Sales pipeline management is the central activity that determines how well your sales team performs over time and how much revenue your company brings in every quarter.
If you’re in sales management, you may intuitively know this.
But the stats back it up.
According to the Harvard Business Review, “Companies with effective pipeline management had an average growth rate of 5.3, a 15 percent increase. Even more interestingly, companies that mastered three specific pipeline practices saw 28 percent higher revenue growth.”
The effectiveness of sales pipeline management is undeniable.
What you need to know, and what you need to teach your salespeople, is how to excel in managing sales pipelines.
We’ll give you 8 best practices later in this post.
But for those who are less familiar with all the parts of sales pipeline management, we’ll first walk through what it is and how it works.
What Is a Sales Pipeline?
A sales pipeline is a predefined path that a deal travels along until it is closed, lost, or abandoned.
It’s more or less a visual representation of all the stages and steps a salesperson takes a prospect through.
It’s very good at keeping sales reps on track as they manage meetings, presentations, documents, contacts, and anything else that goes into a particular deal.
What are the Sales Pipeline Stages?
Sales pipeline stages help guide your salespeople toward closing deals efficiently.
Sales pipelines can vary from industry to industry and company to company.
But the 7 basic stages of B2B pipelines provided by Technology Advice give you a great example of a usual pipeline.
The stages are:
- Lead generation - attracting and engaging prospects through email marketing, content marketing, event marketing, and various other campaigns.
- Lead nurturing - qualifying leads through automated marketing messages and funnels that filter the best leads for follow-up from your salespeople. This stage can be combined with “marketing qualified” leads.
- Sales accepted lead - taking leads provided by marketing and following up with them, typically by phone.
- Sales qualified lead - qualifying the leads through single or repeated contact to nail down budget, timeline, and specific needs and handing them off to an account manager.
- Closed deal - closing a deal after lead makes a purchase.
- Post-sale - continuing to engage the customer after they buy to increase loyalty and lead to repeat purchases.
What Is Pipeline Management?
Sales Pipeline Management is the tracking and organizing of all leads through all stages of the pipeline from qualifying to closing in order to win more deals.
Your job as a sales manager is to coach your salespeople through their sticking points.
In the next section, we’ll show you specific best practices you can incorporate as a sales manager.
7 Sales Pipeline Management Best Practices
Sales managers oversee the entire pipeline for each salesperson. They have to juggle a lot of moving parts and the stress may prevent them from prioritizing the right tasks or taking the proper actions to achieve their goals.
Below are some best practices to help you do what’s most important for the highest ROI.
1. Obsess Over Sales Pipeline Reporting
Sales pipeline management begins with the numbers. Those are the hard components of every sales funnel.
Sales metrics allow you to quantify each aspect of your sales operation. You can find out if you’re efficient or inefficient in various areas, fast or slow, productive or unproductive.
And the only metrics you should measure are those that are relevant to getting more leads and closing more sales.
Here are a few we recommend measuring:
- Number of active deals in your pipeline - every lead you’re pursuing that has the potential to close along with all the details of when you’re expecting to turn them into revenue.
- Size of deals in your pipeline - how big or small each deal is that you’re pursuing based on a number of factors to determine which ones to prioritize.
- Close rate - the number of open deals in your pipeline compared to the number of closed deals at any one time. In other words, how many open deals you need to close one deal.
- Sales cycle time - The average time it takes for a lead to enter your pipeline, go through all of its stages, and get closed. The faster the sales cycle time the better.
2. Conduct a Sales Pipeline Analysis Periodically
The goal in managing pipelines is to increase the number of qualified leads and deals won.
That means you need to monitor the health of the pipeline as often as you can.
What sales managers usually focus on are forecast meetings. Those are very important but they only concern deals expected to close in a relatively short time frame, like next week.
A sales pipeline analysis reviews deals at the top and middle of your funnel. This allows your sales team to:
- Review the quality of new opportunities entering the pipeline and prioritize them accordingly.
- Help your salespeople better direct the outcome of any given deal in the beginning stages to help them avoid missteps.
- Provide a more comprehensive view of the entire pipeline for maximum conversions.
This is not a time for hand-holding, this is a time for grilling your reps.
