Account churn, lack of focus, internal churn — there are multiple possible reasons why your sales pipeline may be experiencing bottlenecks, snags, and, ultimately, losses in revenue.
In fact, a report by LinkedIn shows that an estimated 24% of forecasted deals fall by the wayside.
So, what’s going on and how can we do better? What it comes down to is pipeline management and understanding that it’s not a set-it-and-forget-it process. Rather, pipeline management is a practice that, if you pay attention and take the right actions, will help to boost your revenue.
Let’s take a look at exactly how.
The basics: what is pipeline management?
Pipeline management refers to the process of managing a sales pipeline or a project pipeline from start to finish.
It involves overseeing and coordinating all the activities and stages involved in moving prospects or projects through the pipeline, from the initial lead generation or project initiation to the final sale or project completion.
The pipeline management process typically includes identifying potential prospects or projects.
Qualifying them based on predefined criteria, tracking their progress through various stages of the pipeline, allocating resources, managing deadlines, and ensuring that all the necessary activities and milestones are completed on time and within budget.
According to Harvard Business Review:
- Companies that defined a formal sales process experienced an 18% difference in revenue growth when compared to companies that didn’t.
- Companies that employed specific pipeline practices saw 28% higher revenue growth.
Clearly, you've got a lot to gain.
Here is an example of how a company can use pipeline management to boost their revenue:
Let's say that a software company wants to increase their revenue by improving their sales pipeline. They start by identifying potential leads through online marketing and referrals. Once a lead is identified, they use predefined criteria to qualify it based on the likelihood of conversion.
They then move the lead through various stages of the pipeline, tracking progress and allocating resources as needed. This involves assigning sales resources to the lead, providing demos and presentations, and answering any questions or concerns the lead may have.
As the lead progresses through the pipeline, the software company uses data and analytics to gain insights into their pipeline's performance and identify areas for improvement. They optimize conversion rates by tweaking their sales process, and they reduce the time-to-close by streamlining their pipeline.
In the end, the software company successfully closes the sale, converting the lead into a paying customer. By using pipeline management, they were able to efficiently move the lead through the pipeline, resulting in increased revenue and improved business outcomes.
Stages in the sales pipeline
Right now, companies are using sales pipelines — but are they seeing results from any of their activities within each stage of the pipeline? A study found that 68% of companies are currently conducting lead scoring, but only 40% of sales team professionals saw any discernible value in their activities.
So let’s take a look at the various stages of a sales funnel:
Step #1: Lead generation or prospecting
The first stage of pipeline management involves identifying potential leads or projects that could convert into sales or successful project outcomes. Prospecting can be done through various methods such as cold-calling, email campaigns, referrals, or online marketing.
Step #2: Lead qualification
Once a lead is identified, the next stage is to qualify it based on predefined criteria. This involves determining if the prospect meets the company's requirements and if they are a good fit for the company's products or services. The goal is to identify the most promising leads that are most likely to convert into sales.
Step #3: Follow-up
After the lead is qualified, the next stage is to follow up with them to establish a relationship and build trust. This can be done through various means such as phone calls, email communication, or in-person meetings. The goal is to understand the lead's needs and provide solutions that address those needs.
Step #4: Proposal
The proposal stage involves presenting the lead with a proposal that outlines the company's products or services and how they can address the lead's needs. The proposal should be tailored to the lead's specific needs and should include pricing, timelines, and other details.
Step #5: Negotiation
Once the proposal is presented, the next stage is to negotiate the terms of the agreement. This involves discussing the proposal and addressing any concerns or objections the lead may have. The goal is to arrive at a mutually beneficial agreement that meets both the company's and the lead's needs.
Step #6: Conversion
The final stage of pipeline management involves converting the lead into a paying customer or successful project outcome. This involves finalizing the agreement and ensuring that all necessary activities and milestones are completed on time and within budget.
Is pipeline management a requirement for B2B companies?
In a word, yes — pipeline management is a requirement for B2B companies.
In fact, it's essential for B2B companies to have a robust pipeline management process in place to ensure the efficient management of their sales or project management process.
