Clinching a sale is the climax of all business efforts.
It all starts with building a relationship with a total stranger from scratch. To do so, you must build a strong sales pipeline to progressively turn a skeptical prospect into a raving customer.
That’s no easy feat, but it can be done.
This post will explore six steps to building a profitable pipeline. And there’ll be plenty of examples along the way so you see how it’s done.
What’s a sales pipeline and why do you need one?
A sales pipeline is a structured and simplified way of tracking potential buyers as they move through the stages of the buying process.
Having a pipeline helps you:
- Easily track all your leads.
- Sell systematically.
- Accurately predict revenue.
- Create an integrated marketing strategy.
In short, you run a more efficient and profitable business.
A 6-step sales pipeline development strategy
Here’s a simple step-by-step guide to building a high-converting pipeline that brings home the bacon.
Step #1: Build a strong foundation with the 3 Ps.
Effective selling needs a good base. To sell well you must know the:
1. Product you’re selling
Know your product intimately. Only then will you be able to present it in a favorable light and answer questions with confidence. Plus, you’ll be able to have intelligent sales conversations with prospective customers.
2. Person you’re selling to
Good salespeople know their product in and out—great ones know their prospects even better. This helps them push the right emotional buttons when selling to them.
3. Pitch you’re using to sell
Close knowledge of the product and prospect is half the battle. Craft a tantalizing hard-to-resist bid that ties in with the customer-to-be’s nagging problem.
Once you’ve mastered these fundamentals, you’re ready to go to the next step.
Step #2: Determine your sales pipeline stages.
You wouldn’t ask someone to marry you on the first date (usually).
Yet companies love bombarding fresh contacts with sales pitches. Like a relationship, the sales process goes through phases culminating in a buying decision. These stages differ from company to company. For example, a SaaS startup pipeline could look like this:
To come up with these stages think of the major milestones a prospect has to reach on their way to becoming a buying customer.
Step #3: Classify your prospects.
To increase chances of conversions, it’s crucial to segment your leads at the beginning of the pipeline. If you sell to different people in one way, you won’t get good results.
Take note of these four ways of grouping prospects:
1. Demographics segmentation
Groups leads by: age, gender, ethnicity, income size and education.
2. Behavioral segmentation
Groups leads by: buying patterns like brand loyalty, purchase frequency and the different ways they use to buy.
3. Psychographic segmentation
Groups leads by: interests, attitudes, values, beliefs, lifestyle and personality traits.
4. Geographic segmentation
Groups leads by: the area where they live. People from a particular area often have shared values and preferences.
Smart segmentation makes the customer journey smoother and the marketing more precise.
Step #4: Work out trigger behaviors.
Growing businesses are growing because they create a steady stream of sales opportunities.
A sales opportunity is a lead that’s been qualified using a specific set of criteria and is likely to turn into a sale.
Most teams try to increase sales by filling the pipeline with as many prospects as possible.
The result? A dismal lead-to-customer conversion rate. Sales only improve if you fill your pipeline with the right kind of leads.
For each stage of the pipeline, observe which behaviors move the lead to the next stage and eventually turn into a sale.
We’re talking about things like:
- Downloading a report.
- Watching a video—to the end.
- Requesting a demo.
- Completing a trial period.
Once you’ve identified these specific behaviors that show the lead is serious about your offer, link them to your revenue goals.
Let’s say you notice 80% of people who try your product for the full 14 days end up buying. Suppose your monthly target is $100k and your product costs $7,000.
This means you need at least 18 opportunities (people who completed a trial) to hit your target.
Also, use this data to fine-tune your approach. What specific actions can your sales and marketing team take to encourage that behavior?
- Send more follow-up emails.
- Provide more phone support.
- Tweak trial offer landing page copy.
- Offer incentives for completed trials.
Step #5: Refine your sales process.
Once you’ve identified trigger behaviors, it’s time to create a sales process that brings in more sales than you’ve ever dreamed of.
Here’s how in three steps:
Step 1: Evaluate your current process.
Ask yourself the following questions:
- Which channel produces the best leads or people who are more likely to buy? Drop or don’t invest much in the least performing ones. Focus on your number one channel.
- How long does it take to close a sale? How can the time frame be reduced?