Inquire about the quality of each lead, ask about which decision-makers are involved, ask about next steps, and dig into their own management practices and processes.
You want to make sure each of your reps has good “sales pipeline hygiene” so they’re not wasting time and they’re pursuing the best leads.
3. Clean Up Sales Pipelines Regularly
Speaking of hygiene, pipelines need to be cleaned out regularly.
That’s why management being involved with leads early on in your sales reps’ pipelines is so important:
You help them pursue hot leads and weed out the bad leads.
Bad leads are the ones that tell you explicitly they’re not interested after your first meeting even after combating their objections.
Or you’ve met with them multiple times and they refuse to take any next steps.
Or you haven’t been able to put a meeting on the calendar and they never answer your calls and emails.
If any of that is the case, drop them immediately and put all of your attention on the leads that matter.
The faster you remove leads that waste your time the easier it will be to give your time to leads you can definitely close.
4. Help Sales and Marketing Work Together
According to a study conducted by research firm McKinsey, B2B customers will use six different interaction channels throughout the buyer's journey. Making the sale now requires marketing and sales teams to work together to understand customer motivations.
What this means is having marketing conduct customer research using the insights and expertise of those on the frontlines - your sales reps - so marketing creates better data and informational resources they can use when interacting with customers.
It also means helping marketing craft better pieces of content, better emails, and better communications all-around that leads are looking forward to consuming.
And it means providing better customer service on both the sales and marketing side of things.
When sales and marketing work together they get:
- Clear priorities.
- Quick wins.
- And improved response rates.
5. Always Follow-Up With Leads
In most industries, buyers have more options to purchase from than ever before.
That means in-between your first meeting and your next, they may have checked out and contacted several competitors.
One way to maintain their interest and keep your products top of mind is by following-up with leads often.
Common wisdom said it took almost 4 calls to close a deal in the past.
Today, it’s recommended to make more than 8 calls to close a deal.
But today, you don’t always have to call to follow-up.
We recommend setting reminders for all leads to follow-up periodically through email first, then call, and then use your best judgment for communications after that.
6. Maintain a Short Sales Cycle
The shorter the sales cycle, the more time you can spend on selling to new leads.
On the flipside, the longer your sales cycle the more opportunities your prospect has to change their mind and seek out an alternative.
But there are a few things you can do to shorten the sales cycle:
Schedule the next call at the end of every meeting. So much time is wasted waiting for your sales rep or their lead to book the next time they’ll talk. If your reps agree on next actions with their lead, they can certainly schedule the next call or meeting to go along with it.
Set agreed-upon timelines up top. Your salespeople don’t need to force their prospects into agreements they don’t want to be a part of, but they should push for a clear (and relatively quick) timeline that works for everyone.
Find out if you have a buyer or a BSer in your pipeline. Your reps’ prospects may not have buying power, or a budget, or may have other reasons why they won’t buy from you any time soon, or ever. Find this out as early as possible and cut these dead leads.
7. Leverage Sales Enablement Content
The more sales enablement content your salespeople have to work with, the easier it becomes to persuade and sell in any given situation.
As leads move through your sales pipeline, they’ll have different questions, need to see different information, and will require different approaches to close them.
With marketing and sales working together, they can create content for any situation.
The types of sales enablement content we recommend are:
- Case studies
- White papers
- Blog posts
- Product sheets
- Sales scripts
- Competitor comparisons
- Social media content
- On-boarding content
CloudApp: An Essential Sales Pipeline Tool
Sales pipeline management requires you to communicate with your sales teams often about many different moving parts.
It’s rare that you’ll always be in the same room with them to help out directly, so you’ll need some way to communicate remotely.
Calls, texts, emails are fine but can fall short from clearly demonstrating the advice or insights you want to provide. Sometimes you need to walk a sales rep through something step-by-step and talking them through it isn’t sufficient.
They have to see it themselves.
That’s why CloudApp is an essential tool to add to your arsenal.
It was made for visually communicating with your team.
You can record a video of your screen as you perform a certain task.
We’ve been ranked by G2 Crowd as one of the top sales enablement tools.
Our software is easy to use and simple to share.
Help your sales team close more deals by discovering why CloudApp is an essential sales pipeline management tool today.