Without effective pipeline management, B2B companies may miss out on potential sales or fail to deliver successful project outcomes, resulting in lost revenue and missed business opportunities.
Let’s take a look at how, specifically, pipeline management can benefit various stakeholders within a B2B company.
Sales Teams
Sales pipeline management can benefit sales teams by helping them track their progress and identify areas where they need to focus their efforts to move prospects through the pipeline more efficiently. By optimizing the sales process, sales teams can improve their conversion rates and close more deals, resulting in increased revenue.
Project Managers
Pipeline management can benefit project managers by helping them track the progress of projects through various stages of the pipeline. This can help project managers identify potential bottlenecks or issues that could cause project delays or cost overruns. By managing projects efficiently through the pipeline, project managers can deliver successful project outcomes and increase customer satisfaction.
Marketing Teams
Pipeline management can benefit marketing teams by providing them with insights into the effectiveness of their marketing campaigns. By tracking leads through the pipeline, marketing teams can identify which campaigns are most effective at generating qualified leads and adjust their marketing strategy accordingly.
Executives/Decision-Makers
Pipeline management can benefit executives by providing them with visibility into the company's sales or project management process. By tracking key performance indicators (KPIs) such as conversion rates, sales velocity, or project completion rates, executives can make data-driven decisions that optimize the company's performance and drive revenue growth.
Benefits for B2B organizations
Add a highlight “how does pipeline management help B2B companies?
- Better revenue predictions
- Accurate team performance measurement
- Prioritize high-potential leads
- Learning more about ICPs/IAPs
- More actionable data insights
- Identify areas of improvement faster
Implementing pipeline management comes with a host of upfront (and ongoing) benefits for B2B companies. Let’s take a look at the range of impacts you can expect:
Better revenue predictions
By managing the pipeline, B2B organizations can forecast their revenue accurately. They can track the status of each deal in the pipeline and determine the probability of closing the deal. With this information, organizations can estimate their future revenue and make informed decisions on investments, expenses, and budget allocation.
Accurate team performance measurement
Pipeline management allows B2B organizations to track the performance of their sales team. By analyzing the pipeline data, they can identify the areas where the team is performing well and where they need to improve. Organizations can also set targets for their team based on the pipeline data and measure their performance against those targets.
Prioritize high-potential leads
B2B organizations can use pipelines to prioritize leads based on their potential value. Analyzing pipeline data can help to identify the leads that are more likely to convert potential customers. This helps the sales team to focus their efforts on high-potential leads and increase the chances of closing deals.
Learning more about ICPs/IAPs
Pipeline management can provide valuable insights into the characteristics of ideal customer profiles (ICPs) and ideal account profiles (IAPs). By analyzing the data in the pipeline, B2B organizations can identify the common traits and behaviors of their most valuable customers. This information can be used to refine their marketing and sales strategies and improve customer acquisition and retention.
More actionable data insights
Use pipelines to collect valuable data about their customers and sales processes. By tracking the progress of deals in the pipeline, organizations can gather information on customer behavior, preferences, and pain points. This data can be used to generate insights that inform marketing, sales, and product development strategies.
Identify areas of improvement faster
Snags in the pipeline can illuminate areas ripe for sales process improvement. By analyzing the pipeline data, they can identify the stages where deals are getting stuck or taking too long to close. This information can be used to streamline the sales process and shorten the sales cycle. B2B organizations can also use pipeline data to identify opportunities for A/B testing and experimentation to improve the performance of their sales process.
Pro-tips for successful pipeline management
5 steps for designing a reliable pipeline
1) Clearly define and execute a sales process or strategy
Before setting up a pipeline, it is crucial to have a well-defined sales strategy and process. This involves understanding the target audience, identifying the ideal customer profile, creating a messaging strategy, and outlining the sales process from lead generation to closing the deal. Having a clear sales strategy and process ensures that the pipeline is aligned with the overall sales objectives and helps in measuring the effectiveness of the pipeline.
2) Define your sales KPIs
It is important to identify the key performance indicators (KPIs) that will be used to track the pipeline's performance. This includes metrics such as lead-to-opportunity conversion rates, win rates, average deal size, and pipeline velocity. The pipeline velocity equation (the total value of deals in the pipeline divided by the average time it takes to close a deal) helps to measure the health of the pipeline and identify areas for improvement.
