Keep Your Sales Pipeline Healthy Up With These 5 Speedy Tips

Keep Your Sales Pipeline Healthy Up With These 5 Speedy Tips

The basis of CRM software is the sales pipeline: a visualization of where your leads sit in your sales process.

Each CRM tool has a slightly different way of showing your pipeline, but they boil down to the same core principles to quickly demonstrate to the user the condition of their pipeline.

In this guide, we’ll get to grips with the basics of the sales pipeline and how CRM software helps improve its visibility, as well as some other helpful tips and tricks to getting the most out of your CRM software.

What is a Sales Pipeline?

A sales pipeline is a way of measuring the progression of each of your prospects on their journey from fresh lead through to a completed deal.

The stages of the journey your leads take on the way may differ from other businesses, but what’s important is you have a set process through which you funnel your prospects.

One company might find new leads through online forms, then write a personalized email outlining the product and how it can help, which then leads to a video call, which in turn leads to a sales presentation before the deal is closed. Another company may find new leads from off-site advertisements, send offers via email campaign and provide web chat support to close the deal.

It doesn’t matter what your process is, so long as you have clear steps for how you intend to progress your prospects closer to a completed deal.

With your steps lined up from left to right and your leads placed into the column that represents the stage they’re at, you have the beginnings of a working sales pipeline.

What Should a Sales Pipeline Look Like?

Think of your sales pipeline as a funnel, with the widest end at the start and a spout at the end. Your fresh leads represent the wide end of the funnel and make up the most populated part of the pipeline. From there, each stage will lose a number of leads, either because the customer is no longer interested or because they aren’t a good fit for your product.

In this way, a healthy pipeline will always have more leads entering it that in any other stage, with each subsequent stage holding fewer prospects than the one before it until you close deals with the remaining prospects.

Of course, you still want to have a good amount of closed deals! A funnel-shaped pipeline is only one of the healthy signs, but it’s a good rule of thumb to begin with—provided you’re making enough revenue, then a funnel-shaped pipeline is a good indication of either stability or growth.

Keep Your Sales Pipeline Healthy Up With These 5 Speedy Tips

What Can We Learn From Our Pipeline?

Despite the simplicity of the pipeline, there are several functions we can use to find useful information that can improve future selling numbers and budgeting.

There are specialized tools built into many CRM packages that can crunch the numbers in a host of interesting and insightful ways, but knowing the basics can help, especially when working with less feature-packed software.

Conversion Rates

Determining your conversion rates only takes some simple calculations, and can be incredibly informative.

We can work out conversion rates for the entire pipeline (i.e. what is the percentage chance of a new lead making it to a completed deal?) or for one stage progressing to the next (e.g. what is the probability of a cold email progressing to a sales pitch?) using the same formula:

Over a typical sales cycle, what is the percentage chance of lead in pipeline stage A progressing to stage B =

(Number of leads in stage B at end sales cycle /Number of leads in stage A at beginning sales cycle) x100

Let’s use some examples:

Say your pipeline has 100 leads in the first stage of your pipeline at the beginning of your usual three-month selling cycle, and by the end of the cycle you’ve managed to bring 20 of them through to won deals. That means you have a 20% chance for new leads entering your pipeline to be converted into won deals.

Or perhaps you have 40 leads in your cold emailing stage at the beginning of a one-month sales cycle, and by the end of the month 15 of them have progressed to the sales pitch stage. That means the chance of a lead moving from the cold calling stage to the sales pitch stage is 37.5%.

Your Strengths and Weaknesses

Having worked out your conversion rates for your pipeline, you can begin to analyze which areas your sales team is performing best in, and which you need to refine. If you’re only progressing 5% of your new leads from the cold calling stage to the arranged interview stage, then you’ll need to work on your reps’ scripts and up that percentage.

Sales Forecasts

Knowing how your current sales process affects the progression of prospects through your pipeline means you can predict how many deals your team’s likely to close by the end of a specified period.

Using the conversion rates for each stage of your pipeline means you can determine the revenue your team is likely to bring in that sales cycle. Of course, this won’t be 100% accurate, but it’s a good estimate and allows for your business to set better budgets for other departments based off predicted income.

Sales Reports

Armed with your conversion rates and forecasts, you can measure your results against them to see how well your team is performing. Whether under- or over-performing, it’s important to understand where the discrepancy in performance is and either adjust your conversion rates or work on your techniques to make sure you meet targets in the future.

Sales targets

Once you know how many new leads you’ll need per sales cycle (thanks to your conversion rates) to reach your sales targets, you can work on making sure your team is performing enough of the right sales activities in the right pipeline stages to meet those targets.

Keeping Your Pipeline up to Date

Remember, your CRM software’s pipeline is just a visual representation of your business’ sales process—it needs to adapt to the changes in your sales habits, not the other way round.

Whenever you make changes to your processes they should be reflected in your pipeline. The journey leads take through your pipeline should mirror their real-world experience, ensuring the data you gather on your process stays relevant.

Ideally, your pipeline will help illuminate where changes and improvements need to be made, and then give you feedback on how your new practices have affected your overall sales.

Building a Healthy Pipeline

Having explored what a pipeline is and what we can learn from it about our sales process, we can begin to understand what makes up a healthy pipeline:

  • Having a funnel-shaped or top-heavy pipeline
  • Having enough leads in each stage to meet your expected number of conversions
  • Having enough new leads in the pipeline per sales cycle to meet your revenue targets by the end of the cycle
  • Having good conversion rates across each stage of your sales pipeline
  • Having a pipeline that mirrors your sales process

Determining if we have a healthy pipeline is a good indication of whether we have a healthy sales department, or whether there’s work to be done to make sure the business meets its revenue goals.

By using the tips and techniques in this guide, you’ll have a better understanding of what a pipeline is and how to go about using it as the basis of your CRM software.

With a little work, you’ll be able to draw out powerful insights that shed light on your sales process and indicate which stages may be bottlenecking your sales.

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