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Designing A Sales Pipeline 101

When your salespeople walk into the office every day do you think they get excited about shifting numbers around in a spreadsheet? Does the idea of building new sales models make them salivate? Do they talk to their friends about the 1 percent improvement in their close ratio? I don’t think so.

They do think about ripping through the market like a whirlwind, snatching up every new opportunity that crosses our path. Crushing sales. That’s what they care about when we start each day.

This your comprehensive guide to building and measuring a sales pipeline so that you and your sales team can own your quotas. This guide is, as they say, “quick and dirty”, but will provide you with a starting point for building your sales pipeline.

What is a sales pipeline and what is it used for?

A sales pipeline is a representation of how far along prospects are in the sales cycle. It helps you forecast sales, maintain pace, and reach your quotas.

You should be able to see your average sales pipeline coverage in one glance: a snapshot of how many opportunities are in each stage of the buying process. This helps you stay organized, prioritize your time, and engage in the appropriate sales activities to make sure you are hitting your goals.

What is the difference between a sales pipeline and a sales funnel?

A sales funnel keeps track of all your metrics from the first touch point (like someone visiting your website) to a closed dea, while a pipeline keeps track of leads at each stage of the sales cycle at a given time.

A sales pipeline is designed to show sales reps where their opportunities are in the sales process, providing day-to-day guidance about where to focus and what steps they should take to progress a sale.  Building a sales pipeline means creating new sales opportunities, but working a sales pipeline means taking actions to convert opportunities into new business.

On the other hand, a sales funnel is designed to reveal conversion rates within the sales process, providing insight into potential drop-offs at various stages of the sales process.

Although there is some overlap between a funnel and a pipeline, these tools are complementary.

Stages in a sales pipeline

Every product and service is different, so their sales pipelines will vary accordingly and there is no standard blueprint for every company to follow. But all pipelines have certain stages and considerations in common. When defining your sales stages, consider how someone typically buys your product:

  • What steps are typically required?
  • What do they need to move from step to step?
  • What do you need to do to support that requirement?

At some stages, prospects need to be educated. Sometimes, they need decision makers to approve budgets. Other times, they just need to feel emotionally validated.

Sales managers must define the process that their salespeople will follow, and how this process will address the needs of their prospects at each stage. Some examples are:

  • Qualification
  • Value Prove
  • Evaluation
  • Contract Out
  • Closed Won

Your company may have more or fewer stages in the sales process than another company based on your product/service.

Dealing with potential customers at various stages

Sales pipeline stages are a lot like the stages of romantic relationships. If you don’t properly define the relationship at each stage, things can get complicated real quick!

As you build the stages of your sales pipeline, make sure to define exit criteria for each stage. In other words, what do sales reps need to do or know before advancing an opportunity to the next stage? What are the knowns and unknowns leading up to each stage?

Examples of exit criteria:

  • Prospect must demonstrate decision-maker authority and urgency before moving to the proposal stage.
  • Prospect must demonstrate pain points and an interest in learning how to fix them before moving into the qualifying stage.

Developing crystal clear exit criteria makes sales pipeline management a lot easier. It also helps you make sure you are doing all the right things to progress to conversation.

Conversely, when deals get stuck, it’s always important to understand whether the necessary steps in the sales process were taken. By mapping out the types of interactions you may have with prospects, you can define a strategy that is likely to lead them toward your ideal outcome.

Troops.ai is a great way to automate inspection and catch deals stuck in a particular stage.

Designing A Sales Pipeline 101

You can add managers to these workflows as well as actions that make it easy to make any quick updates in Salesforce.

How to build a basic sales pipeline

Because pipelines don’t grow on trees:

  1. Define the stages of your sales cycle.

Common stages include demo set, qualified, evaluation, contract out, and closed won. You may have any number of custom pipeline stages…and make sure to celebrate the wins with a big deal alert in Slack!

  1. Reverse engineer the math.

Even if we don’t enjoy it, we do need to talk about numbers. You have a revenue target. Calculate the conversion rates from leads to opportunities, and at each stage of the sales pipeline.

Consider: What percentage of opportunities do you expect to convert to closed business? How many opportunities do you need to move through your pipeline in order to close enough business to hit your revenue target? How many leads do you need to contact in order to get that many qualified opportunities?

  1. Create a sales process to work at each stage.

There could be any number of ways to progress opportunities at each stage. Some common activities in the selling process are cold calling, sending emails, leaving voicemails, sending video messages, mailing postcards and even baking cookies.

Determine which actions must occur and information must be collected before progressing the customer relationship to the next level.

  1. Implement the right tools to measure success.

Use a CRM software like Salesforce to quantify the number of prospects in each stage and to track progress.

Use Slack to keep sales teams connected throughout the day and to inspire healthy competition.

Use Troops.ai to track KPIs like sales activities, meetings, etc. and share them with the team in Slack.

Designing A Sales Pipeline 101 - Troops.ai

Metrics to measure the health of your pipeline

As you collect data, here are some sales pipeline metrics to keep your eye on:

  • Number of leads
  • Lead to opportunity conversion rate
  • Number of opportunities
  • Opportunity close rate
  • Average deal size
  • Average sales cycle length

Don’t forget to implement the right tools to help you track and analyze your sales metrics!

Minimizing risks that can shut down your pipeline

The U.S. government proposed a $686 billion budget for the Department of Defense to protect America. What are you doing to protect your sales pipeline?

Here are some of the threats and how you can avoid them:

  • Lost leads – You spent so much time and effort getting leads in the first place. Don’t let them get away easy! Decrease lead response time and improve lead to opportunity conversions by using Troops.ai for Salesforce lead management and real-time lead notifications.
  • Unorganized process – If your sales organization is too loose, get ready to watch it fall apart! Set regular time aside to review procedures and effectiveness.
  • Inability to maintain volume – Poor lead generation? Not enough contacts? Don’t let your marketing team hold your pipeline captive. When sales executives experience downtime, encourage them to do some of their own prospecting.
  • Spending too much time on admin – Sales management can be a time-suck, and if you are constantly looking at the numbers, you’ll end up neglecting the pipeline. Stay focused!
  • Slow progress – Make sure you have enough sales executives in place to hit your numbers. If you have enough manpower but not enough progress, take a deeper look at your messaging strategy.
  • Stuck deals – Troops.ai is great for automating your sales pipeline so it’s never your fault when a deal gets stuck. But if your prospect is the one who is stalling, try the neighborhood technique!
  • Sloppy handoffs – Make sure that both your team members and your prospect(s) fully understand the details of any transition between reps or account managers. Salespeople should be taking notes in a CRM at every stage so new reps know the history of any prospect or account.
  • Confusion among team members about ownership of leads or process – First, make sure your sales process is documented and leads are distributed. Use appropriate software to assign leads to individual reps and, if there is still confusion, pause and host a sales training day.

Go forth and conquer!

Now you know how to build and tweak your pipeline, chase down prospects like a master, and prevent a total meltdown of your process. Drop a line in the comment section below and let us know your favorite pipeline tactics!

Further reading: A sales plan template to guide your business growth