Sales Pipeline Stages Every Business Needs To Know About
Did you know that 82% of businesses fail due to a lack of consistent cash flow? Are you concerned that your sales aren't where they should be? If so, then you need an optimized sales pipeline.
Don't worry if you don't know what a sales pipeline is or how to build one because the ins and outs will be detailed below. Keep reading to learn everything you need to know about sales pipeline stages and how to optimize them for increased sales and conversions.
What Is a Sales Pipeline?
At its core, a sales pipeline is a tool your marketing and sales team can use to work together and improve your sales operation. If your sales aren't what you want them to be, consider improving your sales pipeline to increase your bottom line and grow your business.
The sales pipeline helps your team visualize the sales process. It can show where the bottlenecks are and where you're losing sales, so you can fix them. An optimized sales pipeline can not only help you hit your sales targets but also offers valuable insights on where you can improve.
6 Simple Sales Pipeline Stages
There are six stages to the sales pipeline and each prospective customer or client must pass through these stage before progressing on to the next. In some industries, you might be able to move prospects through each stage quickly, possibly even in one meeting.
However, for most industries, you'll need to build a lasting relationship with each new future client. And if you're not tracking the process you could be losing out on many potential sales. Especially if your team isn't sure what information to send or how to help move them along the pipeline.
1. Generate New Leads
In the beginning, your marketing focus should include bringing in new leads. Without new leads, your business won't grow at the level you've come to expect. And, through digital marketing and online networking, you can create a system that generates new leads automatically every day.
Your first step in generating new leads is to determine who your ideal prospects are and what you help them with. If you're in the automotive industry and you manufacture and sell car parts to retailers, then your ideal customer might be small to medium-sized auto retail store owners who sell at least $25 million annually and have 10-40 employees.
If you work with local business owners and deliver office supplies, then you might structure your ideal profile based on geography rather than industry. But regardless, you need to know who your target audience is so you can begin to focus your lead generation strategy.
2. Contact and Connect With New Leads
Once you've brought in new leads that fit your ideal customer profile, the next job for your sales team is to reach out to them. You can do this through cold emails or connecting on social media such as LinkedIn. The goal at this stage is to focus on one-on-one meetings so you can nurture your leads.
This is your initial contact with each new lead, and you need to have your elevator pitch perfected for this stage in the sales pipeline. You must be able to clearly and succinctly explain to your new lead what you do and how you can help them. When you do this right, you'll see much better success when prospecting with future clients.
3. Qualify Each Lead
As you begin to reach out to and connect with your leads, your team needs to have a system in place for qualifying each prospective client. How well do they fit your ideal customer profile? How likely are they to need your services or product in the coming month or quarter?
You must have a way to track this stage. And your system should be available to everyone on your team. If your new lead reaches out to your organization, whomever they connect with must be able to see how warm or qualified this lead is.
4. Build a Relationship
Over time, as you progress through the sales pipeline, more and more leads will fall out of the funnel. This is ideal so that your sales team can begin to focus their time and energy on qualified leads.
You can begin to build a relationship with each new prospect by scheduling personal meetings with them to demonstrate your product. Or, if you offer a service you can offer an hour-long discovery call where you outline what your recommendations are for each prospective customer and show them how you can help them.
When you schedule a sales call with a warm prospect who understands your service or product and how it can help them, you'll see higher conversion rates over time.
5. Submit Proposal and Close
This is the stage many salespeople think of when they think of the sale process. And when you create an optimized pipeline, you'll see an increase in conversion rates.
Your goal at this stage is to walk away with a clear answer. Either your prospect needs and wants your product or service, or they're not in a position to purchase from you right now. If they determine that they don't need what you offer now but might in the future, you can keep them on your email list and continue to nurture that relationship.
Ideally, they will accept your proposal and you'll close the deal. However, your pipeline isn't complete at closing sales, there is still one more phase that is vitally important.
6. Post-Purchase Retention
Unfortunately, too many sales teams lose contact with prospects in the previous phase. Either the prospect declines the proposal and the team never follows up with them. Or, someone closes the deal and, again, no one follows up with them.
It's vital that you remember that the pipeline process isn't done after you close the sale. You need to focus on post-purchase retention as much if not more than the previous stages in the cycle.
After all, it's easier to work with a previous client than to always worry about finding new leads. Continue to nurture a relationship with customers long after the purchase so you can continue to sell to them for years to come.
Additionally, it's important to ask for referrals or testimonials from previous clients. Once you've optimized your pipeline, you'll gain leads via word-of-mouth. This will offer you warm leads that already trust you thanks to the recommendation of your previous client.
Navigate the Sales Process With a Pipeline
As you can see the sales pipeline stages aren't difficult to master. However, without a clear plan, your sales team will likely fall victim to missed opportunities.
If you're ready to see how you can optimize your sales pipeline and leverage LinkedIn to grow your business, then schedule your free 15-minute consultation call here.