No one can perfectly predict the future. But luckily for sales teams, there are ways to estimate relatively accurate sales revenue. Enter sales forecasting.
Granted, sales forecasting can be intimidating, especially if you’re a new business just growing your sales department. However, it’s an essential process for your company.
An effective sales forecasting process allows you to track sales data, manage your sales pipeline, and improve your forecasting model over time. It helps you understand how many deals you need/expect to close, the status of each deal, and pinpoints any factors that might affect your company’s future growth. Most importantly, sales forecasting helps you predict future revenue and shows your managers what to expect for the coming quarter/year.
That’s why we’ve created this introductory sales forecast template — to help you easily get started with the sales forecasting process.
This template includes two columns: Actual sales results by month and Projected sales results by month. Place the number of all monthly deals in the “Actual” column (sales forecasting works off of past information). Based on this information, insert your projections for each month of the upcoming year. You can also update the graph so you have a visual of your sales projections.
Let’s say that you sold 1400 of your company’s service subscriptions in October 2018. October is a good month for your business as you participate at a major conference filled with potential customers. You estimate that you’ll grow 40-50% year-on-year (or roughly 2000 subscriptions). The number of deals (or subscriptions in this case) predict future revenue. You can use different sales forecasting techniques to make these projections.
Also, customize the template as needed to match your company’s needs. If your sales department works on the quarterly system, change from monthly to quarterly.
Use your projections to work backward and determine how many deals you need to close over the next period to reach the desired revenue. Answer questions like: How many leads do I already have in the pipeline? What is the value of each potential deal? How many more deals do I need to close? Where are my leads coming from?
If you discover at the end of each month (or quarter) that actual results didn’t align with your forecast, don’t be discouraged. Maybe your pipeline needs cleaning. Or maybe your sales reps need more coaching. Use it as an opportunity to improve your sales forecasting process.
This sales forecast template works for businesses with small sales operations; it’s not designed to provide the insights that larger companies need to grow.
A CRM is a better choice as your company scales. For example, with a CRM like Sell, sales reps can easily insert important sales data. Data is automatically organized and placed into a visual format such as these sales forecasting reports:
All salespeople know the destination of the sales process: converting a prospect into a customer. But going from stranger to customer isn’t always a straight shot. You may be tempted to take a shortcut along the way, or you may turn off the sales process road too soon.
Make sure your sales team isn’t taking unnecessary detours or damaging shortcuts by creating a road map they can follow. Mark important stops along the entire sales journey, from “This person is a stranger” to “This person is a customer.” The infographic below makes sure you’re headed in the right direction.
While the average Shark Tankviewer may watch the show for entertainment value, the hit ABC series also provides an education on how to successfully sell your product to high-profile prospects.
One particularly successful Shark Tank business that offers valuable sales lessons is Talbott Teas. In their 2012 appearance on the show, Shane Talbott and Steven Nakisher, founders of designer beverage company Talbott Teas, presented their product as a “cup of couture” and “steeped in style.” But it wasn’t just the elegant wording or 23 flavorful blends that caught the Sharks’ attention.
The Talbott Teas duo already had an amazing product and successful sales. The company’s sales had increased from $100,000 to over $500,000 over three years, with 50% profit margins. On the show, Talbott and Nakisher asked for $250,000 in return for 20% equity in their company.
With Nakisher providing the business details and Talbott emphasizing the creative aspect of the business, they eventually partnered with investor Kevin O’Leary, who invested $250,000 for 35% equity in the business. Granted, the equity was not what the duo originally asked for (and is a good lesson in improving negotiation skills). Nevertheless, the deal went on to be a success.
The sales pipeline is an integral part of the entire sales process. Consider it a visual tracker that provides valuable insights about the number and progress of your incoming and current deals while helping you identify gaps in your sales cycle and ways your reps can achieve their quotas.
Whether you’re a B2B or B2C organization, your sales pipeline requires customization of the stages to match your company’s sales process, analysis of the sales pipeline metrics, and use of the right tools to track and manage your customers and sales team.
Sales pipeline management
According to a study by Vantage Point Performance and the Sales Management Association, “44% of executives think their organization is ineffective at managing their sales pipeline.” Unfortunately for them, knowing how to build and manage a pipeline is essential to the success of both the sales department and the company as a whole.
Fortunately for you, an accurate estimate of deals you expect to close each quarter is possible with a well-managed pipeline. It ensures that you don’t miss any deal opportunities, and it shows if you need to close more deals. It also helps with accurate forecasting for the next quarter.
