A sales pipeline is a digital tool which can improve team effectiveness and increase revenue. Here we cover all it's important details.
A favourite party trick of the famous polymath John Von Neumann was to ask his friends to randomly call out a page number from the telephone directory, after which he would proceed to recite from memory the names, addresses, and phone numbers of all the people on that page.
For those of us who are not quite as gifted as Von Neumann at remembering names and numbers, a sales pipeline is a great alternative to instantly visualise important customer information in a matter of minutes.
A sales pipeline is an important digital tool that helps sales managers get an instant overview of the performance of their team. By letting them visualize the number of prospects at every stage and make workflow adjustments accordingly, sales pipelines enhance sales team effectiveness and increase revenue.
In fact, a survey conducted by the Harvard Business Review found that companies with a strategy for sales pipeline management saw a 15% year-on-year increase in revenue as compared to companies without.
This article will discuss in further detail:
A sales pipeline is simply a visualisation of your customers at different stages in the sales process. It can be displayed in many ways; for example, using bar charts, funnel diagrams, or flowcharts. The information in a sales pipeline indicates how many customers are in each stage of the purchase process at any given point of time, giving you an idea of your potential revenue.
Here is an example of what a sales pipeline looks like in action:
Using this information, sales managers can get information on:
Creating a sales pipeline is one thing but being able to effectively manage it is another. Without proactive management and regular updates to your sales pipeline, it will end up becoming quickly obsolete, and adding no value to your sales process. Some advantages of sales pipelines are:
Although the terms sales pipeline and sales funnel are often used interchangeably, it is important to know that they are not the same.
A sales pipeline is a detailed visualization of the current position of prospects in the sales process. It offers data on the stage at which prospects are currently from the salesperson’s perspective – showing customers at the contact, qualification, proposal, or closing stage, as an example.
On the other hand, a sales funnel is the visualization of the customer journey that turns a prospect into a lead, viewed from the customer’s perspective. Some of the stages in this funnel are awareness, interest, evaluation, purchase, etc.
While a sales pipeline measures the effectiveness of your sales team by assessing how fast customers progress through the sales process, a sales funnel measures the impact of your lead generation and conversion efforts.
Both these visualizations are usually complementary, since marketing efforts result in more sales, and sales teams are responsible for utilising marketing materials to encourage conversion. However it is important to understand the distinction in order to make effective strategic decisions.
Every business operates differently, which means that the sales pipelines for each business will also differ. Generally, there are seven stages of a sales pipeline, which are:
Data from Salesforce reveals that 81% of sales representatives believe that it is important to have an overall view of data across the entire customer journey. However, many businesses still employ manual methods of processing data and only 49% of companies have fully integrated sales CRM systems.
Some key tips to building a successful sales pipeline are:
Trying to process leads manually can often hamper the way your team manages and interacts with prospects. Consider using digital solutions where possible to reduce the risk of lengthy sales cycles. Contractbook, for example, helps to speed up contract automation, especially in the later stages of the sales pipeline, ensuring that sales can be closed as quickly and effectively as possible.
A sales pipeline on its own is not enough to increase sales and customer loyalty. You need to align the data and insights gained from a sales pipeline with other CRM solutions to get a more comprehensive view of your customer and sales teams which will give you a more holistic view of whether you are succeeding in your overall company objectives.
The insights from your sales pipeline should inform your existing sales process or help to create a new one. Constantly test and optimise to identify a framework that your team can follow and be agile in shifting your sales process to align with the realities of what is happening in your sales pipeline.
The increasing popularity of digital customer relationship management (CRM) solutions such as sales pipelines has greatly eased the process managing sales teams in today’s era. However, sales pipelines are just the tip of the iceberg, and several other solutions can be used in cohesion with them to improve the efficiency of sales teams and enhance their effectiveness at converting leads.