Pipeline management is a sales practice that you will find at most mid-market and enterprise level companies. Your pipeline, or funnel, display all of the deals or opportunities that have presented some interest or scheduled in an appointment. Typically, the top of funnel is much larger in volume than the bottom as deals can typically be lost at a higher rate as prospects go down the funnel.
Here are three advantages and reasons why small businesses should also be sure that they are managing a pipeline to help grow sales.
1. Understand where clients are in the sales process
2. Forecast sales
3. Where do clients get stuck? Improve your sales process
The first question to ask is, what is your sales process? What is the ideal customer journey starting from the first interaction to the last where a deal is made?
Many small business owners will label prospects as cold, warm, or hot. Expanding on this to build a better sales funnel, ask yourself what would make a prospect go into one of those three buckets? Furthermore, what are the checkpoints in your process? You may have an initial discovery conversation to uncover pain points, sending over a quote or proposal, possibly a negotiation stage, and eventually a decision or closing stage.
Building out a simple, yet understandable funnel will help you focus on your closest-to-close customers, which are at the bottom of your funnel, to make sure none slip through the cracks. Transitioning to our next point, it will help you answer the question in seconds of who is projected to close this week or this month.
Having a report that shows you who you have marked as a potential close for a given week or month allows you to do a few things.
First, it helps you understand if you have the opportunity to hit your overarching sales target. Adding projected revenue for your deals and updating the accuracy as you go further in discovery helps improve forecasting.
Second, many companies and sales reps average around a 20% close rate and by using this as a benchmark if your CRM does not calculate close rate, you can better understand how many deals or opportunities you need to generate in a given time period to give yourself the best chance to hit your target.
Third, knowing your close rate and how many deals you need to generate, you can run a report on how many activities you generated in a month and how many deals you created in that same month to find out how many activities it typically takes you to generate a new deal. Now, you have improved sales math and reason behind why you should be making 30, 50, or 100 activities to communicate with customers a day.
A funnel is wider at the top than the bottom for a reason. Again, as clients go down the funnel, typically many get removed out which can lead to that 20% benchmark close rate.
CRM enables you to run “Lost” reports of deals that were in your pipeline. Examining where these deals were in the purchase process and why they are no longer being pursued can help salespeople improve their process, as well as find coaching opportunities to overcome specific objections. At times, management will find process, product, or service fixes to make to help salespeople increase sales from Lost reports.
Lastly, if you have built out custom fields in your CRM to make your data entry specific to your discovery conversations, you can run reports on your Won deals to see what type of client you have partnered with to strengthen your ideal customer profile.
It takes minutes to set up your own custom funnel in Salesdash CRM. It’s very important that you spend a good amount of time figuring out what is the best way to build out your stages. The simpler and more concise, the easier it will be to manage.