As per Forbes, organizations that manage sales pipeline accurately witness a minimum of 10% YOY growth in revenue.

What is pipeline management in sales?

Pipeline management in sales refers to the process of systematically managing and tracking the different stages a prospect goes through in a sales process. It starts from the first stage of lead qualification all the way to closing the deal. Sales pipeline is also referred to as the visual representation of the buying journey of all potential clients. 

An effective Pipeline management is essential for sales reps to understand and predict the flow of prospects until deal conversions. It also helps them to optimize their efforts in maximizing sales revenue and improve their sales efficiency.

Sales managers use pipeline management to identify high priority opportunities and help their sales teams to mitigate any risks in their sales process. They can closely monitor the deal progress and proactively remove all the potential bottlenecks.

A robust pipeline management in sales ensures accurate sales forecasting to run a predictable business. It helps leaders to make data-driven decisions, set realistic targets, and closely monitor sales performance of their sales team members.

Let’s look at the key benefits of having effective pipeline management.

Benefits of having an effective pipeline management in sales

Accurate sales forecasting for better predictability

A robust pipeline management process in sales provides real-time visibility of all the deals and their status in your sales funnel. This allows your sales teams to forecast expected revenue and sales performance quite precisely. Accurate sales forecasting helps you to identify risks in your business and take informed decisions to mitigate them proactively. Improved sales forecasting will help you with effective business execution, increased conversion rate, efficient resource allocations, and reduce operational costs significantly.

Improve sales effectiveness

Effective pipeline management in sales involves multiple deal stages. As a result, your sales team members can accurately manage the stages of all the deals and analyze them well. This leads to better client engagements to progress their deals faster, thereby helping them to shorten the sales cycles and improve overall sales effectiveness.

Better deal prioritization

A clear visibility of the sales pipeline and deal stages enables sales team members to prioritize their opportunities better. It will allow them to optimize their sales efforts on the high-priority deals that are more likely to convert. This helps in increasing overall deal conversion rate and sales productivity. Focused efforts on the rights deals will also help them to increase the deal size and generate higher sales revenues.

Effective performance management & sales reviews

A robust pipeline management process will provide real-time visibility to management on how the deals are progressing and how your sales team members are performing. With the right information, your sales reviews will be more effective and action-oriented. You can accurately identify the gap between sales target v/s actual performance v/s total sales pipeline. You will be able to coach your sales reps better and provide them with useful guidance to improve their sales performance and chances of meeting their sales targets.

Sales compliance

It is important that your sales team members comply with certain company sales policies. A robust pipeline management in sales goes a long way in making sure all sales team members adhere to a specific sales process. This will help you drive better sales efficiencies and sales compliance required to run a well-oiled sales machine. It will also help you make your business more process-dependent rather than person-dependent.

Optimize sales & marketing costs

Streamlined pipeline management will help you identify which prospects are most likely to get converted to paying customers. Your team members will be able to invest sales and marketing efforts on these right sets of prospects, instead of spending their time and budgets on the wrong ones. By analyzing the flow of prospects, sales team members can address bottlenecks at an early stage and reduce the overall customer acquisition cost (CAC). Close monitoring of the sales pipeline will help your marketing team to identify marketing campaigns that are most effective. This will allow them to double-down on these and not exhaust their marketing funds on the wrong channels.

Improved data-driven decision making

Pipeline management provides insights based on real time data, enabling sales teams to take data driven decisions instead of on intuition. This results in more accurate projections, better outcomes and strategic planning. Using this data businesses can identify trends, patterns and make proactive choices on sales strategies, resource allocation etc.

Streamlined & efficient workflows

A clear visual representation of the entire sales pipeline with efficient workflows enables sales reps and other key personnel to understand prospects buying journey better. This will allow them to focus their efforts on the most essential tasks rather than getting overwhelmed by the not-so-important activities. Streamlined workflows facilitate easy and effective collaboration among your client-facing teams and backend operations.. A shared view of the pipeline enables better coordination, improved planning, and efficient sales order management.

