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About the Author
Karen Jackson is the founder of Jackson Solutions LLC, a sales growth advisory firm whose mission is to help B2B small business owners drive top line revenue profitably. Drawing on her breadth of experience as a CEO, entrepreneur and sales executive, Karen helps CEOs reinvigorate their organizations by uncovering their obstacles to growth and developing immediate, practical, actionable strategies for accelerating revenue.

Five Best Practices for Managing Your Company’s Sales Pipeline

KJackson
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Your sales pipeline should be one of your most important business resources. It can give you insight into your prospects and an understanding of your sales team’s competency, while being the foundation of effective forecasting. But successfully managing that pipeline can be a tremendous challenge, especially for small companies with limited resources and lack of processes.  

Too often, a pipeline gets clogged with supposedly can’t-miss deals that fail to close, with salespeople wasting their time chasing prospects that are unlikely to become customers. The result is a pipeline filled with more wishing, hoping – and downright fiction – than bona fide opportunities. When you clear out that clutter, your sales pipeline becomes an organizational tool you can use to grow your business. In fact, one survey by Vantage Point Performance and the Sales Management Association found that companies that effectively managed their sales pipelines grew revenue 15% faster than companies that didn’t.

Use these five best practices to significantly improve your sales pipeline management, increase close ratios, and create forecasts you can count on:

1. Knowand focus onyour target market

A clear and disciplined target market strategy ensures that salespeople aren’t filling the pipeline with prospects that will never close. Defining your target market starts with a clear understanding of your product’s or service’s value proposition. What client problems does it solve, and what separates your offering from the competition? What are the demographic and behavioral characteristics of your ideal customers? Once sharply defined, don’t let your sales team invest time elsewhere or add prospects to the pipeline that don’t belong.

2. Create a sales process mapped to the buyer journey

Once upon a time, a salesperson could walk into a prospect’s office and control the conversation. No more. With all the information available on the Internet today, buyers don’t want to talk to a salesperson until they are much further into the buying journey. Your sales process must reflect the way your target customers make their purchasing decisions, not the way you want to close deals. Your customer relationship management (CRM) tools must be configured to reflect that process.

Each stage should reflect deepening levels of prospect engagement and buy-in to your solution, and end with a specific milestone that advances you to the next stage of the sales process. For example, an exploratory meeting might lead to a demo, which in turn might lead to a proposal, which in turn might lead to a letter of agreement. Arriving at each of these milestones likely includes multiple tasks, and your sales reps should be well trained at how to accomplish them. Watch for clues about where your team members are getting stuck moving prospects through these sales stages so you can identify coaching needs.

3. Establish and monitor frequency metrics for prospecting

 A common mistake I see salespeople make is giving up on an opportunity too early. Research shows it takes an average of nine touches to get through to a prospect. And prospects often go missing during later stages of the sales process. Remember: just because you haven’t heard back doesn’t mean the prospect isn’t interested. It could just mean they’re busy. Follow up using a cadence that reflects the buyer journey. And don’t give up until you get a clear “no.”

4. Track sales stage velocity and conversion rates

If sales stage velocity or conversion rates are declining, it’s a sure signal that something is amiss. For example, if your pipeline is clogged with opportunities that have been sitting for nine months in a sales stage that used to complete in just six months, the velocity of your sales process has slowed. Use these changes in velocity to identify if something has changed and how you can fix it. The same holds true for stage conversion rates. If stage conversion probability used to be 45% but now is trending at 30%, there’s some detective work in order.

5. Play devil’s advocate

During pipeline reviews, ask your salesperson why the prospect shouldn’t buy from you. It’s far more productive than the storytelling that goes on when a rep wants to convince you something good is going to happen. Question reality: Does the prospect have enough pain to make a change? What other projects are competing for their dollars? What stakeholders are not yet on board? Is there a cultural fit? This kind of honest inquiry helps identify and solve the issues that will sink a deal – or convince you to walk away and seek deals with higher potential to close. These “go or no-go” conversations are important at every stage of your sales process.

It takes energy and discipline to incorporate these controls into your sales process, but the payoffs are huge. If everyone on your team follows these best practices, salespeople will be focused only on high-probability opportunities, the quality of your pipeline will increase, and you’ll identify and solve problems that previously would have blindsided you.