Managing Your Pipeline for Business Growth

You have to put in place the tools to manage your sales efforts. This consists of what is called either a “customer relationship management (CRM) tool” or a “pipeline management tool.” It essentially is a single location that manages all your potential sales opportunities, Your pipeline is the sales process that consists of all the sales steps (called stages) you need to take to turn a person or business into a paying customer. It starts with them being a “lead” or “prospect” (someone who has shown interest in your product or service) and moving them through the sales stages to turn them into a customer.

“You need to drive the activities at each stage that move your prospects through the pipeline.” 

Sales Stages. A pipeline consists of various stages of the sales process.Your goal is move potential opportunities through these stages as efficiently as possible. Typical sales stages consist of:

• Stage 1 – Initial contact: Someone has shown interest in your business from either a phone call or a form completion on your website. These are often called “leads” or “opportunities.”
• Stage 2 – Discovery: Determining whether a prospect has the potential to be a customer (e.g., shown enough interest in your business and is within your target market).
• Stage 3 – Call or Meeting: an interaction that outlines the capabilities of your product or service and how it solves their challenge.
• Stage 4 – Proposal: Send the prospect a proposal outlining why you’re the full package and why it’s good value.
• Stage 5 – Negotiation: You are discussing the terms of your proposal to determine if this opportunity can turn into a paying customer.
• Stage 6 – Closed Sale: The prospect has become a customer.

At the highest level, you want to understand how many opportunities you need to have at each stage of your pipeline to hit your sales goals.

Probability to Become a Customer. Each stage of the pipeline represents a probability that the prospect will become a paying customer. This is called “probability to close” and is expressed as a percentage. Each stage has a different percentage:

• Initial contact – 0%
• Discovery – 10%
• Meeting – 30%
• Proposal/order form – 60%
• Negotiation – 80%
• Closed sale – 100%

Pipeline Coverage. To get one customer, you need to be interacting with ten customers – one of which will buy. The process of finding the ten and turning them into the one (and hopefully more) paying customers is your sales pipeline.