- How many emails do you need to send (or phone calls do you have to make) before you get a yes?
- Are you talking to the right people? If sales are always low no matter what you do, maybe you are targeting the wrong people.
- Where are you leaking sales? At what stage or point does the number of leads fall significantly?
Step 2: Distill steps you took to close your most successful deals.
There must be something your company’s doing right otherwise wouldn’t still be in business by now!
Take a close look at your most successful deals:
- What thread ties them all?
- What did you do differently in each case?
- What’s the average order value of the deals?
- How were the proposals phrased?
- Who bought the items in question?
Turn answers to these questions into templates you can use to sell better.
Step 3: Inject fresh strategies using pipeline data.
Suppose you realize conversions improve as you go further down your pipeline.
What can you do with this info?
To boost conversions, and by extension, sales, you could focus on your initial offer when prospects get in touch for the first time.
If you were offering prospects a report to download, change to higher value content and see what happens. Offer a free course, webinar or video. This may result in more leads at the beginning of your pipeline.
Step #6: Revive dead leads.
Not all prospects who get into your pipeline end up buying.
What do you do with these leads?
Discard them? No way! Bring them back to life.
Here are two easy tactics to try:
First, flaunt new product features.
- Dig into your CRM data.
- Identify stages where leads fell off.
- Pinpoint reasons why leads lost interest.
Once you add a new feature to your product, reach out to the prospects who asked for it in the past. Break the exciting news to them. This can reignite their interest and move the conversation further.
Second, lure them with content they want.
How do you do this?
- Create a value-packed piece of content like a report, webinar, video, or case study.
- Craft a personalized email to the disinterested leads and offer them that high-value content.
- If they respond, then reconnect with them so they can continue their journey through the stages until they buy.
This strategy revolves around great copywriting and quality content. If you’re not a good writer outsource the writing part. Check out these copywriter salary ranges to get an idea how much you have to invest to get a good writer.
Don’t bury dead leads. Find creative ways to resurrect them.
4 sales pipeline management best practices
Wondering how the best companies manage their pipelines? Here are four tactics they use to stay ahead of the pack.
#1. Identify and track key metrics.
To get the most from your pipeline, determine and track significant metrics such as:
- Average time spent in each stage
- Cost per opportunity
- Average return on investment
- Percentage of deals closed
- How long it takes to close a deal
- Lead conversion rate
Many sales teams battle to wrap their heads around way too many metrics. To overcome this, identify a handful of key metrics instead .
#2. Focus on small, continuous improvements.
How do you eat an elephant?
One bite at a time.
Aim for minuscule conversion rate increases at each stage. A slight gain can bring big results further down.
A marginal conversion rate hike at the stage where the company shows prospective buyers what their product can do for them, improves the rates of all the stages below it.
#3. Pool data together instead of splitting it.
In a typical company, info is arranged in different silos.
Marketing has its own set of data. So does the sales team.
Fragmented data leads to flawed decisions because of a narrow view..
For best results (and the sanity of everyone involved), make sure you have a single source of truth. This includes CRM data, email data, meeting data, and even phone conversation data.
This way, everyone gets a more accurate picture.
#4. Free your reps to focus on selling.
Sales reps sell, right?
Well, sort of.
Turns out most reps spend most of their time doing everything but selling. A study by Pace Productivity found that the average sales rep spends a mere 22% of their time selling.
Good businesses find ways of freeing their reps from administrative burdens. With more time on their hands, they sell more.
While trending best practices are great, don’t follow them blindly. Your company is unique. Test and tweak until you find your own recipe for success.
CRM: the tool that makes it all happen
Creating an effective pipeline is time-consuming and complex.
Luckily, a good CRM makes it all a breeze.
According to Innoppl Technologies, 78% non-mobile CRM enabled companies fail to meet their sales quotas because they don’t have a good CRM to guide and manage customer interactions.
Healthy pipeline, healthy bank balance
Building a sales pipeline isn’t easy but it’s worthwhile.
Just like any other relationship, it can take a while for someone to warm up to you and commit long-term. But with a bit of patience, tact, research, and use of feedback, you can win.
The best part?
Once you create a sound pipeline, you’re pretty much set to live happily ever after with your customers.
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