Are you rushing late to your MBA class? Need to impress your peers on “Sales Pipeline”? 😛
TLDR: Think of the Sales Pipeline as your sales GPS. It’s the ultimate visual tool to track prospect advancement through quantifiable sales stages. This way, you and your team can easily see how close someone is to making a purchase.
Your sales pipeline highlights buying intent, providing your team and leadership with real-time insights into the prospect’s journey, ensuring precise sales tracking and informed decision-making
If you feel that’s a lot of jargon, read on where we break down these terms and explain them in detail
What is a Sales Pipeline?
You already have a Sales Pipeline but may not even know it.
We want to table this problem from the first principles, but first, some commonly used terms in Sales
Prospecting is the first step in the sales process: identifying potential customer prospects. The goal of prospecting is to develop a database of likely customers and then systematically communicate with them in the hopes of converting them from potential customers to current customers.
Let’s say there is just a two-member team in charge of selling.
Hypothesis: A 2-member team can manage their selling just using an Excel sheet and no formal tooling
How many people can a decent rep contact in one day? 40, 60? From “Inbound Selling” by Brian Signorelli – Chapter 4 “Connect: How to engage Active – and not so Active Buyers”
Most reps were cranking out over a hundred attempts daily; the best well into the 120s and 130s
Let’s say your 2 member team is decent – so each is contacting 100 prospects a day.
100 x 22 (working days) = about 2200 prospect touch events a month x 2 (reps) = 4400 touch points per month.
Sales touchpoints are the moments when a prospect encounters your brand, whether it’s by email, phone call, LinkedIn, demo, or some other type of outreach. Touchpoints can occur during any stage of the buyer journey: awareness, consideration, and decision.
Why is it essential for you to track your sales pipeline?
First, let’s understand what goes on when you prospect.
1. Gather information and qualify
2. Build familiarity
3. Set an appointment for a meeting to move a prospect closer to a sale OR close a sale.
This means, in a month, each of those 2200 x 2 ( reps ) = 4400 touch points need to be marked in the system – as “not ready for sales right now”, “interested”, or “going to make a purchase right now”.
Furthermore, your team must fill that list with more qualified leads for the next month.
Now imagine if your team size is 10 – that’s 10 x 2200 = 22000 touch points being created monthly, giving you insights on what’s happening with every prospect you are working with.
But things will slip through the cracks if you don’t have a formal system tracking your sales pipeline. A team member will go on leave. Follow ups may be missed. A fellow team member will handle a call on behalf of someone else. But the context was missed. The customer specifically mentioned clarification on CSV uploads, and that context was not passed on. And the follow up call was shabby. Or a lead said: call me after a week. And it was noted down in the Excel sheet. But Excel sheets don’t remind you to call up a lead after a week. And so, a warm prospect will go with a competitor, and your team will lose a deal for reasons well within your control.
Here’s another scenario. Your team members don’t fill in the updates into your Excel sheet with as much zeal as you expect them to. Call notes are not put into the column that was designated for the notes. This means a lack of visibility on what’s happening in the field.
So I hope by now the need for a formal sales engagement system to track your prospects’ journey is evident.
Prospects go through a continuous identification process, from qualifying to closing the sale,
and many intermediate business-dependent steps in between. This is the Sales Pipeline; we will get a more formal description.
What are the sales pipeline stages?
Capturing your prospects’ sales journey.
Prospects go through stages in a pipeline:
Stage: Prospecting – Finding new potential customers. If there is a Marketing team, they will be generating inbound leads. Otherwise, your SDRs will be cold prospecting – which means cold calling or sending out cold emails or finding the right people on LinkedIn who fit your profile
Stage: Qualifying – People who responded to your cold email and said they are interested are your warm leads. The people on LinkedIn who accepted your connection request are 1 more step away from qualification. You need to send them another message to make your proposition offer. And what about those where you have a phone number? Your team will pick up the phone, read out your script, and ask them for an appointment if they are interested in this.
Your SDR, Amy, is in her prospecting time block. She dials an MQL – “Hi John. This is Amy from SmartReach. We noticed you downloaded our white paper on cold email outreach to put your sales outreach on autopilot. Are you currently looking for a cold email solution? Can I schedule a 15-minute call to speak with you on this?”
If John answers yes, this is a qualified lead. Amy gets into the sales engagement system and sets an appointment for 15 minutes. Amy continues dialing through the prospects list. Marking them as either interested with an appointment in the system or cold lead. She may update notes on cold leads – like call back in 2 months.
Either way, she has made a touch point entry in the system for each of these contact channels and marked the prospect as someone they need to continue further with, or this is not the right time for this product you are selling.
Note: Amy could manually enter these touchpoint entries or could be auto-detected and tagged based on the sales engagement system you are using.
Her qualification calling block is now over.
Sales mode: And now she switches gears, there is hope, money to be made and that quarterly bonus to be collected.
She has a set of appointments to attend. She gets on a call with John.
“Hey John, thank you for taking the time for this exploratory call.”
Fitment evaluation:
Have you used any cold emailing solutions before?
Are you planning on using this solution for in-house, or are you an agency?
Budget quantification:
How big is your team? How many seats are you looking to buy? OR what’s your sending volume?
Competition:
Are you evaluating any other products?
Lead to a product demo:
Would you like to set up a product demo?
Amy gets into the system and scores this lead based on the questions she asked and their answers. These are time-tested questions that have evolved over time in your sales process. Every rep is supposed to ask these and qualify the prospect.
