Managing the B2B sales pipeline is extremely important for any business because it determines the revenue that the company makes.
In a leaky sales pipeline, the company attracts many prospective consumers, but the conversion rate is too low to be of any value. On the other hand, a narrow sales pipeline means that the company doesn’t attract enough prospects in the first place.
With sales prospecting becoming tougher by the year, companies need to balance these two types of pipelines to reach true success. First, let us look at the importance of a B2B sales pipeline and how it can help your company.
Importance of a B2B Sales Pipeline
There are several reasons that the robustness of the B2B sales pipeline is an essential consideration for your company. Let’s delve into the main reasons for the same.
Better Business Management
As per Salesforce, no more than 68% of companies even measure a sales pipeline – bad news for organizations wanting to improve their management strategies.
Using the data you collect from the B2B sales pipeline, you can determine the parts of your business that are performing well or below par. This information can help you make the right decisions for your business.
What’s more, as you enhance the areas of your operation, the efficiency of your B2B sales pipeline will also increase significantly. In effect, the data you collect will be useful when you decide to scale your company as your sales increase.
Better Sales Engagement
You can only engage with your prospects by having a well-defined B2B sales pipeline. Ideally, you should be aware of the different stages within the pipeline to engage leads based on the stage they are in.
More importantly, each step of a B2B sales pipeline calls for a different type and level of engagement. Once you define your pipeline, you will gain a better understanding of these levels of engagement.
Preventing Sales Prospects From Leaving
The primary problem of the sales team of any company, especially product-based companies, is that prospects leak out in the middle of the sales pipeline.
The reasons for sales pipeline leakage are different for every company. As a result, every company needs to collect data from the pipeline to understand where the leakage is occurring.
Once this data has been collected and interpreted, you will be able to patch the leak and improve your sales activities and returns.
Customer Sales Data
In the modern world, catching the attention of a prospect is tougher than ever. Luckily, companies can collect customer data and improve their outreach with a defined sales pipeline.
Here’s an interesting fact: 47% of buyers today expect sales reps to offer personalized suggestions and communications. As such, collecting data can help you zero in on prospect needs and close more deals.
Besides improving the condition of your sales pipeline, every department of your company can benefit from customer data through the rich insights it provides.
Best of all, it saves you the cost of conducting a full-fledged survey. Your regular sales activities can provide you with enough customer data to make prudent decisions for your company.
Improved Customer Acquisition
The primary reason behind having a sales pipeline is to improve your customer acquisition statistics. Your sales pipeline provides you with the deepest possible insight into why your customer acquisition process isn’t performing as well as initially envisioned.
Based on the data that you collect from your sales pipeline, you can pinpoint the exact reasons for an inefficient sales process and take remedial steps.
Sales Progress Monitoring
Did you know that your sales pipeline can help you define precise goals for your sales process? These goals may have to do with your overall sales process or specific stages in the sales pipeline.
Since you need to keep a constant check on the sales pipeline, you can track your progress toward your goals in real-time. This is even more useful if you aim to assess the short-term impact of your decisions because this generally shows up in the statistics.
As you continue to monitor your progress, you can also take steps to improve your ROI and accelerate sales.
How to Manage B2B Sales Pipeline
Managing the B2B sales pipeline is no mean task. Depending on the sector that you are working in, your sales pipeline can have scores of different steps. Each step requires a distinct strategy so you can make the most out of the prospects that reach that step.
It’s true that no sales pipeline can be made 100% efficient. That said, it is possible to manage it effectively enough to optimize your returns from it. Let’s take a look at four steps that will significantly improve your sales pipeline management.
1. Key Metrics for CRM Visibility
The first step toward managing your B2B sales pipeline is determining what your metrics for CRM visibility are going to be. With these metrics, you can determine whether your sales pipeline is performing well or poorly.
Some of the metrics you can optimize as a part of your sales process include:
Outbound Sales Calls
Making calls is an important part of prospecting. In fact, a vast majority of buyers want salespersons to call more frequently and be more aggressive with their prospecting.
Sales pros can analyze outbound sales calls with the help of tools such as Gong.io, TalkDesk, ExecVision, and Chorus. With these solutions, you can determine how many prospects you’ve contacted at every step of the sales pipeline – and how many you can carry forward.
Plus, you’ll gain key insights on how to boost your team’s performance down the road.
Sales Closing Rate
At the other end of the sales pipeline is the number of prospects who actually get converted into customers. Also known as the closing ratio, it’s arguably the most important metric for any business. This is because the number of initial prospects that your sales team can convert to actual customers determines the robustness of your sales pipeline.
To calculate a salesperson’s closing rate, take the number of sales closed and divide it by the total amount of leads. Then multiply this number by 100 to get the percentage of deals won.
For instance, if you successfully close 15 deals out of 60, your close ratio would be:
15/60 x 100 = 25%
In order to determine whether your closing ratio is up to the mark, simply compare it to your competitors’ average rates. If it’s higher, you can be certain that your sales efforts are paying off. But if it’s about the same or lower, it’s best to take a closer look at your pipeline to understand where you’re going wrong.
As per Salesforce, 79% of prospects do not get converted into sales, making it crucial to measure the close rate and gauge your sales team’s performance.
Length of Sales Cycle
The sales cycle is the process that proceeds from prospecting, through the sales pipeline, to the closing of the deal. Simply put, this length should be as short as possible.
A short cycle is a win-win for both sales pros and leads. It affords salespersons more time to capture prospects rather than dealing with the same customer. On the other hand, it ensures that your prospects’ pressing issues are addressed as fast as possible.
