How’s Your Sales Pipeline Flowing?
“The goal is to turn data into information and information into insight."
Carly Fiorina - former chief executive officer, Hewlett Packard.
In working with business owners, how to generate new business is nearly always a part of our conversation. And, when we talk about generating new business, the conversation includes looking at their sales pipeline.
What is a sales pipeline?
Fundamentally, the sales pipeline is a summary of the potential business coming into the company.
When our pipeline if full and flowing well, we tend to experience a sense of ease in the sales process. When there is plenty of potential business available, the focus is likely to be on creating the best customer experience. On the other hand, when our pipeline is an inadequate trickle, each meeting with a prospect takes on exaggerated importance which often feels like pressure - for both the salesperson and the potential customer.
When you think about your sales pipeline, is it flowing like a well-maintained fire hose? Or is it more of a trickle?
What can your pipeline do for your business?
Monitoring the sales pipeline helps you figure out important numbers like your closing ratio, the length of your sales cycle, expected revenue, the number of prospects the business needs to meet objectives, hiccups in the sales process, and more.
- Only a certain percentage of your new connections will turn into business. Knowing this ratio helps you determine how many qualified prospects you need to connect with to meet your sales goals.
The length of your sales cycle
- Monitoring your pipeline helps you understand how long it typically takes to move prospects from first contact to becoming a customer.
- When you know how many qualified prospects are in your pipeline, your closing ratio, the length of your sales cycle and the value of your average sale, you can reasonably predict what your revenue will be.
- With the above information, you can figure out how many qualified prospects you need to have in your pipeline at any given time to meet your revenue goals.
Hiccups in the sales process
- Is there a step in the sales process where you tend to lose sales? Looking at these results can help you decide if there are presentation skills you need to develop, if your offerings are right for your target market, etc. so you can course-correct, if needed.
Business owners that leverage their sales pipeline can develop a data-driven understanding of their current and future sales performance. Knowing this information can help you make better decisions about hiring, training needs, increasing or cutting your advertising budget, etc. This leads to more effective use of resources and greater success over time.
Wishing you a smooth flowing pipeline that supports you in achieving your goals.
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