In the world of sales, understanding how to implement an effective pipeline management strategy is paramount.
This article lays out essential steps that enable you and your team to do just that.
From the initial stages of customer contacts to the final closure of a sales deal, we’ll elaborate on every step to help you and your salespeople stay more productive in handling the ebb and flow of the sales process.
Key takeaways
- Sales leaders and process owners are the ones responsible for effective sales pipeline management. To maximize ROI, they must align targets with the process, establish key metrics, define milestones, embed them into workflows, and configure them in the CRM.
- Key aspects of pipeline management include coordinating with marketing, overseeing sales personnel, establishing quotas, performing daily monitoring, and resolving inefficiencies. Continuous adjustments and optimizations are necessary for improving pipeline performance over time.
- Each stage in a pipeline utilizes specific tools, such as CRM systems, business directories, as well as proposal generation and document management software. Integration of CRM software with sales automation and document management tools is fundamental to enhance overall operational efficiency in sales.
Understanding sales pipeline management
Every pipeline is made up of consecutive steps, like a chain consists of separate links.
Maintaining top efficiency at each stage helps the entire chain operate as planned, since the performance of the entire chain is limited to that of its weakest/slowest link.
At the very minimum, the staples of pipeline management include the following:
- Coordination with the marketing team on lead targets, lead generation channels, and potential clients’ profiles
- Overseeing the work of sales personnel
- Establishing quotas and process metrics
- Monitoring execution on a daily basis
- Identifying bottlenecks and resolving inefficiencies
- Providing the sales team with everything necessary to make progress and close deals
Once the sales process is defined and implemented, and the sales team is brought up to speed, the overall efficiency of your sales operations should go up big time, producing more predictable business outcomes and generating higher revenues.
Key stages in a sales pipeline
The number of sales pipeline stages can vary depending on the company, products or services sold, as well as the complexity of each sale.
However, the steps below can be used as a reference for building your own pipeline, one that reflects the realities of your business domain.
Lead generation
At this stage, new leads are captured from various sources and added to the CRM for further processing.
Tools and methods used: contact forms, direct input in the CRM after cold calling or receiving an email
Lead qualification
This is where leads are analyzed, assessed, and assigned a particular score for effective processing prioritization.
Tools and methods used: business directories, economic reports, custom scoring matrices
Requirements discovery
At this point, your sales team clarifies product/service requirements with the potential client and produces quotes and estimates.
Tools and methods used: custom methodologies, prototyping tools, mind maps, workshops
Proposal creation and presentation
At this stage we know what the potential client is looking for; therefore, we put together a formal commercial proposal.
Tools and methods used: custom templates, CPQ tools, integration with CRMs, document management software
Negotiation
Few proposals are accepted without negotiations or at least a discussion of unclear points.
This is the stage where the parties make sure their expectations and understanding of the scope are aligned.
Tools and methods used: conference calls, email, deal room software with document tracking.
Closing
If you’ve reached this stage of the pipeline, you’ve won new business.
There are just a few final strokes separating you from signing the contract and kicking off the project or shipping your product.
Tools and methods used: eSigning solutions, document management systems, payment gateways or invoice generation software
Now that we’ve learned something about the different stages of the sales pipeline, let’s take a look at the practical steps associated with setting up your sales process and building your pipeline.
How to set up a pipeline for max ROI
It goes without saying that maximizing ROI and revenue growth are the key reasons for sales leaders to build a well thought-out and fine-tuned pipeline for effective sales.
Here are a few things to think about while executing on your sales strategy.
Identify targets, align them with your process, define milestones and configure them in the CRM
Don’t forget that any planning should be based on targets.
That’s exactly why the first thing you should do is to define your revenue goals and then work your way up the funnel to:
- Calculate the number of sales opportunities you must have to generate target revenue with your current win rate
- Calculate the number of qualified leads that must turn into sales opportunities with your current conversion rate
Once you have your primary numbers, go over your sales process to understand the waypoints that every qualifying lead goes through from the moment it falls into your inbox to the moment it turns into a contract.
These inflection points become your milestones that need to be configured in your CRM for ease of tracking and sales forecasting.
For maximum efficiency, make sure that every lead has the necessary attributes filled out by sales reps at every stage.
Come up with key metrics
Key metrics are needed for gauging your pipeline velocity at any moment in time and understanding where your process could be tweaked for extra performance.
They include the total lead and opportunity count, as described above, plus an arbitrary number of your own metrics — for example, average deal size — for effective pipeline management.