The stages within your pipeline are like stops along your sales process. Clearly defined sales stages help your sales reps know the exact steps to take to close a deal. Each of the sales stages (Prospecting, Qualified, Quote, Closure, and Won/Lost) requires maintenance and a customer-centric focus.
Most sales teams have the data needed to determine whether their sales pipeline is healthy or not, but they lack an analyzation strategy. Valuable data then goes to waste. Use specific sales pipeline metrics to determine how effective your sales process is at every stage of the pipeline, and then improve where necessary.
To maintain your pipeline, you need a robust CRM that automatically runs reports, tracks customer conversations, and organizes all of your customer data. CRM integrations with tools like those below ensure that you can see all lead and customer information:
Your sales pipeline is only as effective as the strategy you’ve developed for it, and it depends on all reps working together to fulfill that strategy. Know the exact number of deals you have, the value of each one, and the best way to close each deal with a healthy sales pipeline. Use it, too, to gain a clear picture of your sales reps’ performance and pinpoint skills they should improve. Increasing your company’s revenue depends on it.
After two months of conversations, demos, and meetings, you’ve just closed a large account for your company. The contract is signed and your new customer is excited about implementing your product/service. But now what? The new customer is happy for now and should be kept that way. It’s time to turn your customer over to account management.
What is account management? It’s a crucial extension of the sales process. Good account managers are able to pick up where sales left off and assist with customer retention and expansion. The focus of account management is nurturing customer relationships.
Definition of account management
Account management starts after the sales transaction is complete. It’s the daily management of customer accounts to make customers want to continue the relationship with your company.
Account managers must continually prove your company’s value to the customer so they’ll want to stick with your product/service. The role is particularly important for SaaS companies, as the customer cycle is longer. A customer signing up for your product/service is only the beginning — you need to stay top of mind so the customer will want to renew or even add onto their subscription.
A typical account manager has the following responsibilities:
Manage the customer long-term relationship
Find up-sell opportunities
Strategize to meet customer needs
Track account metrics
For example, let’s say you’re doing account management for a financial subscription company. You have an in-depth understanding about the needs of your customer based on your research and what was conveyed to you from sales. You answer any questions that the customer has about your product and offer ways to get the most out of your product (e.g., how they can use a specific feature to improve their accounting process).
You keep track of different metrics to determine the health of the account, as well as conversations to know if the customer is happy for your product. You listen to their needs and concerns. If you notice that your customer would benefit from another feature of your product (e.g. your customer’s business is growing), you might suggest an upgrade or an addition to their current plan.
A good account manager acts as both an advocate and trusted advisor for the customer.
Account management vs. sales management
These two types of customer management roles complement each other, but are not the same thing. While sales is more transaction-based, account management is more relationship-based. In account management, the sale has been made and now you need to convince the customer to stay with your business long-term.
Let’s take a look at how sales and account management are different.
Sales reps find new customers who are in need of your product/service and establish the initial relationship during the prospecting stage such as through social selling. They continue to develop this relationship up until the closing stage, having conversations via different channels. The ultimate goal is conversion.
Sales provides a brief to account managers with details about new customers. Account managers take this information and continue to nurture the relationship. They act as the daily contact for customers, finding out their needs and wants. They offer valuable resources such as case studies on current customers and advise on ways to improve their business (including through renewals and up-sells).
For larger businesses, account management and sales management are separate departments. But for SMBs, account management and sales management are typically combined. Sales reps act as account managers and vice versa.
If you’re an SMB with limited resources, make sure that your sales team has the skills and understanding to continue the customer relationship. Consider implementing relationship-focused tactics into your sales process (e.g., customer-centric lead generation strategies), so it’s easier for your sales reps to continue the customer relationship after the sale has been made.
Best account management practices
Especially if you’re a sales manager also acting as an account manager, you may need to transfer certain skills and/or add to your skill set to be successful. Strong communication skills, the ability to build trust, industry experience, and organization skills are all important for account managers.
To successfully complete the day-to-day responsibilities of an account manager, you need to be proactive with managing every account and build strong relationships. Customers are more likely to stay with a company they believe truly cares about and values their business.
Take advantage of your CRM. Not only is a CRM perfect for organizing customer information, but you can also use it to track customer conversations with sales, customer service, and account managers. Use your CRM to understand which accounts to prioritize, too, such as through reviewing deal value.
Do your research. In addition to getting account info from sales, review company information, news, blog articles, and info on your point of contact. What are their goals? What are their pain points? What do they need advice on? Check your customer’s social media accounts, such as LinkedIn, on a regular basis to view what’s important to them on a personal and professional level.
