Sales Pipeline Management: 5 Best Practices to Boost Revenue
Sales pipeline management is one of those things that you probably don’t want to think about a lot, but you really should. It sounds a little dry, but your sales pipeline is the crux of your business; if you don’t sell stuff, you won’t be in business anymore. Not to scare you, but how you set up, maintain, and improve your sales pipeline is a life-or-death sales situation.
Want to think about that a little more now?
So, what is a sales pipeline?
Your sales pipeline is the process your prospects go through to become customers. Calling it a pipeline helps you visualize a prospect’s movement toward conversion. There are five general steps to the pipeline, though every business has its own specific naming:
Though each is its own phase, they are all interdependent, and each stage has to make sure it helps prospects move into the next one. Ensuring swift movement through each stage is how you make your sales, so proper pipeline management ensures fewer bottlenecks and resolves any problems quicker.
Here are five tips to manage your sales pipeline to boost your bottom line:
1. Know your pipeline
Before you manage something, you have to understand it. You need to know where your customers come from, your usual conversion rate, how long it usually takes to convert a lead to a customer, and much more.
You need to know what key decisions prospects are making that moves them closer to purchase. How do people find you? What pieces of content draw them in? What pain points do they have, and what information helps them make a decision? You also need to know the points in your pipeline where prospects leave, or why they don’t ultimately make a purchase. The way to know these things to have a clear and intimate understanding of exactly how your pipeline works so that you know where to fix it.
2. Keep detailed metrics on your pipeline
If it’s essential to know your pipeline, then the second—and just-as-essential step—is to keep detailed metrics on how your pipeline performs. Here are the metrics you must know:
- How many leads per month each source produces
- Lead-to-opportunity conversion rate
- Opportunities-to-closed-won conversion rate
- Average closed-won deal size
- Average sales cycle length
- Win rate
- Total number of open opportunities
3. Regularly optimize your pipeline based on your metrics
This is sort of a two-in-one step: In order to optimize your pipeline regularly, you also have to review it regularly. Regular, frequent reviews will help you determine trends (are conversions in one area off? Have things changed in the past month or year?) and solve for problems. But the key to knowing your metrics is that you’ll know exactly where in the pipeline things may not be going so well.
For example, if your email click-thru rates start to decrease, you know there’s something you need to fix in your emails. But if you don’t have that metric, or don’t bother to look at it, you may only see the problem at the bottom of the pipeline when you aren’t closing as many deals.
4. Formalize the process and include the team
Make sure that your sales pipeline management process is documented and formalized. You should not be the only person in your business who knows exactly what’s happening; in fact, anyone who has anything to do with your pipeline should be well aware of the process, metrics you measure, and how things are going.
This could mean you have regular weekly meetings to go over metrics, or even send out daily or weekly update emails with less-frequent in-person meetings.
You should also make sure your sales team is totally on board and well informed of the pipeline process, how it will be monitored, and how changes will be made depending on performance. A key part of a successful pipeline is the buy-in and adherence of your sales team, since ultimately they’re the ones driving deals to close, and the more they’re on Team Sales Pipeline, the more sales your company will make.
5. Flag problems when they arise
The great thing about carefully managing your sales pipeline is that you’ll be able to see when problems arise. Here are some common ones to look for:
These are opportunities that get stuck in one stage and don’t keep moving, and they’re at higher risk of not converting. If you know the average amount of time each prospect spends in each stage (and you should!), you’ll know when you have opportunities at risk
Prospects who go straight from awareness to decision—or skip any level of progression—are less likely to convert. If you track where your prospects are going, or if they’re skipping, you’ll be able to tailor your content to their specific journey to raise the likelihood of conversion.
Too many opportunities
You also don’t want your pipeline to get clogged with opportunities—more is not always better. It’s far more advantageous to have a pipeline with fewer, high-quality prospects than more, low-quality ones. Too many will bog you down, because your sales team will have to spend way more time sifting to find the quality leads. Poor quality leads will also skew your carefully cultivated data, which will not give you an accurate picture of your pipeline. Don’t be afraid to purge low-quality prospects from your pipeline!
Keeping a close eye on your sales pipeline will be well worth the work; the results of a well-managed pipeline will show themselves directly in your bottom line.
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