Studies show that if your business has a well-defined sales process, you’ll see higher revenue growth than those that don’t. One study by Vantage Point Performance and the Sales Management Association showed “an 18% difference in revenue growth between companies that defined a formal sales process and companies that didn’t.”
As a blueprint for the different stages in the sales process, your sales pipeline lays out the steps to convert leads into customers. This visual snapshot of your sales process helps you keep track of every single deal as it moves through each stage. Clearly, a sales pipeline is a crucial tool for your sales force that can make a critical difference in your bottom line.
Sales pipeline or sales funnel: What’s the difference?
A sales pipeline and a sales funnel are often confused for one another—of being two versions of the same process. In fact, they’re very different processes that deal with different aspects of your business. They’re both about sales but connected to different actions.
Your sales pipeline includes every stage of your sales process. It shows how your sales reps move a deal from the initial contact to the close. Your sales funnel, on the other hand, is the process by which a lead becomes a customer. The sales pipeline may mimic the actions in your sales funnel, but each one has a different focus.
Your ideal sales pipeline
Every company’s sales pipeline is slightly different from another’s. There is no one-size-fits-all plan to create this set of guidelines.
Coming up with the right plan is like writing a best-selling novel. There are basic raw materials that apply to all successful products: boy meets girl, hero saves the planet, happily ever after. Even though every book hangs on this (or a similar) framework, the details in one book are completely different from those in every other book.
The same thing goes for building your ideal sales pipeline. Most companies will use a formula to build theirs, but the small details and focus points will completely depend on the specific business. Almost all successful sales pipelines include four basic steps:
- Prospecting and nurturing leads
- Quoting and negotiating sales
- Closing the deal
- Managing the account
Planning a sales pipeline is a matter of applying these concepts to the way you conduct business. At each step in the process, ask yourself questions to narrow your focus to the details of your plan.
1. Prospecting and nurturing
At this stage in the pipeline, you’ve identified your radical buyer, and you’re trying to reach them. You need a deep understanding of what they’re looking for, who you’re competing with, and what prospects are willing to pay.
- What do potential customers want to know about my company at this beginning stage?
- How did they find out about my company?
- Who are my direct competitors for these customers?
- How do I want my sales team to interact with my customers?
- What information can I arm my team with to help them succeed?
2. Quoting and negotiating
So you’ve found those interested prospects, and it’s time to work through the actual sale. It’s vital to have a process in place for pricing discussions, discounts, and sales tactics that will create a sense of urgency.
- How do I know what my potential customers want?
- How flexible can I be on terms and prices?
- What information can I provide to support this step in the process?
- How can I help make this process go more smoothly?
3. Closing the deal
Once you’ve closed the deal, it’s important to get that new customer relationship off on the right foot. As important as signing a new customer is making sure they’re in it for the long haul.
- Once the deal closes, what are the immediate next steps?
- What is the dividing line between “sales” and “finance”?
- Which team handles the customer next, and what process will we use to hand the customer over?
- How can I make sure every customer gets good value from my company?
4. Managing the account
Many businesses treat a closed deal as the end of the sales process, but current customers are some of your greatest opportunities. Happy customers are more likely to spend money and send new customers your way.
- What team is responsible for further managing this account?
- What is the process for handling this customer in the future?
- What process do I have in place to make sure this customer is happy and stays that way?
- What opportunities are there for upselling and cross-selling?
- Do I have a referral process in place?
- What can we do to recover lost opportunities?
- How do we handle clients who are unhappy or have specific complaints?
Personalize your sales pipeline
Finding answers to all these questions is just the beginning of the process. These answers are the building blocks you’ll use to form your unique sales pipeline. Use details about your company and your products or services to fill in the blanks, creating a pipeline that fits your company culture.
Once you’ve created the sales pipeline, you and your sales team will have a clear idea of how you should deal with potential customers at every step of the sales process. Since every team member will be using the same steps, measuring productivity will be much easier and more accurate.
It’s always a good idea to bring sales team members in on the development of a sales pipeline. After all, they’re the ones with boots on the ground. They’ll likely have some valuable insights into how the process will work. Ultimately, they’ll be the ones using this every day, so giving them a sense of partial ownership can empower them to follow the guidelines in future sales appointments.
Jonathan Herrick is the co-founder, CEO, and chief high-fiver of Hatchbuck, an all-in-one sales and marketing platform. His extensive experience in digital marketing and sales strategies has been a driving factor in growing Hatchbuck’s sales by over 2,000%. A purpose-driven leader in all aspects, Jonathan has a passion for cultivating his team’s culture, spending time with his family, and working to make a difference in the St. Louis community.