Other averages could include:
- Lead processing time
- Proposal generation time
- Number of deals closed
- Sales cycle length
- Number of proposal iterations
- Time until first response
- Number of follow-ups during the lead stage of the sales process
- Any other sales pipeline metrics relevant to your sales process.
All of these metrics can be embedded into your workflows and accounted for during pipeline review.
Execute and track
Once the pipeline is configured, it’s time to try it in action.
Let your sales team work according to the new rules and track their performance while collecting their feedback and suggestions to be used for the next stage of pipeline review.
Make adjustments
Even flawless execution is pointless without progress and optimization, which is why it’s so important to take note of potential improvements and implement them at your earliest opportunity.
Now that our conveyor is up and running, let’s proceed to tips and techniques on how to manage it efficiently to consistently close deals.
How to manage your sales pipeline and achieve better sales
Here are a few recommendations on keeping your pipeline in shape, but there is no doubt that you’ll come up with more of your own as you get better at effective pipeline management.
Don’t forget to nurture leads to prevent lead leakage
Lead leakage is the unfortunate process of losing leads due to negligence or process flaws.
If the number of leads is considerable, some may remain unscored, unassigned, and uncontacted (or contacted too seldom or late), resulting in a potential loss of revenue.
The rule of thumb here is to leave no stone unturned and attend to every lead with an equal amount of attention and effort right from the get-go.
When some of your leads grow old and become unresponsive, don’t forget to nurture them on a regular basis and the result may be highly rewarding.
Establish a steady cadence for every lead to do away with long sales cycles
When a lead gets stuck for too long at a certain stage of your pipeline, it may end up being lost due to inactivity.
Designate how long a lead can remain untouched without updates by the sales team and stick to it.
A steady migration of leads through the pipeline benefits everyone, but it’s your role to put the process in motion.
Step up your presentation game and impress potential customers time after time
There are few things more disappointing than knowing that you are more than capable of delivering a project and then failing to convince the client due to poor presentation.
Your presentations and proposals must look professional, remain stylistically consistent at all times, and be informative to save the reader the trouble of tedious back-and-forth messaging or phone calls to clarify details.
A great idea would be to use specialized proposal software like PandaDoc to tick off most of the important pipeline management boxes with a single tool.
With PandaDoc, you automatically cover such post-lead stages of your pipeline as collaborative, template-based proposal creation (including the super handy import of quotes and product data from your CRM of choice), document status tracking, negotiations, e-signing, and even secure payments!
Define follow-up scenarios and automate them to restart your conversations and rekindle your prospects’ interest
Follow-ups are super important.
However, as the number of leads in the pipeline grows high, manual follow-ups become challenging. Fortunately, automation helps solve this problem.
Create a number of personalized follow-up sequences for different types of leads and use them for nurturing and reactivation long after they have been classified as lost or unresponsive.
Configure your CRM UI to make sure you always have a bird’s-eye view of your pipeline
A sales pipeline is essentially a real-time visualization of your sales funnel with a detailed view of every lead and opportunity.
In order to be able to get an instant snapshot of your current sales situation, make sure that this visualization is properly configured in your CRM.
All modern CRM systems provide customizable dashboards that allow you to track your daily progress, identify process bottlenecks, and forecast your monthly sales with sufficient accuracy.
Make sure you have a detailed sales dashboard to stay on top of things at all times.
Pay attention to scoring and early-stage estimates for each lead to enable financial forecasting
Many sales teams forget about the importance of lead scoring and sizing, which creates a blurry image of monthly and yearly forecasts and interferes with lead prioritization.
Make sure that some form of rough lead sizing is performed as early in the process as possible and potential business outcomes are calculated to give you an idea of the size of your potential portfolio.
Put document management platforms to good use. Automate!
CRM software like HubSpot, Monday.com, Zoho, Pipedrive, and Salesforce offers everything needed for end-to-end sales pipeline management on top of customer relationships management.
Combined with sales automation and document management products like PandaDoc through two-way integrations, they deliver immense value to businesses looking to streamline their sales and unlock new levels of operational efficiency with a complete pipeline management software package.
Take a look at the ways PandaDoc makes it easier to navigate your sales activities with confidence:
- Create, update, revise, and send amazing proposals from a single all-in-one tool
- Use countless pre-made templates or build new ones in no time
- Store all of your important business documents in a single hub
- Take advantage of CRM integrations to automatically populate your documents with up-to-date product information
- Get your documents e-signed without leaving PandaDoc
- Accept prepayments or full payments via a built-in secure payment gateway
Ready for a test drive? Sign up for a free 14-day trial today!
Need a bit more convincing? Schedule a demo to see everything with your own eyes.
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.