Recognize customer needs. Listen to what the customer says, but read between the lines on what they say they want and what they really need. Share resources that will help customers both use your product (e.g., case studies) and thrive in their industry (e.g., industry reports). Also look for up-sell opportunities, but don’t push an up-sell if it’s not going to add value to your customer’s life.
Communicate with sales. If in separate departments, sales and account managers need to communicate on a regular basis (especially when handing off new customers). What features or add-ons did the customer purchase? Did the customer mention anything at purchase that might affect their account later on (e.g., talks of an acquisition)? You’ll also need to coordinate with sales on up-sell or upgrade opportunities.
Pay attention to account metrics. Track how your relationship with each of your customers is progressing and be able to communicate results to high-level management. Retention rate, customer churn rate, customer satisfaction score, and support calls/emails are all important KPIs to track the health of customer relationships.
Unlike sales, which is short-term focused (e.g., closing the deal), an account manager needs to have a long-term mindset. In addition to the above practices, keep an eye out for external factors that could affect your account, such as competitor products.
The goal of account management is to both provide value and communicate that value to your customers. A quality product or service is essential, but a customer is more likely to stay with your company if they believe you have their best interests at heart.
Get started as an account manager
Although similar to sales, account management requires more customer nurturing skills to ensure that customers stay satisfied with your company. Adding continual value to the customer’s business is key to account management and successful continuation of the relationship that sales began.
Zendesk Sell is a CRM that can help improve your account management process. It ensures that no important account information falls through the cracks between the sales team and account management team. Give Sell a free trial today!
A B2B sales funnel doesn’t just capture new business. It’s also your key to nurturing existing customer relationships and learning where your sales process fails to address the pain points of leads.
By building a watertight sales funnel, you ensure that your conversion rates improve and that you’re adapting to the changing needs and wants of your customer base.
Despite a multitude of reasons to identify and develop your B2B sales funnel, 68% of companies do not track their buyer’s journey, leaving 79% of leads undeveloped and unconverted.
Create a sales funnel that addresses the modern needs of your customer base by following the five steps we’ve outlined below.
How to build the ideal B2B sales funnel
Chances are, your sales and marketing teams are familiar with the B2B sales funnel philosophy: identify and break down the key steps in a buyer’s journey to better understand where actions are taken and opportunities lie.
The classic five-stage B2B sales funnel model has been around since 1898. And while the main phases of this nearly 125-year-old approach are still relevant, the model is outdated overall. Why? Because the B2B customer base has changed.
Your customers today go through a complex and multi-tiered journey when deciding who their business should go to. Unlike generations before them, they can have thousands of results, reviews, and websites at their fingertips in seconds.
According to a Google study, 89% of B2B researchers use the internet to research their customers, and 81% of their customers use the web to scope out businesses in return. So why would you use a B2B sales funnel model that doesn’t address modern, digital business?
The answer is: You shouldn’t.
This is why Forrester issued several reports in 2010 bemoaning the classic model. It’s why CEB issued research in 2012 that showed that many prospects not only didn’t fit the traditional B2B sales model but actively fell through its gaps. As a result, new models have emerged:
Forrester’s models: a combination of peer reviews, competitive alternatives, recommendations from friends, and user-generated content that pushes leads through the discover, explore, engage, and buy stages
McKinsey loyalty loop: the consumer considers brands, narrows down options, selects a brand, and then uses that experience to make future buying decisions
Heinz model: community, awareness, consideration, action, value realized, loyalty, evangelism
Marketing made simple: pre-awareness, awareness, research and familiarity, option and shortlist, consideration, purchase, reviewing, repurchase intent or defection
JB Media Group’s sales funnel: brand awareness, lead generation, client nurturing, and retention
RAIN Group’s buying process: prospecting/pain point, needs/analysis, solution crafting/intervention, solution presentation/selection, win/commitment, and account development/implementation
Those are a lot of models, but they share some common wisdom.
We’ll explore what you can learn from these modern models—and the classic model— to engage with leads to increase close rates and support new business after purchase.
1. Attract customer attention
Your customers have near-countless options and limited time to explore them all. In fact, the average user only spends 37 seconds scanning articles about products and services they’re considering during the exploration and awareness phase.
If you wait until they’re ready to purchase, you’re too late. They’re on to the next option already. Instead, focus on building top-of-mind awareness before customers even know they need your product and ensure that when a pain point arises, they already know to turn to you.
