Your Sales Pipeline Is the Lifeline of Your Business?
A sales funnel, or deal or pipeline is a visual or charted method of looking at your future sales. It helps you manage the sales in process, allows you to chart their progess through the steps necessary to close the sale, and alerts you to problems in individual deals.
We all understand that you will have a far great number of potential sales than you will have closed sales. The pipeline is a way of managing the process you and your sales people undertake to successfully close a sale. It is a way for you to train your sales people in the steps necessary to close the highest percentage of transactions.
Let’s look at the essential steps in sales. Note that, depending on the type of business you are in, there may be more or fewer steps.
A lead is a possibility, it is information about a person or company who may be receptive to buying your goods or services. You hear about a retail construction project and surmise that you may be able to bid for the plumbing portion. You learn of a new party planning business and want to pitch your rental tables and chairs. Or you may find leads by analyzing your current customers and looking at others like them. If your business makes baseball uniforms for little league teams you might branch out to other youth sports. In brief, you have information that someone may want your services but you have not yet approached them.
You send the builder some information on your company and follow up with a call asking for an appointment. If you get the appointment, you likely have a prospect since s/he has indicated interest in your product or service.
You met with the builder of the retail store, made your pitch, discussed the budget, left information on your company and collected a set of plans. This is now a qualified prospect: there is a likelihood of turning this into a sale.
The party planner, however, is a very small company and is not currently offering rental of party furniture. This one remains a lead – at some point in the future it could turn into a prospect, but right now it is not. Check back with them in a year.
A prospect has confirmed that they are interested in your goods or services, has the (financial and other) ability to go forward with the sale, and is ready to buy at a known time.
The prospect is qualified and is ready to look at a proposal showing the specifics of the work to be done, the time frame, the price, and the terms under which the contract will be fulfilled.
You sign a contract for goods or services with the prospect.
Some leads may start down the path to prospects and revert to leads, or fall out of the pipeline at any time. The process allows you to track the number of leads which turn into sales and where you are losing customers at each step. You will be able to measure the probability of closing a sale at each step and look at the percentage of sales closed by each of your sales team.
As the deals progress, or fail to, you will note where each of your sales people fails most often and will be able to offer the specific training needed to enhance your Customer Relationship Management (CRM) at each level.
Example of a Sales Pipeline Spreadsheet
|The Universal Chair Company|
|A. Abernathy||John S.||Website Inquiry||Custom||$10,050||Lead||January|
|Barnett & Co.||Mary G.||Bistro Line||$19,900||Prospect||October|
|Daniel’s||Kathryn H.||Trade Show||Main Line||$7,650||Qualified Lead||December|
|Fantastick Inc.||Edward M.||Website Inquiry||Main Line||$12,000||Lead||February|
|International Events||Kathryn H.||Customer Referral||Custom Tables||$49,450||Prospect||October|
|Latimer & Son||Mary G.||Personal Contact||Main Line||$25,400||Proposal||July|
|Marginal Corp.||John S.||Website Inquiry||Bistro Line||$33,600||Meeting||August|
|Natori & Campbell||John S.||Telephone Inquiry||Custom||$14,800||Qualified Lead||November|
|Producti||Mary G.||Personal Contact||Main Line||$24,600||Meeting||November|
|Randall & Randall||John S.||Customer Referral||Main Line||$37,300||Proposal||June|
|Sam Waters Inc.||Kathryn H.||Trade Show||Bistro Line||$14,000||Lead||March|
|Youth Services||Mary G.||Trade Show||Main Line||$25,200||Prospect||November|