Stage: Demo setup
Demo appointment: Hi John. Thank you for joining us for this demo. I have today with me who will be demoing our product to you.
I hope we have answered your questions, would you be interested in starting a trial? I would like to schedule another call with you a week from now to check on how things are going. But feel free to reach out to us at any time
Stage: Trial Follow-up
Hi John. It’s been about a week into your trial. I wanted to understand how things are going with the product. Is there anything I or our Customer support team can help you with?
….
Sure, we can clear your doubts here and now on this call and I can set up another meeting if our time here is not enough to clear your doubts.
. . .
I would like to set up another call next week to ensure you’re not facing any roadblocks, and we can meet again to discuss the fitment to your use case.
Stage: Pitch the sale. Score 90.
As you can see, the software tracks each phase of the touch point, and your Prospect’s status is carefully guided toward success or failure. Tracking the prospect’s journey to the final sale.
This is the Sales Pipeline. Detailed tracking of every touchpoint in the sales process and marking off critical stages that indicate that a prospect has moved to the next stage in a quantified manner, surfacing intent to the leadership tracking their sales progress.
Based on the above, you would have gauged that the sales pipeline stages could vary from business to business. You could define the stages based on your sales playbook.
Post-sales mode: If a sale is closed, the customer may be handed over to a Customer Success team, and this may be the last step in the pipeline
As we mentioned in the short introduction, a Sales Pipeline is a detailed tracking of every touchpoint in the sales process and marking off critical stages that indicate that a prospect has moved to the next stage in a quantified manner, surfacing buying intent to the team and leadership tracking their sales progress.
What insights should a Sales Pipeline give?
- Do we have a large enough list of prospects? Here are a couple of lines from “Inbound Selling” Chapter 4, page 63 and 64.
“At Hubspot we are spoiled. Especially in 2012 we were very spoiled. I asked for leads and the marketing Gods just provided. There were literally tens of thousands of leads for us to call because our marketing team relentlessly created high-quality content to attract visitors to our site and convert them into leads.”
So if your team is not having a large sales pipeline, you need to take a closer look at the Marketing team or ramp up cold prospecting done by your SDRs.
- Do we have a large enough list of qualified prospects? If your pipeline of qualified prospects is not high enough, it means your SDRs are not making enough sales calls using the Marketing Qualified Leads pipeline to further gather prospect interest about their current buying cycle.
- What is the maximum quantifiable total sale my SDR can do this month? (can he meet his target?) If you add up this number across all SDRs – will you meet your target? When a company sets up an incentive program for their SDR team, they want them to hit those targets and drive company growth. But if those targets were pulled out of thin air with vanity numbers, then they will not be able to hit those targets and will be demoralized.
- What are the largest deal sizes
- Are the deals scored with a high enough probability? You want your team to work on the highest value; highest probability leads to maximize conversion. Over time your team has figured out key questions that need to be asked at each stage of selling, a lead scoring formula that adds up scores and qualifies leads. Based on this you want your team working on the highest probable conversions. And if there is a tie on scores, you want them working on a lead valued at USD 1000 instead of USD 200.
- What are my SDRs closing ratios?. Amy from your team may need to consume 8 leads before she closes a deal. Bob may need 10.
- Are my SDRs filling up the CRM and touch point notes? You want a clear picture of what’s happening on the ground.
- Prospect didn’t buy because of feature X
- Prospect didn’t buy since we don’t have compliance Y
- Prospect didn’t have budget
- At the Lead qualification stage they told us we need to contact them in September
- Is the system warning me of upcoming doom – lack of pipeline, lack of qualified leads for a 10-member team am I seeing 22000 touch point activities being logged in the system?
- Is the system reminding us of all those prospects my SDR marked as contact me in September – “Our contract is ending in November so we are going to look for something new then?”
What more can a Sales Pipeline tell you?
Let’s think a bit more. The quarter has ended. You and your team are looking back. There are deals your team won and that makes you happy. But there are deals you lose, too.
Maybe you lost 10 deals to a missing compliance.
Another 8 deals to a missing feature.
And in another 5 conversations, you heard of a new competitor offering something that requires a change in your pricing strategy.
You have all these insights because you ensured that your team filled out all those reasons diligently and now you can look at things in aggregate via reports.
And so you hold a meeting with the product team and give them detailed insights as to what’s working in the market and some trends that you’re seeing, new directions that need to be taken, and pricing changes that need to be made.
What else do you want your sales pipeline to tell you?
Let’s say your company uses a CRM. And one fine day it goes down for a few hours. And your sales team is sitting idle. You reach out to their support and you want reasons why it went down. And you find out their database CPU hit 90% and then they crashed. And after that, their team realized specific tables were not optimized (missing indexes). And by the time they cleaned everything up, it was a few hours. And then you ask them, and yourself, why were no alarms set for such things?
What about your Sales Pipeline? What kind of alarms do you want set?
- Marketing qualified leads are too low
- Sales qualified prospects are too low
- Quantified deal size is too small
- One particular SDR is not filling their touchpoints frequently enough or after too much time has passed, losing context a customer has passed to them. Your CRM is now rotting.
- SDRs with below-average contribution to the top of the funnel
- One particular SDR’s closing ratio is way too low.
In summary, a correctly done Sales Pipeline can help optimize your SDR’s time and sales efficiency and surface the true picture of what’s happening in the field, allowing you to operate as a General, marshaling your troops where needed, yet allowing them autonomy to operate on the highest value deals like Commandos.