By tailoring content to the buyer personas you want to convert, you ensure they’re not turned away by information that isn’t relevant to them. This may seem simple, but 73% of consumers are turned off by websites that show ads, promotions, and articles that have nothing to do with them.
But how do you know what these customers want before they do and showcase this information in a captivating way? By learning from your existing leads through requests for proposals (RFPs), analyzing conversion rates and the resources customers most use, and tracking where existing buyers take action.
Then, once you know you’re creating content that leads to love, offer downloadablelead magnets and other content marketing incentives to motivate them to provide their email address. You can continue to build awareness by routinely engaging with them through email drip campaigns that showcase your expertise and service.
2. Nurture your relationships
Consistency is the key to ensuring your leads stick with you through each stage of the B2B sales funnel. For 63% of customers, companies have to demonstrate their knowledge and relevancy three to five times before leads begin to believe the business’s claims. If you’re not consistently putting your products and services in front of them, they won’t consider you a valid option when it comes time to purchase.
It can be hard to convince your sales team to produce content for this early stage, as the return on investment isn’t always obvious. But only 4% of visitors to your website are ready to buy, and the other 96% need nurturing to take the next step.
In fact, it takes the average consumer 84 days to go from the awareness phase through to the consideration phase of the B2B sales funnel. This isn’t just about capturing more leads but making sure good, quality leads actually convert. By investing in this crucial stage of the customer journey, companies generate 50% more sales-ready leads and see a 9.3% higher sales quota.
Similar to the awareness stage at the top of the funnel, one of the best ways to nurture relationships with potential customers is through drip email marketing. Send leads content that they find interesting to engage and educate them while keeping your brand top of mind.
To take this method beyond awareness generation, use a customer relationship management (CRM) system to keep track of what content leads most engage with and which customers are reading and clicking through most often. These metrics signal when leads go from curiosity to exploring options and can signal to your sales reps to reach out.
3. Make the first impression count
As the old adage goes, first impressions are lasting impressions. This couldn’t be more true in B2B sales funnels. When your qualified leads are ready to progress down the sales pipeline, it’s important that your sales team demonstrates they understand each lead’s unique pain points.
Remember all those customer surveys, RFPs, and metrics you analyzed in the awareness stage? Use the lessons learned about the challenges leads face most to establish trust and respect.
Reports have shown that companies whose sales reps focused on solving three to four problems their customer faced on the initial call saw an 81-85% success rate of the customer moving down the sales funnel.
In order to ensure customers respond quickly and positively to your first contact, spend time in the awareness stage to identify a handful of pain points that your customers face. Then, come up with a script of the unique ways your product or service helps leads overcome these challenges. Make sure this resource is quickly and easily available to the sales team members who make initial contact as 30-50% of sales are closed by the first vendor to respond to leads.
Additionally, utilize a CRM to note the specific questions and challenges leads bring up when they first reach out and add these to the first call agenda. Initial calls should quickly point out your value, how you can address their needs, and leave time for questions from the customer.
4. Drive home your value
It’s easy to let your foot off the gas when your customers are ready to convert because you’ve had promising calls and emails that seem like the lead will convert on their own. However, this approach costs companies valuable, easy-to-reach business. 47% of larger purchases are made by nurtured leads—those who receive support all the way to the close—than leads left to their own devices.
Help your leads across the last few yards of the sales funnel by implementing the ASK process:
Align priorities: demonstrate that you understand your lead’s pain points and review how your service resolves them.
Secure commitment: review the additional benefits of doing business with you and answer your lead’s questions.
Keep the relationship alive: if you don’t get a yes right away, make sure you check in with your lead later. Even if they don’t become a customer, they may be able to provide valuable insight on improving your sales funnel.
By engaging with your customers consistently from the first contact to the close through follow-up emails and calls, you increase the chance of their conversion and build a positive customer relationship that lasts long after they purchase.
5. Continue to build the relationship after the close
Here is where more modern B2B sales funnels differ from the classic five-stage model. In the past, businesses focused on just getting the purchase, abandoning their sales and marketing efforts past this last B2B sales funnel stage.
But doing so ignores the power of customer referrals and repeat business.
Your customers know their industry best, and if you nurture that relationship and make sure they’re happy, you can capture quality leads with less work and a greater chance of conversion. You also benefit from return business, which is six to seven times less expensive than the cost of acquiring a new customer, to offset the loss of an existing one.
