It is a salesperson’s job to guide the consumers through the sales process of learning about the brand’s products and thereafter ultimately make them purchase it.
Now a sales pipeline is simply a rep’s tool for organizing and managing this consumer journey and for this easy to use CRM is the secret weapon that helps them perform their job.Effective sales organizations are 81% more likely to be practicing consistent usage of a CRM or other system of record - Aberdeen Group Click To Tweet
Hence in this post, we will take a deeper into what is sales pipeline and sales funnel by clearing some of the mostly found confusions around these buzzwords by explaining the subtle difference between these two, along with how to track and manage a sales pipeline with a CRM.
For any layman to understand, a sales pipeline is a simple representation of exactly where the prospects are in their buyer’s journey. It consists of five stages which signify the buyer’s journey from a sales rep’s perspective.
Typically you can manage a sales pipeline using a CRM like Salesforce or even any other Salesforce Alternative CRM platforms which can help organize any sales rep their leads and guide them through the journey to become a customer.
The sales pipeline consists of five stages which include:
1. Prospecting: This is the stage where you identify and enter the prospects into the pipeline.
2. Qualifying: In this stage, you set up a meeting or a demo to present your brand’s offerings. Over here your home in the value of your offering and explain how it meets the customer’s needs.
3. Quote: In this stage you discuss the terms and prices with your prospect, explaining to them what features the potential customer is getting fir that price. Additionally, in this stage as a sales rep, you can determine whether the lead is really willing to buy your products and/or services.
4. Closure: This is the time when you need to seal the deal. For this put everything that you have discussed with your prospect in writing and send them the final terms or proposal. You can even offer a discount or a tailored membership at this stage.
5. Won/Lost: This stage shows whether the prospect has eventually brought or rejected your offering. If they did buy, that makes good on your promises. However, if they do not then try to find out why and determine what worked and what did not work in your sales pipeline.
Therefore think of a sales pipeline as a pipe through which you move the prospects and get them to the end of the pipeline and convert them ultimately into customers.
Would you agree that a pipeline and a funnel look the same? Hopefully, your answer to this question would be – No.
Nevertheless “sales pipeline” and “sales funnel” are terms that are often confused.
Now the basic difference between these two is that while a “sales pipeline” depicts the sales process from a salesperson’s perspective, a “sales funnel” illustrates the same process from the buyer’s perspective.
Set like an upside-down pyramid, a sales funnel help to identify and breakdown the key steps in a buyer’s journey and helps to better understand where customers have taken actions and where the opportunities lie for engaging with leads during each of the five stages in the funnel that include:
1. Awareness: In this step, the consumer finds a new product, whereby sales reps can help drive awareness for their offerings with tactics like email outreach, cold calling, or by offering a free trial of their offerings.
2. Interest: In this step, the lead shows real concern and interest in your offer. For the sales reps, this is the right opportunity to nurture these prospective leads by educating and letting them know more about their brand’s offerings. The reps can use case studies, email drip sequences, and testimonial over here which are all excellent means foe building the prospective lead’s trust and appreciation for their brand.
3. Evaluation: This step in the funnel suggests that the lead is further interested to know more about your offering. Hence the sales reps now can find an opportunity to fill in the prospect’s knowledge gap and show the lead that their solution can solve the unique pain-points of the prospective customer.
4. Engagement: This is the second last stage in the funnel when the lead has entered the final decision-making stage in their buyer’s journey. At this point, the sales reps can continue to support the prospective lead and keep them engaged, which helps the leads to travel the last few yards of the sales funnel and finalize the deal.
5. Purchase: This stage in the funnel illustrates that their lead has completed the purchase and has become a customer. Over here it is most necessary that the sales reps must continue to build the relationship after the close to identify opportunities for upselling and improve customer-retention rate for their company.
So you see the sales funnel is a tool that helps reps visualize the buying journey from the perspective of the consumers. But nevertheless, to actively drive that experience, and to make the prospect buy from your brand, means managing the customer’s journey from a sales rep’s perspective with a sales pipeline tool.
Now if you want to increase the success rate of your sales, you need to optimize your sales pipeline, and that implies tracking important metrics with your business growth tool like an easy to use CRM to identify the various stages at which leads are usually getting lost and find why or who are the sales reps in your team that is driving the most conversions.
Hence let us take a look at how to do this.
Monitoring the following metrics using a business growth tool like an easy to use CRM not only helps to identify bottlenecks in the sales process but it even aids in gaining insights about how businesses can improve the overall health and efficiency of their sales pipeline.
Businesses need to track this metric in their CRM to ensure that their sales teams are generating enough qualified leads that they need to enter for the Prospecting stage in the pipeline to meet their revenue goals.
This metric in the CRM can easily illustrate how many MQL (Marketing Qualified Leads) are becoming SQL (Sales Qualified Leads) at the prospecting stage.
Now if you find that there is a big gap between these two numbers, you need to better align sales with your marketing team, since the effectiveness of marketing-generated leads can be easily tracked by the progress of those leads through the sales pipeline.
This metric in the CRM denotes how long it typically takes to close a deal for your company. Therefore, if you find there are deals that are getting stagnated in your sales pipeline for longer than you average sales cycle, try to enquire why and find out how and what you can improve to shorten the process.
It is natural that you will not be able to close every deal in the pipeline. However, you can learn from the lost ones.
Therefore track the deal-lost reasons by customizing your CRM metrics on typical trends like “customer did not have the budget” or “poor follow-up” which are valuable insights to improve the effectiveness and efficiency of your pipeline as well as help to evaluate the sales rep’s performance in your company.
Easy to use CRM not only makes tracking the stages of the sales pipeline effortless, but it even provides a road map for your sales reps to follow when guiding leads through their buyer’s journey.
It is a tool that can automatically generate reports to help you find a high-level view of your sales pipeline, identify bottlenecks, find out where the leads are getting lost, and even identify new opportunities, providing information to improve your sales operations which ultimately can help drive more sales.