What is a pipeline?
Something to pump stuff through? To put under roads? To send oil off shore?
In those settings, who knows, and who cares. But when talking about a sales pipeline there's a lot I can share. I've noticed with some recent engagements over the past couple of weeks, there seems to be a little confusion on what exactly a sales pipeline is. Well here is Boiler's definition:
A Sales Funnel Report presents a 'snapshot' of your sales function at any given point in time. For conceptual purposes, the sales process is often compared to a funnel, where new leads coming into the system (i.e. prospects) are placed into the top of the funnel - the widest part. Then, they are worked through the funnel by informing, persuading, overcoming objections, providing information, demonstrating, providing free samples, etc., etc. until, at the narrow part of the funnel, an order is placed, and a sales is closed, when payment from the customer is received.
The funnel framework works fairly well because for all new leads that are generated by our marketing efforts, there is a closing rate that represents the sales that ultimately result. The number of resulting sales is usually significantly less than the number of total leads generated. Therefore, it is useful to think that as leads work their way further down the funnel, there will be less and less of them coming out the of narrow end as sales.
One important thing to note is that organizations define each phase in the sales process (or part of the funnel) differently based on their authentic sales process. It is also interesting to note that the pre-defined ‘sales steps’ in an off-the-shelf whiz-bang CRM system don't allow for this kind of customization. Working through the funnel each step should have clearly defined criteria so there is specific knowledge about all leads at every particular stage (questions and rules need to be developed for each step). In other words, leads become more and more qualified as they work their way through the funnel, and you should be able to articulate exactly what's required at each specific level of qualification.
Another important thing to keep in mind is that the funnel is a great way to track and forecast sales (hear that leaders, a real forecast, wouldn't that be nice?), as well as, gauge marketing activities. We at Banjar believe there is one step that should be in all funnels and that is the stage of OPEN prospect. When does someone move from being just a prospect to being an open prospect? Open to a sales process with us that is real. When are they open to this really?
By running a Sales Funnel Report, the sales manager can see how many leads are at each step, if there are any 'bottlenecks', or if there are an insufficient number of leads at any stage. It allows the sales manager to check the sales effectiveness of the team. Armed with that knowledge, the sales manager may instruct his or her sales force where to focus more attention to keep sales at the desired level (that’s called coaching). He or she can then also work closely with the marketing manager to ensure they are generating enough leads to hit sales goals, whether the leads are of high enough quality, or what further needs to be done to hit sales goals.
If you do not have an active sales pipeline that reflects your actual sales process ask yourself why? Too accountable for sales? You don't know how to do it? My favourite, "We are still putting in a CRM system".
Would you drive your car with no dashboard? So don't drive your sales the same way, blind!