Like the awareness stage at the very beginning, it all comes back to communication. Check in with your existing customers with surveys and email follow-ups from your sales team. You will learn what they love most about your product, can gather valuable testimonials, and even encourage them to share their experiences with friends and on social media.
If you really want to drive them to refer friends and post reviews, consider offering rewards for these actions like discounts on future purchases and services.
Your B2B sales funnel isn’t just about new leads; it’s about continued growth
The key to ensuring your B2B sales funnel resonates with your customers and guides them seamlessly through the purchase process lies in understanding your pipeline data.
With Zendesk Sell, you can build relationships that count through a sales force automation software that enhances productivity and builds a B2B sales funnel to deliver quality leads and turns customers into advocates.
Request a demo today to learn more about how Zendesk Sell can serve your company and drive more business.
If you’re an SMB sales leader, you have probably experienced a version of this scenario:
You are rushing to get ready to present in your weekly sales meeting about the health of your sales pipeline metrics, but you don’t have a lot of time to prepare. After all, your morning has already been swamped with calls, trainings, and demos. As you open up your CRM to dig into the team’s progress, you realize there is a lot of information, but it’s not clear what numbers are the most relevant for your goals.
Modern sales teams collect a ton of data that can potentially influence how they approach their sales pipeline. That’s great, except for the fact that not all teams have a strategy for parsing and analyzing all that information.
The key to success is not in collecting data, but in separating the signal from the noise.
In this article, we’ll discuss the most important sales pipeline metrics to understand and optimize if you want to gain more leads, keep prospects moving through the sales funnel, and close more deals.
Sales pipeline metrics to track and optimize
If you keep tabs on these metrics, you can know at a glance how your team is performing. Each one provides insights into details about your organization that can be tweaked and optimized so that your sales pipeline is as healthy as possible.
Number of qualified leads
It almost goes without saying, but you can’t close deals without good leads. Track your total inbound and outbound leads to make sure that your sales team has a big enough pool to generate the revenue needed to grow the business.
If you are short on qualified leads for the upcoming quarter, that is a code red. Drop everything and work on a solution. Consider spending more on marketing to bring in more prospects, coaching reps on how to maintain an up-to-date list of contacts, and leveraging prospecting tools to get real-time alerts about role changes amongst your prospects.
Lead scoring tools can also improve lead quality. These are services that can automatically analyze criteria such as location and engagement in order to prune less promising prospects from your list.
MQL to SQL conversion rate
How many of your marketing qualified leads become sales qualified leads? A big drop-off from MQLs to SQLs indicates that the sales and marketing teams are not on the same page.
If that happens, it’s time for sales and marketing to get aligned. This could be as simple as having cross-department meetings featuring both teams. When everyone discusses strategy and goals as one unit, it will be easier to get on the same page.
This is a measure of the number of qualified leads that turn into customers. Track this number over specified periods of time, such as quarter to quarter, so you can measure changes.
If it’s dropping, boost your training, improve your sales processes, and use better sales enablement tools.
If you are closing at a high rate, but your total sales are not where you want them to be, you may have a marketing problem, not a sales problem. It’s time to ratchet up your marketing efforts so you can bring in more leads.
Average deal size
How much revenue does the average deal bring in? Only after you know how big your deals are can you start to plan for the future and strategize ways to increase your deal size.
Use knowledge of your average deal size to determine how you will allocate team resources. If 50% of your account executives are working on closing enterprise accounts, but your average deal size is only $5,000, it would probably be a better use of resources to shift some account executives onto smaller accounts.
Customer acquisition cost
Customer acquisition cost (CAC) is a measure of how much it costs in sales and marketing to get a new customer. You want this number to be as low as possible.
Have a high CAC? Changes could be in order on the expense side of your sales operation. Sometimes a change as small as approving business expenses only when they are related to prospects of a certain deal size can make a big difference.
Customer lifetime value
Lifetime Value (LTV) is a measure of how valuable every customer is over the course of your business relationship. It’s an especially important metric for Ecommerce companies, as they rely heavily on recurring purchases from the same customers.
To boost LTV, analyze low- and high-performing audience segments and tailor your sales and marketing strategies accordingly.
LTV to CAC ratio
The LTV to CAC ratio is a measure of the efficiency with which you acquire customers.
If you have a LTV to CAC of 5:1, it means that for every dollar spent you get five dollars back in customer lifetime value. For SaaS companies that want to stay competitive, the industry standard for LTV to CAC is 3:1.
If you are only at 1:1, you are probably not going to make money. If you have a fantastic ratio of 5:1, it could be time to pour more money on the marketing fire, because you have an efficient business that only needs more leads to keep growing.
