The idea of a sales pipeline is a relatively new way of visualizing the sales process. Many companies are still uncomfortable with the idea and many feel they are not good at managing their sales pipelines. According to a survey with the Sales Management Association, nearly two-thirds of executives feel their management of their sales pipeline was ineffective. Many executives waste a lot of time staring at pipeline metrics but don’t know how to make the knowledge pay to improve sales performance.
Any trained sales professional knows that the sales process takes place in stages. Traditionally the stages are something like: qualify clients (do they have the means, the needs, and the responsibility to purchase), assess client needs, present do-able solutions, meet objections, trial close, then repeat–narrowing the presentation toward final close. The sales process works best when the stages are clearly understood and there is no confusion about where in the process a given selling interaction stands.
Many CEOs come into business with a lot of confidence in their ability to sell and are so used to handling sales themselves that they fail to set up a system for building and processing sales. When they get around to hiring a sales team, the organization begins to suffer from what tech entrepreneur, Jennifer Fremont Smith has called “no processitis.”
Somehow, when the sales process was transformed into an inbound marketing or on-line variant of the traditional selling art, companies stopped paying attention to the stages of each prospect in the pipeline.
Discussing Process instead of Projecting:
Many sales managers spend too much time discussing close dates, probabilities, and sizes of potential deals. Instead of discussing the health of their sales pipeline, they are projecting future revenues that are not yet realized.
If sales managers began spending more time on the state of the sales process for each prospect, the overall health of the sales pipeline, and how to bring more prospects into the sales pipeline they are likely to see improved sales.
Sales Management Training:
Research carried out by Forbes found that more than 60% of sales managers are not adequately trained in the management of their sales pipelines. Sales teams that did claim their sales manager were trained in sales pipeline strategies showed significantly better sales revenue growth than those who did not.
Managing the sales pipeline is an intensive and active process. The first step is identify the prospective customer’s total budget, how long will the sales cycle take, and the key customer decision-makers on the account. In short, the leads have to be qualified before anyone can count on a closed sale. Sales people have to be trained to manage these three key pieces of information to avoid the error of being too optimistic about their pipelines. In the worst case, the sales staff will spend all their time writing proposals for unqualified leads, certain all the time that each lead will close soon.
Obtaining qualifying information from a prospect always calls for delicacy and tact. Prospects are often reluctant to discuss their budgets and are also reluctant to describe the purchase process in terms of who the responsible buyer is. In many cases, slip-ups in the early qualifying stage of a sale can cause even likely buyers to retreat to the competition.
Look for the Best Metrics:
What are the best predictors of success in converting leads to prospects? It is not the same for all companies, all product types, and all sales methodologies. Part of the preparation of your sales pipeline should be the study of the metrics you collect to see which one most makes a difference for success.
In one example, the company had focused largely on sales numbers as a metric. The sales staff was focusing on follow-up calls on prospects. However, a study of the sales metrics suggested that reponse time was really the most important metric for affecting sales conversion. If a prospect was followed-up immediately, they were most likely to be converted into sales. The company began focusing on speedy follow-ups in their sales meetings. Response times fell and sales levels doubled.
Experts advise, measure results. If you don’t know what factors turn leads into sales, you are essentially shooting in the dark.
BigContacts supports the process of sales pipeline management. Please contact us to find out how.