Timely management interventions to mitigate bottlenecks

Real-time visibility into your stage of the pipeline will help you identify potential bottlenecks in your sales process early on. This will enable you to guide your sales team members better and  take proactive steps to remove or minimize these bottlenecks. These timely interventions will help you improve overall business performance, sales efficiencies, and team productivity.

Best practices in pipeline management

Define your goals and objectives

This is the fundamental step to be followed in pipeline management. It sets the direction for the entire workflow. A well set objectives and goals gives a clear understanding to the team members and stakeholders about what needs to be done and why it matters. These would serve as a guiding principle enabling them to prioritize tasks and allocate resources. Well defined objectives ensure that all are on the same page.

Nurture your leads

According to Forrester Research, companies that excel in lead nurturing generate 50% more sales. Lead nurturing ensures that your sales team follows up with the right leads. Effective lead qualification is like sorting the gems from the pebbles. Therefore it is important to use lead qualification techniques like the BANT framework that considers parameters like Budget, Authority, Need, and TImeline.  This helps to identify the right prospects. It ensures that your sales team efforts are optimized and spent on the right leads.

Consistent Follow-Up

Consistent follow-up is crucial in any sales process.  Only 2% of leads generally get converted into paying customers.  This means that you could lose the balance of 98% of potential customers if you don’t follow up. It is important that the sales reps follow-up with leads till they convert to customers. But in reality, sales reps give up after 3 calls.

One way to streamline the process is use a CRM to set regular reminders. Using HappSales, you can create activities for follow-up and set reminders. That way you can follow up consistently without any opportunities getting missed. This will greatly help you in increasing your deal conversion rate.

Regularly updating opportunities

It is important that all data pertaining to ongoing opportunities are always up-to-date. This is one of the fundamental principles in the pipeline management process.  It is necessary to update data diligently and maintain accuracy. This enhances the efficiency of the entire sales pipeline management. Updated information gives you access to real-time data and a better understanding of the health of your pipeline.  Non-updation can lead to missed opportunities, miscommunication and an ultimate decline in overall sales productivity.

Analyzing sales metrics consistently

Sales metrics like number of deals in the pipeline, average deal value, conversion rate, sales cycle, sales velocity, rolling 4 quarters pipeline, etc. give valuable insights into sales performance.  It is important to analyze these metrics meticulously to identify areas of improvement. This will help you mitigate risks early and take corrective steps to ensure predictable sales performance.

Sales automation tools

It is important to leverage sales automation tools like CRMs that have become a game-changing strategy for companies.  A CRM software like HappSales will help you automate all manual and cumbersome tasks. This helps you to focus on much more productive activities that will generate more revenue consistently.  Sales automation tools provide you with insightful data on performance of your pipeline and the status of your deals. It can help you improve metrics such as sales velocity, win rate, deal size, sales cycle, etc. Your sales team’s effectiveness and productivity can be greatly increased with the use of sales tools like a mobile CRM app with digital assistant.

Defining a standard sales process

A clear definition of the sales process can have a huge impact on your sales cycle and conversion rates.  Your sales reps should be able to make the next move at every sales stage without any doubts. At the same time changes are constant. Therefore it is important to review and update your sales process regularly to match with ever-changing market trends, client demands and expectations. Review your current process to discover areas of improvement and try to take required  measures.

Conclusion

In summary, you can derive immense benefits from a robust pipeline management. The most important one being its ability to help you run a highly predictable business. At the same time, you gain valuable insights from the way a deal progresses through the sales pipeline. A very structured pipeline management improves collaboration and communication among your frontline sales team members as well as other colleagues in non-sales roles. It brings in a lot of accountability across the board.

Leveraging the best practices mentioned above will help you maintain a healthy sales pipeline. Your sales process will be more structured leading to faster deal closures. Overall, a well designed strategic pipeline management in sales can make the difference in running a predictable sales machine for achieving higher revenue.

Author Bio
Author Name: Deepa Arul
Deepa leads Marketing Operations at HappSales. She comes with over a decade of vast experience in sales and marketing operations.

She is obsessed with customer success, and loves writing blogs on sales & marketing topics. During her free time, you can find her mastering the French language. She actively contributes to the society by recording audiobooks to the visually challenged and teaching English to the underprivileged children, in addition to her favorite pastimes of reading and traveling.