Average sales cycle
This is a measure of how long it takes to close a deal.
Once you know your sales cycle length, you can identify deals that are stagnating in your pipeline. These are the deals that have been in your pipeline for longer than your average sales cycle length. Zero in on those deals, try to identify what went wrong, and strategize on how you can get the deal progressing faster.
One way to help a slow sales cycle is to automate the process of following up with the prospect. Maybe they stagnated because a rep forgot to reach out to see if they had any questions. With a CRM like Sell, reps can program follow-up emails to automatically send at a regular cadence.
Sales by customer
This is a measure of your total sales broken down by customer account.
Maybe you are targeting small, medium, and large businesses, but the bigger businesses are driving most of your revenue. That’s a sign you need to move upmarket and target more enterprise accounts. In knowing that, you can start to budget for hiring more enterprise account executives.
Sales by owner
Sales by owner shows how many sales (or which sales) each rep has made.
In looking at your sales by owner, you gain insight into who your top performing reps are. Talk to the top performers to learn what, if anything, they are doing differently. Implement your learnings into your sales training process.
Deal loss reasons
Losing a deal hurts, but that doesn’t mean you should file away lost deals and never look at them again. By understanding why you lost a deal, you can correct for mistakes and close more deals going forward. Treat every lost deal as a learning experience. With Sell, it’s easy to catalog your heartbreaks so that you can never make the same mistake twice.
As good as it is to track these sales pipeline metrics, they don’t mean anything out of context. Use a CRM like Sell in order to customize your pipeline, visualize the results, dig into the analytics, and implement changes to keep your deals progressing through the funnel. With Sell, you can turn a firehose of data into actionable reports that help you analyze, forecast, and win more deals.
Most of us have relied on a maps app on our phones to help us navigate a new city or find a new destination. We trust it to show us where we are and to tell us what we need to do next — “In 1.5 miles, prepare to turn right,” it might say.
A well-constructed sales pipeline is like a GPS for your sales team. It provides a visual representation of where your prospects are in the buying process, and in doing so, it dictates the next steps that will most efficiently close the deal.
The most effective pipelines are not generic. They are customized to fully leverage the knowledge your team has about the way your customers buy your product. Learn how to build a sales pipeline that matches your company’s sales process. With a customized pipeline, you can introduce the nuances and subtleties needed to help you forecast better and close more deals.
Why sales pipelines matter
If you don’t have a good idea of where you stand, it’s hard to know the best way forward. The best pipeline acts as a series of guideposts that your team can follow as they nurture leads through the sales process; it provides insights into what your reps should be paying attention to each day, helping them determine the next step to take to move a deal through the funnel; and it gives them perspective on how far they’ve come and where they are going, which is important for high-level planning.
While most companies will use roughly the same approach, tweaking the pipeline to fit your product(s) and the needs of your potential clients increases your chances of closing a deal.
How to build a sales pipeline
The optimal approach will be different for every company, but most sales pipelines follow a similar framework.
This is an accounting of all your leads, and it builds the base of your sales funnel.
Tip: Track both inbound and outbound leads so that you can hone your marketing strategy based on the data.
Your reps have defined the needs of these leads and ensured that your product or service meets them. (Leads who won’t benefit from your offerings are designated as unqualified.)
Tip: Always be selling. Your reps should be showing value at this stage, not just qualifying. They should be prepared to introduce case studies and back up their assertions with stats. If you address pain points early, the close will be easier.
This stage is also often designated as “proposal made.” You’ve talked details with the prospect and feel confident you can gain their business.
Tip: Send a well-crafted proposal that can be edited in real time. Make sure to set a follow-up call after giving a quote. Time kills all deals, so make it as easy as possible to get the documents edited and signed.
This is when negotiations start. Knowing that a deal is in this stage indicates your team needs to be prepping its closing strategy.
Tip: If you hit a snag during closure, get a C-suite member to step in to smooth over an issue. Team-based selling is a great antidote for stuck deals.
You must track outcomes, win or lose.
Tip: Note why you won or lost so you can track what works and update your processes.
While this basic setup is often adequate, the optimal order of your pipeline stages, as well as the categories you choose to track, will depend on your business.
Do you offer a free trial to most prospects before going in for the close? Do you get most of your leads through social media marketing? Do you schedule a lot of in-person meetings before closing?
Use the answers to those questions to inform the way you build your pipeline.
