Sometimes in B2B sales, it helps to go back to basics. A sales pipeline is simply fundamental to your approach, so ensuring every member of your team understands this process in detail is paramount. It’s true that sales pipelines differ between businesses based on the intricate processes contributing to your sales strategy. However, the defining features and key stages of a successful sales pipeline remain constant. Let’s discuss the meaning behind the term “sales pipeline” and delve into what stages build the most effective and lucrative pipeline processes.
What is a sales pipeline?
The term “sales pipeline” refers to the collection of stages your potential buyers work through to become valuable clients. A new business opportunity will enter your pipeline when they make themselves known to your business. As their interest in your product and purchasing decision grows, they start to move further down your pipeline until they come out of the other side as a client. Your pipeline is built in stages (more on these later), and it is the job of your sales team to fulfill the needs of each potential buyer at these individual stages, to move them onto the next.
As we’ve mentioned, each sales pipeline is different, bespoke to your individual business offering and strategy. However, many pipelines feature similar stages that match the decision-making process of the buyer. These stages are usually outlined within your CRM, enabling your team to keep constant track of where each opportunity stands. Although a pipeline will be built of specific milestones and processes, there’s no limit to how fast or slow a lead will move through this pipeline. Usually, the momentum of pipeline progression is outlined by your team’s ability to obtain certain data from a potential buyer or persuade them to make a certain decision. This, of course, has no structured time limit. Additionally, there’s no guarantee who will and won’t complete the journey, and most importantly, it’s likely some prospects will skip stages.
This means your pipeline must be adaptable. The healthiest sales pipelines ensure the highest number of opportunities complete their buyer journey. As each potential buyer is different, you have to produce a pipeline that can bend to match their preferences.
A sales pipeline is a simple idea, but it’s concept quickly becomes intricate when discussing how to build the most successful pipeline process. To help you ensure optimum sales pipeline management for enhanced results, we’ve outlined the key stages every pipeline should consider. This will help your team prepare for any opportunity and gain the skills needed to maximize their chances of success.
Sales pipeline stages:
1) Prospecting/lead generation
All pipelines will start with a process of prospecting or lead generation. This may be conducted by your sales team through outbound calling, email and social selling, or through your marketing department (or both!). This is a highly important part of the pipeline process but is often overlooked due to its early position. Many forget to include the obtaining of new opportunities when discussing sales pipeline strategy.
Every journey starts with the first step. You can only have a successful sales pipeline if you carefully consider how you approach and execute this fundamental stage. Your prospecting and lead generation efforts offer potential buyers their first impression of your brand and your product. An exceptional first impression doesn’t just fuel your pipeline with opportunity- it improves the quality of your pipeline. Aim to generate leads bearing interest in your product, with a pain point you can solve, increasing the likelihood of future pipeline completion.
2) Lead qualification
After a lead has been generated, or a prospect identified, your team will start to work their sales magic by qualifying each opportunity. This process is usually comprised of asking specific but open questions in early lead communication. These questions help your team understand whether an opportunity is appropriate for your product whilst gathering the data and insight needed to deliver the optimum sales approach. If you sell a product that can only be used by a small number of industries, this process would ensure all opportunities meet those industry requirements.
Additionally, a qualification process helps your team understand purchasing intricacies such as budget, timeframe and the number of people involved in the decision. It is paramount that your team do not move opportunities onto the next stage of the buyer journey without gaining a high amount of qualifying data. If your team lack understanding of lead background and budget, they may waste time attempting to sell an organization a product they cannot use or cannot afford.
It is normal for around 50% of leads generated or prospected to be lost at this stage, especially if you use a wide array of strategies to entice potential buyers. Do not think that a lower conversion rate between the first stages signifies an unhealthy pipeline. It is important to rid your CRM of any dead-end opportunities as early as possible to ensure the leads in which you invest time and budget yield the desired result.
3) Lead nurture
This is usually the stage in which potential buyers stagnate and linger. They start to consider your product and learn how it can help their business, but additionally look to consider competitors. At this stage, your team will need to work hard to help qualified leads understand why your product is worth their investment, and how they can maximize its features and capabilities to gain a return.
Your team can carry out a lead nurture process in many ways. Many organizations use demonstrations or trials to help educate leads about the product and why they should make a purchase. Other strategies include using automated workflows, regular content installments and customized communications. However, without a carefully constructed qualification process, your team will lack the understanding needed to appropriately tailor this section of the pipeline to your potential buyer.
In many senses, a sale is won or lost in this nurturing process. To successfully progress opportunities onto the next stage of the sales pipeline, your team need to be fully committed to delivering an elite nurture experience.
4) Offer and negotiation
Every organization handles this stage differently. Whether you use a face to face meeting, a business proposal or a conference call, the moment at which you deliver and negotiate a purchasing offer is fundamental to sales success. Many teams get nervous about quoting a price for their product, worried that the lead will decide it is too much. However, failing to stand by your product pricing can be highly detrimental. Instantly offering to reduce the price quoted is akin to confessing that your product is not worth the price you ask for! Stand by your prices, and believe your product is valuable.
Your team must always expect to negotiate, especially on price, but additionally on certain product extras or features. Business decision makers are careful with their budget, especially when making high-value decision purchases. However, your team shouldn’t be doubtful; a well-executed offer and negotiation stage usually has a high conversion rate. If your team has conducted careful lead nurture, there’s little reason for the potential buyer to doubt your product is worth the price you’ve quoted.
In this final pipeline stage, potential buyers complete their purchasing decision and become valuable clients. This stage appears the most important, as it delivers the ultimate revenue result upon which we measure sales success. However, it often requires the least amount of work from your sales team.
As we mentioned in the negotiation stage, conversion rates are usually higher at the latter end of the pipeline. Once a lead has been properly qualified and nurtured, they are often keen to use your product or services to better their business success.
A healthy pipeline ensures a consistent number of leads are carried through this final stage, making this process important to your metric analysis. Understanding the number of successfully converted opportunities (now clients) gained in comparison to the opportunities entered into the pipeline offers a vast amount of insight. Although not a stage of action, this final process is key to understanding the successes and improvements of your team.
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