the next action is, and what they are going to GET from taking that action.
Value is a principle in marketing, as well as in sales, and is rooted in human psychology. I like to think of it as the “exchange factor.” Humans make moves when they see the benefit for them. They are willing to give when they get. Basic stuff.
However, in order to get to the primary exchange (i.e. the sale itself), there must be a pattern of “micro-exchanges” along the way. On an introductory call, the client GETS valuable information about offerings that help them move along in making an educated decision.
In the proposal stage, the client GETS a free audit to help them wrap their heads around their current search marketing tactics. You get the picture. Without a clear understanding of what is to be received at each step, people are unmotivated to move forward.
And unmotivated prospects are lost deals.
4. Analyze Sales Performance by Stage
According to a study by Vantage Point, only 23% of sales managers analyze the efficiency of pipeline movement specific to individual stages when evaluating sales reps’ effectiveness.
What is the sales pipeline if not a sum of all its parts? In order to truly get an understanding of strengths and weaknesses in a sales process, you must be observing from the perspective of stage-to-stage movement, in addition to the movement as a whole.
It is in the granular detail that we see trends for which stages happen to be the most stubborn, which stages the majority of your clients fall off during, or which stages are causing trouble for the cycle as a whole.
In order to make the necessary changes, you need to understand exactly where the breakdown is and what is causing it – something that is difficult if you’re only looking at the cycle as a lump sum.
This granularity in separating stage performance also makes way for the next best practice…
5. Test Everything!
I am a salesperson surrounded by marketers – and I couldn’t be more thankful. If there’s one thing I’ve learned from the team here, it is the understanding of the value of testing. No decision our team makes is ran on a whim.
EVERYTHING is backed in data.
But, in order to accumulate data, we must run rigorous tests. And in order to improve at a steady pace, we need to run numerous and strategic tests. Which we do. All the time.
My goal for myself in this new role is to treat the pipeline with the same level of dedication and professionalism that our clients expect of us. In order to make educated, data-backed decisions, I need to be running rigorous tests as well. Breaking down performance at a stage-by-stage level provides great opportunity to test theories at a smaller level and get quicker insights into the results of those tests.
Currently, I am running a test on the impact of bringing in department directors on my proposals. Last week, I began testing the floor for minimum pricing to find any psychological thresholds at different dollar amounts.
Keep in mind, there is always a test you can run to better your sales efforts. And it’s okay to overlap tests. Many aren’t going to be conclusive after one week. Heck, many aren’t going to be conclusive after a month! However, keep testing so you can keep learning and adjust to find exactly what your targeted audience is looking for.
6. Know Your Numbers
Similar to the running tests is being able to understand and interpret data. Data is the foundation of success in the modern day. As boring as numbers may seem (I’m a right-brained person, myself), you just have to know how to work with them.
What is your lead qualification rate? How long does it take a lead to go from qualification to proposal given? How long does it take a deal to close? What is the lifetime value of an average customer? These numbers are absolutely crucial in understanding and predicting revenue implications from a sales pipeline.
Software companies have caught on to just how valuable this information is, and there are now plenty of choices for sales software to help in understanding and visualizing data. At Directive, we use a platform called Rekener, which has been a solid implementation for us (no, this isn’t a paid plug).
This tool allows us to see the pipeline movement by stage in terms of percentage moved and days required to advance from one stage to the next. We can also see overall “scorecards” for the performance of an account executive based on criteria we tell it to track. Additionally, it shows average close rates and helps us build solid projections for expected revenue won, which is crucial information for the data-driven sales professional.
7. Make Lead Scoring a Priority
In larger organizations, lead scoring is absolutely essential. You can get by without automated lead scoring as a smaller company, but once your leads start flowing from all that SEO you’ve been doing, you’ll want to check out a lead scoring solution.
In the end, all of the sales data in the world will tell you that the most effective sales teams prioritize certain prospects over others. You’re not going to turn every lead into a deal, so why not help yourself out by spending your time where it will make the most impact. For an incredible read on the subject, check out this article by Francis Brero.
8. Monitor Your Activity
Last, but certainly not least, get in the habit of monitoring where your time goes. This is one of the hardest things that I have had to do since starting this job. I consistently felt that the days were vanishing before me, and although the entire day felt stacked to the brim, I could rarely tell you how much of my time was spent where.
It’s a difficult thing to quantify, but time is the backbone of success in any role – especially sales. Without tracking how much time goes where, it is impossible to set benchmarks for activity, prioritize high-impact activities, and truly know where your reps should be investing their energy. Luckily, there are tools to help. A couple I discovered in my research are SuperOffice and Salesmate.
Honorable Mentions – Additional Tips to Keep in Mind
Below, you’ll find additional tips I’ve discovered to be helpful. They didn’t make the official list, but they are definitely worth trying out for yourself.
- Don’t be an island! One of the best ways to maintain consistent performance in your sales pipeline is to get as many eyes on it as possible. Have weekly meetings or daily check-ins with your sales team and review the state of the pipeline together. Take ownership of training all parts of the sales team in best practices throughout all stages to make sure that everyone is working towards a common goal.
- Strongly encourage post-sale follow-up. It’s been proven time and time again, sales reps that keep in touch with their closed deals end up selling more deals in the long run. People change jobs all the time and having a good relationship with internal champions goes a very long way. In my eyes, it should almost be another stage in the pipeline.
Creating, refining, and managing a well-oiled sales pipeline is a battle that is fought daily. However, with a mind armed with data, a spirit ready to test and conquer obstacles, and a team united in a singular pursuit – it’s a battle that pays big bucks to fight.
Author Bio: Jonathan Verstegen – Account Executive at Directive