SaaS companies will likely have a stage called “Demo.” This gives you a chance to explain how complex software works and how it will help your lead’s bottom line.
A real estate company will have sections for “Property Evaluated” and “Property Listed.”
A financial services company will want to track “Underwriting” and “Application Approved”
A consulting firm will have a stage for “In-person Meetings.”
You don’t want to include so many stages that you lose the ability to understand the health of your funnel at a glance, but there’s no reason you can’t build a funnel that is perfectly suited to your needs.
How to manage your sales pipeline
Visibility into your pipeline is important, but how you keep deals moving is just as crucial.
Know the exit criteria for each stage.
Hard-and-fast rules are helpful for keeping your team on the same page. For instance, prospects might have to meet the following criteria to trigger a proposal: they gave a verbal go-ahead to a rep on the phone to indicate they were interested in a proposal, and they have confirmed that their company has the budget to buy your product.
Create a sales process to complete each stage.
This might be a series of questions you ask every prospect while qualifying them, or an email drip that is triggered if a buyer has had the proposal for over a week but has not been responsive. A well-defined process keeps deals moving because your reps don’t have to make judgement calls about when to update a prospect’s status in their CRM.
Use a CRM to measure progress and collect data.
You can’t improve what you don’t measure. With a CRM like Sell, you can track your deals at a granular level and figure out exactly what is causing bottlenecks in your funnel. Maybe you discover that it’s almost impossible to qualify leads that come in through a certain advertising channel, so you divert funds away from that strategy.
Beat quota through clarity and consistency
Follow the tips above to learn how to build a sales pipeline perfect for your sales team. A well-designed sales pipeline is a tool that helps get your team on the same page and following the same process. This reduces mistakes, boosts efficiency, and makes it easier to ramp up new team members.
When your entire organization knows exactly where each deal stands and what they need to do to move it along, their quotas will fall like dominoes.
The most successful sales teams are also the most organized. They can quickly gauge the status and health of their deals, knowing who to contact, when to contact them, and the right information to share at each stage to keep up a nurturing cadence.
But staying organized isn’t easy. It’s not simple to determine what is important to track, and all too often, critical information is siloed in the personal notes of an individual rep. A good sales pipeline tracking system helps solve these issues.
While CRMs are the industry standard for staying organized, not every company wants or needs to use one at inception. If your sales team has just a few deals in the pipeline, a simple spreadsheet can help you stay organized.
The benefits of a sales pipeline template
It keeps you focused on what matters. The template does not generate fancy visual charts or integrate with other apps. It’s configured to track the basic information necessary for monitoring your deals. Often, that’s all small teams need.
It can be quickly modified to fit the needs of any sales team. Whether B2B or B2C, long sales cycle or short, the template will keep you organized and on track to meet your goals.
It is easy to process. Anyone at the company can take a look at the template and gauge the success of the sales team. Sometimes, less is more.
Here is an example template to download. Plug in your data, nurture your leads, stay on top of your deals, and close more business.
Customizing the sales pipeline template
Use rough estimates for win likelihood. The sales forecast calculations from this template disregard the binary nature of most deals (you either close or you don’t). But they are useful as high-level indicators of incoming revenue.
Focus on the sales stages.Maybe your company is doing a ton of prospecting, and you want to reflect that nuance with more granular outreach stages, e.g., “LinkedIn message sent” and “cold call — left voicemail.” Customization helps teams stay focused on their relevant KPIs.
Consider a CRM as you scale
Your business could end up with a pipeline full of deals that close fast at a low price point. Standardizing the sales process for that situation will reduce mistakes and your win rate.
Or maybe you are grappling with a long sales cycle and a high price point, which calls for an especially organized outreach approach to keep your point of contact engaged and the deal moving forward.
Top salespeople have a reputation for being adrenaline junkies. After all, what is more high stakes than a 10-minute sales call that could land a million dollar, multi-year deal?
But the reality is that those calls are few and far between, and it takes a lot of work behind the scenes to set them up. It’s the unglamorous time spent nurturing your leads, analyzing pipeline reports, and optimizing your sales funnel that sets a team up for those big wins.
Measurement and success go hand in hand. As the famous management consultant Peter Drucker said, “You can’t manage what you can’t measure.”
The following pipeline reports will help you gain insights into your current performance. Use them to move deals through the funnel quicker and drive more revenue.
Number of opportunities
How many deals are in your pipeline across all stages? This measure includes details like new deals, contracts sent, and deals closed.
By measuring the number of opportunities and their fluctuations over time, you get a sense of the health of your pipeline. The goal is to increase total opportunities month over month and to proactively head off challenges as they arise.
