Build your sales pipeline
There are numerous pre-designed pipeline templates available that you can adopt for your business, but the best pipeline for your business will be specifically designed for you from the ground up. Let's look at how you can build your own pipeline.
Define the right stages for your pipeline
Every business has different needs, sales processes, and goals. This means they also treat prospective buyers differently throughout their selling processes, differing sales cycle lengths, and different stages in the sales cycle. It is important to choose the right number and types of stages for your business. Most businesses follow a six or seven stage sales process and the following stages are some of the most common:
It is also important to identify how long your prospects tend to spend at each stage of your pipeline and the conversion probability of your prospects at each stage. Once you've established this, you will be better equipped to set your revenue goals and track your performance against targets.
Formulate your sales process
Once you've decided on the stages in your process, the next step is to build out the sales process for your team to use when engaging with prospects. A well-structured, repeatable sales process will help them consistently close deals and bring in revenue. Involving your sales team in an open discussion can help you identify what works and doesn't to craft the ideal sales process for your business.
Identify your revenue targets
With your pipeline stages and conversion probability of said stages mapped out, you can now start looking at your revenue targets. Clearly defining your targets for the month or a quarter can help you identify the number of deals you would need to meet your fiscal targets. This can then be used to derive different metrics like the targets for individual sales reps, how many leads they should be following, how many activities they should complete and more. These metrics can act as benchmarks for your sales team to evaluate themselves against, to see where they stand performance-wise and where they should be focusing on.
Put your pipeline into action
Once you've tackled the challenge of building a solid sales pipeline, the next hurdle is getting your team to use it effectively and maintaining the health of your sales pipeline. Your team must make it a habit to add prospects and deals into the pipeline and move them through the stages as a deal progresses. As they proactively and repeatedly push the deals through the pipeline, it will become second nature for your sales team to capture the relevant data at each stage and start improving their conversions.
Maintain a clean pipeline
There is no guarantee that any of the individual deals in your pipeline will actually impact your bottom line. Even deals that are about to be closed could get derailed by a competitor or go cold, and deals that don't seem promising could be won after all. The second scenario doesn't hurt you, but the first one can lead to inaccurate forecasts, inaccurate expectations from management, and unrealistic targets for your sales team.
It is vital to periodically review your sales pipeline for stale deals that are stagnant when compared to your average sales cycle. Remove these deals from clogging your pipeline, then move these prospects to a long-term nurturing list to open up future opportunities.
Analyzing your sales pipeline for
As a direct reflection of your sales process, your sales pipeline will be a static system. It is important for you to constantly improve your sales pipeline through a process of constant trial and error and in-depth analysis, so you can achieve best possible results for your business. Let's look at some of the key metrics you need to isolate and analyze with historical data to help you identify roadblocks in your sales process and address them, leading to a more effective sales pipeline.
- Number of deals in your pipeline
- Number of deals at each stage
- Drop-off rate between each stage
- Conversion rate between each stage
- Average size of your deals
- Average sales cycle length
- Win rate for your deals
- Sales pipeline velocity
Number of deals in your pipeline
This is a metric that you can track to get a very basic understanding of the state of your business. The total number of opportunities in your pipeline and the contacts your team is in touch with will help you plan your resource allocation better. You can bring in more manpower or save on resources, depending on the workload that your sales team is dealing with on a daily basis.
Number of deals at each stage
We've looked at the big picture of your deals but it is equally important to know how these deals are spread across each stage of your sales pipeline with a drill-down. Combining this data with the probability of winning a deal at the different stages, you will be able to deduce the number of leads from each stage that you have to close in-order to hit your targets.
Drop-off rate between each stage
Even the best sales processes are not foolproof and there are always going to be deals that fall through the crack at different stages due to different reasons. But understanding where your team has been unsuccessful in moving the deal forward is key, in order to put necessary corrections in place to drive more deals through the pipeline effectively. Looking at deals that dropped between stages helps you figure out if your engagements are too low, or if your product pitch doesn't match the target audience, or other issues that are bottlenecking your sales.
Conversion rate between each stage
The opposite of your drop off rate, Conversion rate is how successful your process is at moving deals between successive stages of your pipeline. It helps you understand the stages where your sales people perform well and where there is still room for improvement through coaching. Another benefit of tracking your conversion rate is that, any time you notice a shift from the average value, you can immediately pinpoint the stage where the issues stem from and start putting in corrective measures to ensure high conversion rates.
Average size of your deals
Every won deal generates a certain amount of revenue for your business, and the average revenue of your won deals over a period gives you the average deal size. A broad picture painted by your average deal size, is that of how much your business is making and how close you are to fulfilling your quotas for the month or quarter. Drilling down further, you can choose to segment your average deal size by new, recurring or existing customers to build and refine specific strategies to help your sales team maximize win rates across these segments.
Average sales cycle length
Knowing the average time for a customer to go from a prospect to a paying customer will greatly help in understanding the state of your sales pipeline and confidently predict your sales performance. By calculating your average sales cycle length, you can identify deals that have the best chances of closing and the ones that have stagnated for too long, allowing you to clean up your pipeline and adjust your forecasts accordingly.
Win rate for your deals
This is probably the most important metric in analyzing the performance of your sales process and the effectiveness of your sales pipeline. The win rate is the percentage of deals in the final stage of your pipeline that close and result in paying customers. Lower win rates indicate that deals aren't closing which could indicate problems with the overall sales process, allowing you to dig further and put in place the necessary corrections.
Sales pipeline velocity
All the granular metrics we've talked about analyzing put together gives you the sales pipeline velocity of your business. It is the measure of how quickly your sales pipeline drives your revenue by correlating metrics like average deal size, average sales cycle length, number of deals in the pipeline and your overall win-rate. It gives you the most holistic view into the health of your business, where you stand in terms of revenue generated against revenue forecasted, and the adjustments you'd need to make to achieve those targets. By combining the holistic data from the sales pipeline velocity and the granular data from the other metrics we've talked about, you can identify and fix roadblocks, identify opportunities that need greater care and attention, and optimize your overall sales process in the long run.
Implementing sales pipelines
with your CRM
Most modern businesses use a CRM tool to manage their day-to-day sales operations effectively, and a CRM is the optimal platform to replicate your ideal sales pipeline digitally and put it into action. Let's look at how SMBs and growing businesses can leverage Zoho's CRM solutions to build and manage your sales pipelines.
Sales pipelines for SMBs
Sales reps often lose out on prospects due to poor pipeline visibility. Bigin's clutter-free pipeline management tools will give your team complete control over your sales pipelines and ensure you stay on top of every deal that matters. Bigin gives you the option to tailor sales stages to fit your business process with a neat drag-and-drop interface for deal management, so you can perfect your sales process like never before.Explore Bigin
Sales pipeline management for
growing your business
With Zoho CRM, you can create multiple pipelines as well as sales funnels, custom dashboards, and detailed reports to analyze your sales pipelines and processes. This is augmented by AI-driven predictions and conversion data to help sales reps focus on the right deals to push them closer towards meeting their targets for the month or quarter.Explore Zoho CRM
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