For more granular sales KPIs (and the exact metrics you'll need to track them), check out our latest article.
3) Ensure sales team buy-in and alignment with marketing
The success of the pipeline depends on the collaboration between the sales and marketing teams. It is essential to align the teams with the same goals and messaging, and to communicate the importance of the pipeline and how it fits into the overall sales strategy. The teams should also agree on the lead qualification criteria and handoff process to ensure that the right leads are entering the pipeline.
4) Establish your most key metrics:
Begin by defining the stages of the sales process and establishing a system for tracking deals is essential for pipeline management. This can be achieved by using a customer relationship management (CRM) software that allows filtering the pipeline by team, rep, or territory for customized insights into the business. The pipeline stages should be defined based on the sales process and the criteria for advancing a deal to the next stage.
5) Choose your pipeline management software:
Choosing the right pipeline management software is crucial for effective pipeline management. The software should have features such as customization of the pipeline stages, filtering and sorting of deals, and reporting and analytics capabilities. It should also integrate with the other sales and marketing tools used by the organization.
6) Improve lead gen effectiveness
Finally, to ensure a reliable pipeline, B2B organizations should continuously focus on improving lead generation effectiveness. This includes identifying the sources of high-quality leads, optimizing lead qualification criteria, and continuously testing and refining the messaging and tactics used for lead generation. By doing so, B2B organizations can maintain a steady flow of high-quality leads that enter the pipeline and increase the chances of closing deals.
Pipeline management: Optimize your results and boost revenue
Managing a pipeline is an activity unto itself — but once it becomes a well-oiled machine, there are few extra best practices you can incorporate into process that will help optimize your results long-term:
First off, keep a clean pipeline. Remove irrelevant or outdated information from the pipeline, such as deals that are no longer relevant, duplicate entries, or leads that are not actively engaging. A clean pipeline helps to keep the focus on the most important deals and ensures that the pipeline metrics are accurate.
Next, monitor your pipeline metrics at a cadence that works for your industry. Look at pipeline velocity, conversion rates, and deal size regularly. This helps to identify trends and patterns in the pipeline, which can inform decision-making and lead to better pipeline management.
From here, make conducting team reviews a regular habit as well. Regular reviews with the sales team provide an opportunity to discuss the status of deals, identify potential roadblocks, and make necessary adjustments to the sales process. These reviews can also help to ensure that the team is aligned with the sales strategy and that everyone is working towards the same goals.
Make sure, as well, that the team understands that following up is non-negotiable. In fact, it’s crucial for maintaining engagement and moving deals forward. This includes following up after a meeting, a call, or even after no-shows or no answer. It is important to stay top of mind with prospects and maintain a sense of urgency to ensure that deals do not get stuck in the pipeline.
Finally, feel empowered to make decisions about low quality leads — simply drop them and focus on the most important ones. Not all leads are created equal, and it is important to prioritize high-quality leads that are more likely to convert.
This involves regularly evaluating leads and dropping those that are not a good fit or are not actively engaging. Focusing on high-quality leads helps to improve conversion rates and ensures that the sales team is working on the most important deals.
Key Takeaways/Conclusion
Ready to create a more effective pipeline management practice for your B2B organization?
Let’s recap what we’ve explored today:
- Effective pipeline management involves setting up a well-defined sales process, defining key performance indicators, monitoring pipeline metrics, regularly reviewing the pipeline with the sales team, and following up with prospects.
- Part of the “art” of pipeline management is maintaining a clean pipeline, prioritizing high-quality leads, regularly monitoring pipeline metrics, and conducting regular reviews with the sales team.
- Additionally, pipeline management is closely tied to lead generation and requires a collaborative effort between the sales and marketing teams.
- By following these best practices, B2B organizations can improve the health of their pipeline, increase conversion rates, and ultimately drive revenue growth.
- And, with the help of technology like Captain Data’s Sales Navigator workflows, you can automate the lead generation aspect of pipeline management and allow sales teams to focus on what they do best — closing deals.
{{sales-component}}
