According to a research by Sales Management Association and Forbes, “63% of executives said that their organizations were ineffective at managing their sales pipelines.”
What is Sales Pipeline Management?
Sales pipeline is a systematic and visual approach for selling a product or service. It shows you exactly where in your sales process the money lies, and Sales pipeline management is all about keeping track of that money, i.e. keeping track of your prospects from the interest stage to sale, and managing them efficiently from one step to the next.
Understand Sales Pipeline and Distinguish It from Sales Forecast
It is quite common to confuse sales pipeline with sales forecast. Let us be clear that these are two distinct sales processes. Sales pipeline indicates all prospects at all stages in the sales cycle, from the phase of introducing your company to formally presenting a pricing proposal. Sales forecast is an estimate of which sales will close in a given time frame. In a nutshell, sales pipeline is all about top of the funnel opportunities; sales forecast is all about closing the deal.
Best Practices for Sale Pipeline Management
- Clearly define your sales process: First thing first, clearly define pipeline stages that are universally understood by your salespeople. There must be no doubt regarding which stage a particular deal belongs in.
- Understand pipeline metrics: The 4 key metrics that every sales rep must use religiously are – a) number of deals in the pipeline, b) the average size of the pipeline, c) the average percentage of deals won, and d) the average deal lifetime before it’s won.
- Understand historical trends: Delve deep into the history of your pipeline to understand whether it has grown over time, or it is growing along with your goals. Only then you can put your current pipeline in context.
- Trim down the size of pipeline and prune it regularly: Bigger is not necessarily better. It is better to have a small pipeline with high-quality opportunities as opposed to having a large pipeline with low/unlikely opportunities.
- Understand your strike zone: Every organization should know which opportunities to focus on and which ones to eliminate. Opportunities significantly older or larger than the deals you usually win are outside the strike zone.
- The stalled deals in the pipeline: They clog your pipeline and convert much slower than the ones quickly progressing.
- Haphazard movements of prospects: Opportunities progressing through your pipeline in a non-linear way have a lower probability of conversion.
- Oversized opportunities: An opportunity of a size significantly larger than the regular ones in your pipeline most probably falls out of your strike zone.
- Varying size of opportunity: An opportunity whose expected value changes 3x or more has again a less chance of conversion.
- Time slippage: Opportunities whose close date keeps getting postponed have a lower possibility of conversion.
Preferred Tools and Platforms
Salesforce Pipeline Management, a Salesforce Service, is a smart and trusted choice of successful sales managers that empowers them with powerful sales analytics and reporting tools.
Salesforce Sales Cloud dashboards enable sales reps to clearly understand the pipeline stages and pipeline metrics, which, as we discussed, are the top two best practices for sales pipeline management.
Salesforce Sales Cloud dashboards show:
- Closed/won opportunities by month
- Pipeline by opportunity stage, opportunity owner, and funnel by stage
- Top pipeline accounts
- Top accounts by closed won deals
- Short term pipeline trend
- Long term pipeline trend
Investing in a good automation software service such as Salesforce Sales Cloud helps a company maintain their sales pipeline health, improve their overall sales process and reduce the waste of time and resources.
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