How to build a sales pipeline for startups
Being able to effectively manage your sales process is crucial to success. Fundamentally, this is the backbone of your business. If it’s weak then everything else collapses.
What is a sales pipeline?
A sales pipeline is a visual representation of the activities that occur to turn a sales lead from a potential customer into a paying one.
Think about the steps involved for you in making a sale, they may involve making an initial phone call to a customer, an in person meeting and then creating a quote which is either accepted or rejected by the customer.
An example sales pipeline inside RealtimeCRM:
Why build a sales pipeline?
The power of the sales pipeline is that it allows you to clearly organise your prospective sales. There’s no need to run through a giant email chain or post-it notes trying to remember at what stage you’re at in your sales process. It’s right there staring you in the face.
Plus you can now apply success metrics easily. With a sales pipeline you can see how many potential sales are at a certain stage and what percentage of potential sales pass from one stage to the next and the average length of time this takes.
This is incredibly useful stuff because it allows you to forecast future sales, your conversion rate - really useful as it’ll give you an idea of how many prospects you need at the top of your pipeline to meet your targets, see the weak points in your sales process and then iterate your sales process over and over again until you produce something that really works for converting potential customers into actual ones.
But you can’t do that without a sales pipeline.
Plus systemising your sales process allows you to become more efficient. If you know there are certain questions that potential customers always ask you. Then you can incorporate the answers into your sales process and thereby cut down on the time spent going back and forth. It’ll help your bottom line and make you look great in front of those prospects.
It also introduces competition into your sales team which is great for two reasons - firstly it pushes your salespeople to excel via peer pressure. Secondly it allows you to quickly ascertain which of your salespeople are closing more deals and also the velocity of closing too.
This is really powerful because there may be something that they’re doing, an extra step hand holding the customer through the pipeline or they’ve produced a really awesome email template that increases conversion that little bit. With a sales pipeline you can take note of this and incorporate it into your sales pipeline more generally so that other team members can take advantage of it.
Remember, the sales pipeline is not a finished product. It has a goal which is to convert more potential customers into actual customers but it’s flexible enough to change over time to become better at achieving this goal.
Creating the stages you need
The stages of your sales pipeline should correlate with your customer’s buying stages.
There are five fundamentals your stages should cover:
- Provide information about the goods or services you’re selling
- Contacting the potential customer
- Needs assessment
- Dealing with objections
- A final agreement
When you sit down with your team to discuss what the stages should be for your sales process make sure you look at things from the buyer’s point of view as well.
The sales pipeline is having an effect on them too not just actions you have to do, so if there are things that you can do to help your customer that correlate with increasing your sales conversion rate then integrate it into your sales pipeline.
You’ve always got to keep in mind that sales pipeline is more about the customer than you. You’re trying to affect certain actions in the buyer with the ultimate action being for them to buy from you. So making the buying process as easy for them as possible should be high on the list of optimisations for any sales pipeline you build.
You also want to create velocity between stages so you move prospects down the pipeline. Discuss with your team what activities do that whether its a phone call or identifying the key decision maker in the buyer’s business.
Review it constantly
As stated previously but it has to be said again. Your sales pipeline is not a finished product, it should be constantly reviewed so it can be improved. Is there a stage where opportunities continually languish and why?
Does it have unnecessary steps that complicate your sales procedure or is there something missing. Every few months look at the important data points, your conversion rates, the average value of opportunities and check to see if they’re improving and especially if they’re degrading. This allows you to reverse mistakes but you can’t do this if you don’t have a formal sales pipeline in place of which you can ask the important questions.