Potential pain point: Your pipeline is shrinking, and you don’t think you have enough incoming deals to meet quota.
Solution:Take charge of your pipeline by nurturing the leads that are already in your funnel. Nurtured leads close at a 20% higher rate than non-nurtured leads. Create an outreach cadence so that you are consistently touching base with your leads and making them feel valued.
How valuable is your current pipeline? You find out by measuring the sum total dollar amount of all your deals, as well as the average deal size. The latter is a measure of the number deals in your pipeline, divided by the dollar amount each of those deals is worth.
It’s fine if you have to estimate some of the deal values for individual deals because that will help with strategy and forecasting.
Understanding deal size can also help sales leaders spot problems. For instance, if a rep consistently adds deals that are valued at one-quarter of the average deal size, that may mean he or she will waste time chasing prospects who won’t be adding much to the bottom line.
Potential pain point: There are not enough high-value deals in your pipeline.
What’s the percentage of the deals in your pipeline that turn into customers over a given period? Calculate this by taking the total number deals won and dividing it by the total number of deals created.
A good win rate (also called a close rate) varies by organization and depends on factors such as product, length of the sales cycle, and pricing.
Potential pain point: Your win rate dropped from one month to the next.
Solution: Your reps could be wasting too much time pursuing poorly qualified leads. Invest more in qualifying, even if it requires more time up front. Doing so could lead to fewer total deals in the pipeline, but the quality will be higher.
Average sales cycle
How long does it take the average deal to close? Typically the cycle starts when a deal is created in your CRM and ends when the deal closes. Understanding the sales cycle provides opportunities to fine-tune your overall strategy.
Imagine you discover that, over a certain period, your sales cycle sped up by two weeks. You can dive into the numbers, figure out what was responsible for the improvement, and implement the learnings team-wide.
Potential pain point: Several reps on the team have longer-than-average sales cycles.
Solution: Teach your reps how to align with buyer objectives, add value during every prospect interaction, create a sense of urgency, and overcome objections. A sales coaching program could be in order.
How fast is your company making money? Based on the speed with which deals close and the percentage at which they close, a sales velocity report provides a snapshot of sales team health based on data from the above four metrics.
To calculate sales velocity, multiply together the number of opportunities, average deal size, and win rate for a given period. Then divide that number by your average sales cycle during that period.
Analyzing your overall pipeline development can help you figure out areas to optimize.
Potential pain point: Low sales velocity.
Solution: Home in on which of the four contributing factors is weakest and then adjust accordingly. For instance, the team might be closing 10 low-value deals for every high-value deal. Test to see whether sales velocity improves by directing more resources toward higher-dollar-value accounts, and iterate your strategy based on the results.
This is a measure of every action taken by a sales rep, including calls made, emails sent, and deals created. The goal is to have high activity across the board.
Potential pain point: Reps send tons of emails but make few phone calls.
Solution: Maybe some of your reps believe that cold calling is dead (not true), or maybe they have phone anxiety. There are resources to help them through both issues, and there are tools to help managers review reps’ phone-call performance.
Deals lost (and reason why)
How many deals have been lost? It is painful to lose out on a deal, but it’s also a great learning opportunity. Track every deal you lose, and dig into the reasons it didn’t close so that you can course correct.
Potential pain point: You discover that you’re losing out on deals over perceived value for the price you charge.
Solution: Try to get creative in the ways you show value. For instance, you can raise your prices while simultaneously instructing your reps that they can always discount at least 20% when going for the close so the customer thinks they are getting a great deal. You can also introduce interactive pricing tables so that prospects have the flexibility to figure out a price that works best for them.
Make time for review
Inexperienced sales leaders make the mistake of collecting a lot of data but not setting aside the time to analyze the results and go over their findings.
It can be helpful to set up weekly, monthly, and quarterly check-ins; they help with accountability. Tell your reps the criteria they are being judged on, then use the check-ins to celebrate their wins and provide support in areas they are struggling.
A robust CRM is key to making reviews an efficient and helpful part of a sales process because it provides a bird’s-eye view of all the important metrics.
Leverage pipeline reports
If you set out to climb Mount Everest, you can’t just envision the thrill of summiting. That can be your motivation, but you also have to prepare your gear, make a plan, and hire help. Similarly, the adrenaline rush of the big sale is real, but you can’t get there without methodically laying the groundwork.
Use these pipeline reports to create an efficient, repeatable, and customized process that will help you win more deals.