No business can survive for long without a healthy sales pipeline. It’s what keeps your sales team organized and focused on managing opportunities to close deals. It helps you forecast revenue and business growth and provides insight to drive new initiatives.
Unfortunately, many B2B organizations suffer from ineffective sales pipeline management.
The symptoms are almost always the same:
- Sales teams waste time delivering demos to unqualified leads.
- No one follows up with promising opportunities.
- High-value deals get stuck.
The outcome is always the same, too: low close-won rates and slow growth.
Given the uncertain times we’re living in, ineffective sales pipeline management can easily grow from being something that holds your business back to actively endangering it. COVID-19 has affected best practices for lead generation, follow-up, sales quotas, and sales cycle length. As a result, the pandemic’s impact on sales pipeline management has been profound.
Good sales pipeline management can protect the health of your bottom line. To help pandemic-proof your pipeline, we’ll show you how to keep your cash flows in rude health during the coming recovery and on track to meet your revenue growth targets in the long run.
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The Daily Briefing Executive Summary
What Is a Sales Pipeline?
A sales pipeline is a visual representation of your current deals and opportunities. It shows where leads and opportunities are in the sales cycle, from prospecting and first approach to discovery and (hopefully) closed-won. As a deal moves through the sales stages, the pipeline should become your go-to resource for measuring progress. By contrast, a sales funnel (often confused with a sales pipeline) specifically tracks your conversion rates at each stage of the sales cycle.
Your sales pipeline is perhaps your business’ most critical tool, certainly as far as your bottom line and general decision-making go. A functional pipeline — combining prospecting, marketing, and sales efforts — allows your reps to move leads closer to the sale faster. Understanding the passage of opportunities through each stage of the pipeline helps you improve the sales process. With a good sales pipeline, you can identify potential problems earlier and be more direct in bringing promising deals to the next stage.
Your sales pipeline is also your surest tool for forecasting revenue and growth. As LinkedIn explained it on their blog, “[…] to be truly valuable, your sales pipeline needs to be visible, updated, accessible, and actionable for the pertinent players on the sales and marketing teams.”
Many revenue organizations fall short on these precise scores, and one sales opportunity after another goes wasted.
Why Sales Pipelines Get Leaky — Common Problems at Each Stage of the Sales Cycle
A sales pipeline is a visual representation of where your prospects, leads, and opportunities are in your sales cycle. This means that any problem occurring at any of its stages will affect the quality and effectiveness of your pipeline. We can observe the most common pipeline issues by looking at each of the four main sales stages individually.
Stage 1. Qualification (or The Discovery Call)
The sales cycle begins when your customer is just a new prospect. You’ll have enticed them with a beautiful website and high-quality content marketing, establishing a vision of your product in their mind. A prospect will make initial contact, perhaps requesting a demo or filling out an onsite form, and the sales rep will arrange a discovery call. During this call, the rep will ask the customer questions to determine fit.
The key problem with the discovery call is that essential collected information often gets lost.
Shockingly, as we’ve discovered here at Chorus, on average, only 5% of relevant information from customer-facing calls gets into a CRM (like Salesforce). Conversations usually happen over the phone, and it’s difficult to write down important points when a sales rep is primarily focused on an engaging discovery call.
The most common examples of crucial information that never ends up in the CRM include:
- Insights about the prospect’s current situation.
- Competitors mentioned during the call. (In fact, after analyzing more than 2 million sales conversations, we’ve discovered that only one-third of competitive deals are marked as such in the CRM.)
- Expectations prospects have for your product or service.
Sales managers can be guilty of overlooking their team’s need for tools that relieve the burden of remembering or noticing all the pertinent information from a call. Even small verbal cues during a sales call can reveal a lot about the current sales process. This can include potential deal risk vectors and next steps for follow-up.
Stage 2. Meeting the Prospect
If qualified, the prospect and the related opportunity will get passed to an account executive. The AE will meet with the prospect to discuss which of the company’s solutions fit your future customer’s needs, and they’ll attempt to close the sale.
However, leads are typically prequalified by a sales development rep or an inside sales rep. As a result, much of the pertinent information about them never reaches the account executive.
Problems that arise at this stage typically include:
- Account executives not being fully prepared for the meeting — they often miss out on a critical insight into the lead’s problem.
- They talk to the wrong person. Today’s B2B buyers are, in fact, buying committees. They may talk to the potential user but not the one who can sign the paperwork.
- Lacking insight results in another problem — the inability to find the best approach or angle to create momentum during the meeting.
- Even if the information is available, parts of it may not be properly conveyed during the handover between professionals on your sales team.
As earlier, sales leaders need to be pre-emptive in helping their team members prevent these highly avoidable missteps. The tools are available to aggregate all sources of information on a client and create one single source of truth.
Stage 3. The Proposal
All the information missed in the previous steps will cause problems when your sales team reaches the proposal stage of your putative deal. Without sufficient insights, reps are likely to recommend inadequate solutions or include too few details to overcome the lead’s objections. This is particularly fatal to deals in the current business climate, where there’s increased pressure to provide thorough reconciliations of client concerns and huge ROI and to win over CFOs.
