Demystifying The Sales Process: The Sales Pipeline

IMG_2329In my previous post, I sketched in the basic steps that make up the sales process. Turning those steps into a repeatable process that can scale with your business needs isn’t as complicated as you might think. It’s a linear, straightforward system, often fittingly called a sales pipeline.

Much like the sales process itself, a sales pipeline is best looked at as a series of individual stages, each with a specific purpose. You can also think of it as a series of filters, each of which is designed to ensure that only the best-fitting prospects make it to the next stage. To accomplish this, each stage is defined by a series of rules and criteria. These rules define what a legitimate sales opportunity looks like.

When a sales pipeline is missing or implemented but designed poorly, the sales process feels subjective. Instead of using an established set of rules to define a legitimate sales opportunity, this assessment is left to the individual salesperson. This means that two different salespeople can look at the exact same opportunity and have completely different takes on not only where it is in the pipeline, but also if it’s a good fit to be a customer in the first place.

It’s never a good thing for the success or failure of your business to rely solely on an opinion rather than on hard data. By establishing a clear set of criteria at each stage of the pipeline, you can sidestep this problem completely.

A well-designed sales process can go beyond simply determining the prospect’s business needs or ability to purchase. For instance, by tracking how long prospects take to move from one segment of the pipeline to the next, it’s possible to establish average time values. This allows the sales rep and managers to have a rough idea how long each step will take, and to have a great tool for identifying a problem if the prospect takes too long to move forward.

Another useful tool is sales probabilities. These indicate the percentage of customers at each stage in the process who go on to complete the sale. The further down the pipeline each prospect advances, the higher that percentage becomes that the end result will be a signed check.

The more complete this your sales process is, the better your ability to consistently predict your sales performance. The more data you have about your sales process, the easier it is to make informed decisions and adapt the process to become more efficient and profitable.

In part three, I’ll be talking about what this process looks like in the real world. It’s time to have your first appointment with a qualified prospect.