What is a sales pipeline?

A sales pipeline describes a particular approach to selling that is founded on the underlying principles of the sales process. It describes the individual steps the sales person takes from initial contact with a potential customer, or prospect, to qualifying that prospect into a lead and further validating that lead into a realistic sales opportunity followed through the different stages until closed.

All sales opportunities arranged along each of the sales steps that make up your sales process is what the sales pipeline represents.

As common as the term may be, many sales organisations today are not making use of this powerful sales management methodology. Why is this?

In most cases, those companies that don’t use sales pipeline management either fail to recognise the benefits it provides or simply don’t know how to shape their sales pipeline to produce a strong sales forecast for their company. It can be a powerful management tool to forecast sales, manage performance but most importantly should be primarily used as a vital part of the sales process.

A question so often asked is how many stages should my sales pipeline contain? If you are not sure about the number of steps then I recommend you to write all of the steps within your sales cycle on paper, and focus on the most important tasks that lead your customer to purchase your product or service. However, do not create too many steps, because managing a sales pipeline with more than 7 stages could turn out to be too time consuming.

Now, this entirely depends on the length of the sales cycle, in many cases such as government contracts, it might be entirely normal to have well over 7 stages that are necessary to take the prospect from lead to closing the deal many years down the line. You can easily get lost inside a flood of data, if you don’t keep a lean sales pipeline involving fewer steps. We have done analysis many sales processes across a number of industries, and have found that on average companies will limit their sales process to four steps.

Lead
Opportunity
Proposal
Customer

It can be represented in a visual form as or on an excel spreadsheet or on a white board on the office but it must be visible to all of those working within the company.

A sales pipeline technique is a great sales tool….it helps you understand you sales process, increase your sales and make you confident about your data. We are happy that we help and coach many clients to build their sales processes around this pipeline concept.

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