Sales pipeline management is at the core of all sales activities. With the help of a sales funnel, you can monitor the entire sales process in the form of a funnel (wider at the top and narrow at the bottom). A sales funnel tool is an invaluable tool for gaining insight, planning your schedule and managing customer relationship for your business.
What is a sales funnel?
A sales funnel is a visual representation of your team’s opportunities. At the top of the funnel, you have “unqualified prospects”- the people who think might need your product or service, but to whom you have not spoken to yet. At the bottom of the funnel, you have people who have already received your product or service or have paid for it. The metaphor of a funnel is used to indicate the people who drop away at each stage of a long sales process.
Benefits of a sales funnel
By using a sales funnel, you can quantify the number of prospects at each stage of the process and predict the number of prospects who might get converted to customers. Also, by analyzing the change in numbers, you can spot problems in the sales pipeline and take immediate action to correct them.
A sales funnel tool enhances pipeline management
A sales funnel tool can help you track your sales pipeline through a dashboard, that is easy to use and act on. Pipeline management is about being able to create a sales strategy based on that information. The right tool will make your path to increasing sales and enhancing CRM very evident. From a CRM standpoint, a sales funnel tool offers vital for reporting, to-do lists, and collaborative standpoints as well.
It helps you capture new leads too
Apart from inserting each client and lead into a sales funnel tool, you can also implement a form on your website. This will help you automate prospecting by slotting interested prospects right into your sales funnel. This will expand your marketing reach substantially, as well as help you focus and prioritize your schedule, based on stages of deals and leads, and their values.
What is Sales Pipeline Management?
Sales pipeline management is an organization and tracking of prospects, quota, and goals- as well as understanding which deals need special attention. Effective pipeline management allows salespeople to keep track of deals by knowing which stage the deal is exactly in, and if there are enough deals to reach the target.
Here are a few best practices for effective pipeline management.
1. Master your sales metrics:
Mastering the sales pipeline is all about understanding the numbers and components of your sales funnel. If sales managers are well-versed with the averages, they can predict better and create predictable revenue.
You should have this data ready:
- New leads created per month and its source
- Conversion rate- leads to opportunities
- Conversion rate- opportunities to closed deals
- Average won deal size
- The average length of the sales cycle
- Win rate
- Total no of open opportunities
Make sure that accurate data gets entered into the CRM tool. Data quality should be a priority for sales managers. History, previous trends, and solid data will help you predict better future results.
Pipeline velocity metric is calculated using the formula:
Avg sales cycle
Altering any of the 4 components of pipeline velocity can impact business results. The key point here is to focus on each input and not the final output.
2. Regular Pipeline reviews:
Though forecast meetings are helpful; Pipeline reviews focus on opportunities that are at the top and middle of the funnel. Using pipeline reviews:
- The sales team can review the quality of recently added opportunities in the funnel
- Managers can have a greater influence on the outcome with these new opportunities
- Sales reps and managers can comprehensively view the entire pipeline.
3. Improve at each stage of the sales funnel:
Sales is a number game and teams use a Predictable Revenue system to take advantage of high volumes of leads. This might divert the reps to focus less on quality opportunities. Less focus on quality opportunities can be detrimental to their pipelines. Instead, small improvements in pipeline management at each stage of the sales funnel can lead to some promising results.
4. The sales pipeline must be strong:
If reps increase conversion rates by 5% in 2 macro funnel stages, there is a potential increase in the number of won deals by 50%. A sales funnel must be optimized and measured just like a marketing funnel. The evolution of the SaaS sales stack is making sales more like marketing every day. Know the apps, the funnel metrics, and keep an eye on the pipeline conversion funnel.
Eliminate weak sales opportunities using pipeline reviews as an opportunity. Clear your pipeline clutter often. This is critical for effective sales pipeline management. Steady lead flow allows your salespeople to focus on the best-qualified opportunities that are in line with your ideal customer profile and strike zone.
5. Create a formalized operations manual:
Case studies of specific opportunities from open to close, scripts and activities to do at each stage of the funnel can be a formalized operations manual for your reps. All sales managers can help their salespeople manage their pipelines better.
Follow the above tips for better sales pipeline management using the right sales funnel tool.