According to polling done by the TAS Group, only 46% of sales representatives think they have an accurate pipeline. Despite this fundamental flaw, companies spend an average of two and a half hours per week creating forecasts based on these pipelines, per Leslie Ye of HubSpot.
It doesn't have to be this way. Vantage Point Performance and the Sales Management Association reported that companies with effective sales pipeline management had 15% faster revenue growth than those with ineffective management. “Sales pipeline management is incredibly important,” says Ye, “because the pipeline directly impacts the company’s bottom line. Without proper maintenance, it’s near impossible for managers to tell whether the pipeline will help elevate business this quarter or leave it in the red.”
What is Sales Pipeline Management?
The sales pipeline is a visual representation of business opportunities and the linear process by which they evolve from a prospect to a completed sale. The sales pipeline consists of sales prospecting, lead generation, sales calls, outbound emails and meetings — all of which proceed through the funnel and into the pipeline. Sales pipeline management, as explained by Vantive Media CEO Chuck Schaeffer, “is the organization and tracking of prospects, goals, and quota – as well as understanding whether certain deals need special attention.” Schaffer continues by saying that effective pipeline management “allows salespeople to keep track of deals by knowing exactly which stage the deal is in, and whether there are enough deals on the board to hit goals and quota.”
Schaeffer stands by three sales pipeline management practices proven to grow revenue. They are:
- Design: Consolidate the top-of-the-funnel (awareness-stage),middle-of-the-funnel (consideration-stage), and the bottom-of-the-funnel (decision-stage). One integrated revenue funnel can function far more efficiently when properly integrated and reduce miscommunications and redundancies across departments.
- Operation: Implement a lead scoring model to reduce lead leakage and recycle leads. According to Sirius Decisions, 80% of leads generated by marketing are ignored by sales. Furthermore, many marketers ultimately pass on unqualified leads to their sales teams. A proper lead recycling process is needed to return leads that have stalled until they revert to an active state as determined by their lead score.
- Maintenance: Review and remove any sales opportunity that has been in the pipeline for longer than twice the average sales cycle. Rather than abandon them, simply remove them from the pipeline. Avoid overstating your revenue projections.
Managing the pipeline allows for better pipeline health in all aspects, including inflow, outflow, movement, stagnation, and velocity. Having a proper pipeline will also assist with accurate lead scoring and recycling — vital parts of the sales process. When sales and marketing collectively identify the prospects, marketing is then in a position to pass on only sales-ready leads. When sales and marketing share common objectives, the sales and marketing departments evolve from isolated silos into one integrated business function.
Merging the marketing and sales funnels into one revenue funnel is instrumental for achieving this success. “It’s important to recognize,” says Schaeffer, “that demographics only share the company’s interest in the prospect, while behavioral activities share how interested the prospect is in the company.” These days, behavioral activities can be captured by marketing automation systems. These systems include prospect actions such as the amount of time spent on the company’s website or the types of content consumed.
Sales pipeline management these days requires not only thoughtful design, meticulous operation and maintenance, but also the implementation of proven technology that can prioritize and present vast amounts of data — more than a human or team of humans ever could — with precision and speed. Learn more about how ConnectLeader can help you revitalize your sales pipeline.