One way to speed up the cycle is to reassess your lead qualification tactics – start with prospects that need your product or service and are ready to convert to customers. You can also use a CRM system to seek out problem areas within your pipeline that are contributing to a longer cycle and fix them.
Stage-Wise Sales Retention
The goal of every sales rep is to keep the prospect moving ahead until they’ve been converted into paying customers. Measuring lead retention at each stage of the pipeline clues you in on any roadblocks in the buyer journey.
To gauge the performance of each stage separately, sales executives need to craft an efficient pipeline design. If you have one in place, be sure to tweak and optimize it at every step of the way. Managers can also create a strategy handbook for reps to refer to if their leads are stuck at any point, thus minimizing any chances of leaks.
2. Sample Sales Models in CRM
A CRM model is primarily the design of your sales pipeline. It is the series of steps from capturing prospects to converting them into clients and retaining them.
You’ll find various CRM models, but not all of them will apply to you. That’s why you should assess your company’s financial condition, sector, and other considerations before picking one.
Once you’ve picked the right framework, you can set it in motion with CRM applications such as Salesforce Sales Cloud, Trello, Pipedrive, and HubSpot CRM and bring your sales goals to fruition.
Here are three major CRM models:
1. IDIC Model
This model is made up of four successive steps or actions.
- First, you identify your customers and understand the problems that they are facing.
- Then, you differentiate customers and divide them according to their requirements or your own pre-set criteria.
- Once you know enough about your customers, you interact with them and demonstrate expertise.
- Finally, you customize your product according to your customers.
2. Buttle’s Value Chain Model
Here’s how this model works:
- You first conduct a customer portfolio analysis. Then, use this data to identify significant customers.
- After this, aim to satisfy your customer by using a network of internal departments and outside vendors.
- Post this, you develop a value proposition for your customer.
- Now, you attempt to take steps to manage customer relationships over the long term.
3. Payne & Frow’s Five-Step Process Model
Although it’s called a five-step model, we’ve condensed it down to three:
- In the first steps of this model, you develop a customer and business strategy before interacting with customers.
- Then, you create value for your customers and perform multi-channel integration to deliver this value.
- Finally, you assess the performance of your model using data.
3. Sales Dashboards
More than 90% of companies use business intelligence tools to enrich their prospecting process. But that’s not enough – you also need to visualize your team’s performance through these tools.
Sales dashboards are effective graphic tools that help you do just that. They condense all the pertinent information onto a single screen so you can monitor your progress at a glance.
You can find sales dashboards specifically designed to track wins and losses, opportunities, conversion rates, and more. Google Analytics, Jira, and Smartsheet are some stellar examples of dashboard software that facilitate better decision-making and pipeline management.
However, if these tools don’t cover the metrics you deem important, or you need a custom layout, you can always create your own sales dashboard. Data visualization software like FineReport is a great resource for people with some IT and coding knowledge.
What are the major advantages of sales dashboards?
With sales dashboards, you can oversee your pre-defined customer metrics in real-time. It also helps your sales team save time by showing them which customers provide greater value at a particular point in time.
Sales Performance Management
As stated earlier, sales dashboards help manage the performance of your sales team. With these tools, you can allocate the right resources to the right department, thereby optimizing your sales process.
Sales dashboards are particularly useful if your company deals with physical products because they help you retain the right amount of inventory. They also have the ability to anticipate further demand so you can calculate the right order quantity for your requirement.
Among the major responsibilities of any sales team is to forecast future sales. Powerful dashboards are a great solution for sales pros looking to predict demand, sales, and revenue.
4. Sales Reports
A sales report is a comprehensive overview of your company’s sales activities – and critical for managing your B2B sales pipeline. You can think of it as a more detailed version of the sales dashboard. Using the insights that these reports provide, you can ensure that every stage of your sales pipeline works to the best extent possible.
That said, manually creating daily, weekly, or monthly reports is not convenient at all, which is why you should utilize a sales reporting software program instead. Datapine and Salesmate are a few sales reporting tools that collate all of your KPIs in a neat, visually appealing format.
Here are the advantages of sales reports in B2B sales pipeline management:
Sales reports allow you to understand what your best and worst-performing products are. They provide deep insight into the returns you are getting from specific product categories and the reasons for these returns. When you know which products to focus on, you can bring improvements across the board.
In general, about 50% of your leads won’t be a good fit for your company. Through sales reports, you are able to divide customers according to predetermined criteria and analyze which class of customers is providing you with the best value. This is of great use when you are looking to focus on specific, high-return prospects in the future.
Sales Pipeline Issue Identification
A comprehensive sales report will generally contain information regarding where your sales pipeline is performing well and where it is leaking profusely. This allows you to mend critical issues within your pipeline.
The stages of a sales pipeline vary from company to company and depend on the methods of customer acquisition that a company uses. However, the following steps generally apply to all products.
The main reason that the pipeline metaphor is used for the sales process is that prospects can leave at any stage. When a prospect that has passed through the first stage of the pipeline exits at an intermediate stage, the sales pipeline is said to have leaked.
In general, the ratio of your final number of clients to the number of clients that pass through the first stage of the sales pipeline is termed to be the conversion rate. However, you can also calculate the conversion rate for every stage by calculating the ratio of the output to the input.
After establishing a sales pipeline, its management is among the most important processes you need to set up. A well-managed sales pipeline can be a goldmine of actionable data.
The above four methods of sales pipeline management can be applied across sectors and product categories and will help you optimize and perfect your sales pipeline further.
- Effective Sales Enablement Strategies To Crush Sales Quota - September 26, 2021
- What is Sales Cadence And How It Helps Sales Prospecting Techniques? - September 24, 2021
- 4 Practical Sales Cadence Examples That Will Not Annoy Prospects - September 1, 2021