Stage 4. Closing the Deal
The secret to closing a deal resides in listening and understanding the prospect’s concerns. If you can uncover their deepest need, you can leverage the sales process to close the deal and keep that close ratio nice and high.
Once again, it’s almost impossible to do this without a centralized way to manage and evaluate insights that prospects provide at every interaction with your business. Failing to do so, it’s more likely that your sales opportunity will succumb to some form of deal risk. There are more deal risks to contend with than ever before, from deal relay and champion churn to the doubts of an insufficiently convinced C-suite member at your prospect company.
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4 Best Practices for Sales Pipeline Management
For the last several years, we at Chorus.ai have been focusing on a single goal — to help sales teams make better decisions by uncovering deeper insights from their sales conversations.
As a result, we’ve tried, tested, and uncovered how to close opportunities faster. Here are some examples.
1. Push the Best Opportunities Forward First
It’s important to be scrupulous in identifying the most high-potential deals and prioritizing them. In an uncertain market, immediate cash flow from successfully closed deals can ensure a business stays afloat.
Many businesses lack processes to identify more promising opportunities in the pipeline. For instance, they don’t pass on a key moment from a meeting where a prospect communicated a strong desire to progress a deal. Or their sales development reps may not be qualifying prospects progressively according to product-user fit, buy-readiness, or other metrics.
Without a way to spot signals indicating a lead growing hot or cold, you may miss out on too many opportunities.
To overcome this, build safeguards that prevent missing critical information during sales interactions. Chorus.ai, for example, lets you record and analyze every customer conversation. What’s more, the built-in artificial intelligence will surface the most important insights to deliver crucial information to help close the deal.
The result is greater ease in spotting the most promising opportunities, shortened ramp times, and an improved close ratio.
2. Identify Your Organization’s Key Sales Pipeline Metrics
Many companies lack clear metrics to measure their pipelines. They may review the progress of each deal regularly, but many struggle to track, for instance, their sales velocity.
Defining those metrics means you can monitor sales pipeline performance and spot potential leaks or other problems faster. Your organization will, most likely, have to develop a unique set of metrics that adequately reflects the status of its prospects.
However, generally speaking, the most common data to track includes:
- The number of deals in the pipeline at present
- The number of qualified leads or leads per pipeline stage
- Your average deal size
- Current win rate to establish whether things move as normal or have started stalling
You may wish to add further bespoke metrics to aid your sales pipeline management during the COVID-19 recovery, such as:
- Number of deals in the pipeline per subscription plan/buyer persona
- Number of deals featuring multiple POCs, including CFOs
- Current win rate for deals featuring multiple POCs, including CFOs
3. Update Your Pipeline Often
Your pipeline will change constantly. Your team adds new leads, moves existing contacts to new pipeline stages, and updates information about deals. Without daily updates, your pipeline will get messy and hard to read.
Managing your sales pipeline should be a team effort. Reviewing the progress of current deals together will help surface issues and problems. Discuss and solve them as a group. By reviewing your pipeline with information and insights from customer-facing calls, the team can uncover new winning strategies. You’ll find that more and more of these new winning strategies — from deferred payment terms to bespoke feature packages — emerge in current conditions.
The overall result is a clear picture of the winning approaches your sales reps need to take to close more deals.
There is another hugely important reason for making pipeline reviews as a team exercise. They reduce the need for salespeople to self-assess the existing pipeline. Reviewing the pipeline together helps uncover information that identifies the most promising deals. Selling should, after all, be a team sport.
4. Improve Sales Processes
Another reason sales might stall are bottlenecks caused by outdated processes. A particular cold calling sequence your organization adapted for a bull market won’t fly like it used to. A previous demo format your team used might lack the punch to convince skeptical executives to take a risk on your product. You may not be compiling pipeline reports that provide high-level feedback your sales-enablement professionals need to make targeted improvements.
It’s not easy to identify these aging processes without a deeper insight into your pipeline. However, doing so is a worthy exercise. Removing bottlenecks will improve sales velocity, enable freer adjustment to still-changing sales conditions, and invigorate your team.
Risks Plaguing Your Deals?
The sales pipeline is one of your most critical growth tools. With a healthy pipeline, an organization can retain ballast while riding out COVID-19 by managing pipeline velocity, closing deals faster, and improving its sales processes.
Unfortunately, most organizations suffer from leaky, disorganized pipelines. This is simply no longer an option. Even with flawless processes, you’ll find more deals getting stuck in relay limbo. There is no time to waste on poorly qualified leads, either.
Ensure your team has the tools to share and access critical insights about leads. Tap into customer-facing conversations to analyze and extract critical information that will help you move deals forward. Be unsparing when taking a chisel to your processes and changing things up. No one ever lost anything by being dynamic — and by taking nothing in your sales pipeline for granted, you can steer your company through the present unrest in style.