Sales Pipeline & Weighted Pipeline
- Scientific sales funnel management for predictable revenue
Introduction
Sales pipeline management is also referred to as sales funnel management. It is a process to measure and manage the health of your sales pipeline. You can analyze the sales opportunities, track how quickly the deals move through your sales pipeline stages, monitor the conversion rates, and make data-driven decisions. It is also an integral component of your overall sales process.
Understanding each part of the deals in your pipeline is crucial for optimizing your sales strategy and forecasting future revenue accurately.
As per HBR report, companies with a structured sales pipeline management reported 28% higher growth in their sales revenue.
01
Important Sales Pipeline Stages
Sales pipeline stages are the steps one follows to win an opportunity.
While there are many versions of sales pipeline stages, we suggest you to keep it simple and align it with the customer’s buying process.
Renowned sales consultants Neil Rackham and Mike Bosworth break it into four broad stages – (i) identification of a need (ii) analysis of needs (iii) evaluation of possible solutions to address the need, and (iv) buying or implementing the solution to address the need.
Based on the above, here are the important stages we recommend –
02
Prospecting & Lead Generation
Prospecting is the first step involved in a sales process. It involves generating new leads by your lead generation team. Leads for any product or service are usually generated using targeted marketing campaigns, social media, and webinars. A good customer relationship management (CRM) software plays a crucial role in organizing and managing these leads.
03
Marketing Qualified Lead
Once leads are generated, the next critical step is to qualify these leads. Lead qualification involves analyzing whether there is a proper fit using methodologies like BANT. BANT is the acronym for Budget, Authority, Need, and Timeline. This crucial step within your sales process plays an important role in separating the hot leads from the cold leads. The sales reps can therefore focus their efforts on leads who are most likely to convert into customers in the near future.
04
Sales Qualification
Once the qualified leads are passed on to your sales team, they begin to engage with the customer. This can be through a well-written script that can be used by the sales rep to start the engagement process. They can then do a detailed discovery with the prospect and further qualify the lead. This stage of the sales pipeline is where a “marketing qualified lead” becomes a “sales qualified lead”.
05
Evaluation
This is where the clients begin to evaluate your product and compare it with other competitors. You will have to do demos, and give trials or samples to make clients understand how your offerings can address their specific pain points. You might also submit a techno-commercial proposal at this stage.
06
Negotiation
This stage of the sales pipeline involves answering additional queries and getting into the commercial discussions, It sometimes involves expansion or bringing down the scope of work. You might have to offer discounts or bundle additional services at this important stage of the sales process.
07
Closure
This is the final stage where you win the deal, or lose it to competition or the client might discontinue it temporarily. It is important that you capture these outcomes in your customer relationship management (CRM) software. HappSales B2B CRM app offers you a drop-down menu to easily capture this outcome. It also allows you to make specific notes in your CRM regarding the key points that contributed to closing the deal or losing the deal. These notes serve as a good reference for your sales reps in the future, helping them to understand which strategies worked well and what areas need further improvement.
Problems we solve
HappSales CRM offers the most comprehensive and powerful set of capabilities to help you accurately measure and improve your sales pipeline. It lays the foundation for you to run a highly predictable business.
Measures Most Essential Parameters
- No. of deals or opportunities in the pipeline
- Deal value
- Deal closure probability or confidence level
- Opportunity Stage
- Sales cycle or days taken for deal closure
- Total sales pipeline vs weighted pipeline
- Rolling 4-quarters pipeline
- Sales velocity management
Sales pipeline and weighted pipeline are leading indicators in sales.
Compares Total Sales Pipeline v/s Weighted Pipeline
Total sales pipeline, as the name suggests, is the total value of all the deals in your sales pipeline during a specific period of time.
Measuring total sales pipeline may not be an efficient way to look at the health of your sales funnel as it does not consider the closure probability of the deals. This is why companies also prefer to measure the weighted sales pipeline.
Weighted sales pipeline is the weighted average of all the deals in your pipeline. It is calculated by considering the closure probability or the likelihood of a deal to close during that period.
Here is an illustration that depicts the difference between the two. You can see in the below table that the total sales pipeline is 1300K for 10 deals in your funnel. However, after considering the respective closure probabilities, the weighted average of the pipeline is now 800K. This weighted average, or the weighted sales pipeline value, is a more realistic depiction of the health of your funnel.
Using this analysis, you can now have a more accurate sales forecast required to run a predictable business. You can compare this with the verbal sales forecast provided by your sales team members for a better assessment.
Depicts Rolling 4-Quarters Pipeline
HappSales CRM automatically calculates the rolling 4-quarters pipeline. It depicts your sales pipeline for four consecutive quarters starting from the current quarter (CQ). Along with the current quarter’s sales pipeline, it will also show you the pipeline for subsequent three quarters – CQ+1, CQ+2 and CQ+3. Having a clear view of deals in your pipeline allows you to manage them effectively.
It is one of the most powerful leading indicators in sales.
It is effective when you measure this metric consistently and then take the right decisions to bridge the gap.
Benefits of using HappSales
Better sales forecasting
With HappSales CRM, you can improve your sales forecasting. It is the cornerstone of running a predictable business. A clear visibility into the sales pipeline and weighted pipeline will help you achieve this objective. You can forecast your deal closures with better accuracy and accordingly adjust your business plans.
Measuring right metrics for better sales performance
It is critical for companies to measure the right sales parameters listed above. This makes sure that you do not dilute your team’s attention and they will be able to channelize all efforts to meet the most-important objectives. As a result, you will witness a significant boost in sales performance.
Informed data-driven decisions
You will now be able to make effective business decisions based on accurate and reliable information. Your team will not rely on intuition. With all the right data available to them, your sales team can take proactive steps to mitigate risks for better outcomes.
Consistent lead generation and pipeline building
Powerful dashboards like the rolling 4-quarters pipeline will help you predict your sales performance in the coming quarters. You will be able to accurately measure the pipeline gap, identify trends, and plan your campaigns better. Consistent lead generation to bridge this gap will improve the health of your overall pipeline.
Effective performance reviews
With the HappSales CRM performance review section, you will be able to analyze the sales pipeline performance of all your sales team members. You will get to assess which of your team members are doing the right things to build their pipeline. For the rest, you can guide them to bridge the gap and help them achieve their targets.
Resource optimization
Having a clear understanding of the sales pipeline will help you make the right decisions to optimize your resources. You can allocate the right resources and budgets to build pipeline based on geography, product-line, sales team, etc. This will help you maximize the return on your marketing investments, drive revenue, and improve profitability.
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