The Sales Pipeline

As mentioned in the previous section, your sales pipeline is one of the most important aspects of monitoring the performance of your business.

Your sales pipeline can help you track and forecast several weeks and months ahead.  This vital data can help drive important sales and marketing decisions such as when and where to spend resources, and when to hold back from spending.

One of the first tasks in setting up your new CRM is to define what your Sales Pipeline looks like.  As you approach this task you will need to think about what stages your buyers go through before they become customers.

As you begin to use and manage your sales pipeline properly, you will identify weak areas of your sales process.  These weak areas will be identified by large 'drop off rates' for particular stages of your sales pipeline.  These can be improved upon through either refining current processes and techniques or through remarketing.

A normal strong sales pipeline may look something like this

Stage

Number of Prospects

% Drop-off

1

Inbound Lead

20

 

2

Respond to 1st Email

18

10%

3

Product Demonstration Booking

12

33%

4

Asked For Quote

8

33%

5

Deal Won

4

50%

In the example above 20% of all inbound leads are converted into sales, from 20 to 4.  The percentage drop off rate at each stage looks fairly steady and the company looks like its sales process is optimised quite well.  Now consider the table below. 

Stage

Number of Prospects

% Drop-off

1

Inbound Lead

20

 

2

Respond to 1st Email

18

10%

3

Product Demonstration Booking

6

66%

4

Asked For Quote

5

16%

5

Deal Won

4

20%

In this example, the company is still converting 20% of all inbound leads into sales, but there is a 66% drop-off rate from the prospect responding to a first email sent by the company to booking in for a product demonstration.  This data has identified an area of weakness within the sales process that can be improved upon.

The large drop-off rate from Stage 2 to 3 suggests that the email the company is sending prior to booking in a prospect for a product demonstration needs reviewing and changing.  By doing so, their overall sales could be vastly improved to look something like this:

Stage

Number of Prospects

% Drop-off

1

Inbound Lead

20

 

2

Respond to 1st Email

18

10%

3

Product Demonstration Booking

12

33%

4

Asked For Quote

10

16%

5

Deal Won

8

20%

By improving the area of weakness within the sales process as identified by the CRM, the company has managed to double it's sales, and double its turnover.  The percentage conversion from Stage 3 to 4, and  4 to 5 remain the same, but by improving the conversion rate of people who receive an email and then go on to book a product demonstration the company have doubled their sales.  This change may have been something as simple as listing the benefits of their service in the email instead of listing the features. 

You can see then that being able to monitor, track, and analyse a well constructed Sales Pipeline is vital to refining your sales process, and even a small change in the right place can make a big difference in your revenue.

By defining a long-term sales pipeline strategy that runs in conjunction with your email marketing and email automation strategy you will soon begin to see an increase in revenue.


Do you want more sales and new customers?