How does a person go from never having heard of your business to becoming a loyal customer? The answer to this question is vital to developing a good marketing strategy and learning how to convert more people. But before you can answer, you must first understand your customers’ journey. Therein lies the real importance of having a sales pipeline – it’ll help you visualize the steps one takes between being a lead and being a customer and understand where each individual contact is on that journey. You can, then, personalize their experiences and adjust your strategies to what is most likely to convert them. And at the end of the day, isn’t that what it’s all about?
What is a sales pipeline?
A sales pipeline is a visual representation of the sales process as seen through the eyes of a sales representative. It typically shows different stages that a person goes through between being just a lead and becoming a customer. This allows professionals like Movers Development to better understand how leads progress to customers and what steps need to be taken at which stage to facilitate the process.
The importance of having a sales pipeline
Different businesses have different conversion processes. This means that there is no blueprint to simply copy; each business needs to create its own sales pipeline. Why bother with all that extra work? The answer is simple – sales pipelines have a lot of benefits so having one is simply worth the effort. With a sales pipeline, you can:
Nurture and follow up on leads
If you’re looking to double your traffic and increase your conversions, you cannot just let good leads fall by the wayside – you should follow up on their visits. But how will you know which leads to nurture and which to let go? A sales pipeline helps you determine this. You’ll be able to determine where in the pipeline a specific prospect fits and follow their progress (if there is any). This allows you to section your mailing lists, have better statistical oversight of your process, and even personalize your approach to customers.
Handle different leads better
It’s important to remember that moving leads need to be handled differently at different stages of the sales process. Someone who has just learned about your business will require more information about your products or services while someone who is on the verge of converting already will find the same type of information boring. So it’s important to know how to handle potential customers at different stages of the sales process. The sales pipeline will provide you with the insight necessary to figure out where a person is in the process and how to treat them. This personalized approach will improve conversion rates and increase sales.
Increase the productivity of your team
A sales pipeline exists to help you do business in better, more efficient, and more streamlined ways. It is, therefore, primarily your sales team that will be using it. There are many things sales representatives can learn from a sales pipeline, including:
- which stage most customers fall into (and therefore, which stage needs the most representatives assigned to it),
- at which point most prospects drop out (and therefore, when you need to follow up more),
- where in the process a specific contact is (and therefore, which sales representative is most suitable for them),
- if there is any point in the pipeline where your involvement is not necessary (and therefore, where you can eliminate some business processes), and more.
These insights should drive your strategies. By learning from your pipeline, you can better allocate resources and do business more effectively. This is essentially the importance of having a sales pipeline – it’ll help you better organize your business.
Measure your success at various stages of conversion
It’s important to know what your business is good at and what can be improved. This is one of the things that a sales pipeline can reveal. You might be doing a good job at spreading awareness about your brand and collecting leads, but not so good at actually closing the deal and making the sale. You’ll see this in your pipeline – there’ll be many leads and prospects in the beginning, then they’ll drop off. On the other hand, you may have a great online moving calculator that converts almost everyone who uses it, but not be very good at attracting people and guiding them far enough into the pipeline to actually get to the point where they need a price estimate. You will also be able to spot this in your pipeline.
A sales pipeline can, therefore, reveal how successful you are at different aspects of your work. With clearly defined stages, you can also clearly define metrics for the different stages. Then you can use those metrics to evaluate your strategies and processes. You’ll spot and fix issues a lot faster than if you adopted an entirely holistic approach.
More accurately predict revenue
Before you can develop a good business plan, you need to be able to predict revenue. An accurate prediction will tell you how much money you have to work with and help you determine your budget for different processes and campaigns. An inaccurate prediction, on the other hand, can harm your business; you might end up with a lot less in your budget than you anticipated and need to drastically change your plans on short notice or risk being in the red. But with a sales pipeline, you’ll be able to keep an eye on your earnings. Use the metrics you developed for different stages to determine whether you are still on track or not. If you notice that you’re lagging behind in certain aspects, consider investing more in those areas.
How can you build a sales pipeline?
If you are now convinced of the importance of having a sales pipeline, it’s time to think about creating one. First, you’ll need to identify the stages of a typical sale for your business. Most sales pipelines define at the very least four stages: prospecting and qualification, interaction, proposal and quotation, and closing. However, you may need to add more stages depending on your industry. Next, you’ll want to set goals for each stage.
Think about what success means at different points in the sale and how it can be measured. Then, define the factors that push people through the pipeline and think about ways to facilitate the process. Finally, make it a routine to use the pipeline. This will help you take advantage of it without too much effort.