A car needs fuel, a business needs a sales pipeline
A car needs fuel regardless of it being powered by petrol, diesel or electricity. We take it for granted when we get in the car that it will take us to where we want to go, but one thing is for sure, we need fuel to grow our business and that fuel is sales.
In this latest sales feature, we look at creating a sustainable sales pipeline. A pipeline is a visual representation of the stages of your sales process and is particularly useful to a business owner in a number of ways. The Sales team can see what is being worked on and moved forwards, the Accounts team can weight the likelihood of conversion and therefore cashflow and P&L, the Operations team could use it to balance supply and demand on time, services or goods and the Leadership team use it as a key performance metric to measure company growth and future direction.
The sales pipeline is crucial for any size of business and regardless if you are in B2C (business to consumer) or B2B (business to business) you’ll be able to make use of it. A pipeline is basically your next sale, usually you will have a number of stages in your sales process but, put simply, it is likely to look a little bit like this;
Stage 1 a lead/enquiry
Stage 2 a discussion/meeting/survey
Stage 3 a quotation
Stage 4 sale agreed
Stage 5 fulfilment of goods, product or service
The above has not changed in hundreds of years of selling, but the key is to have an ever-moving set of the above within a pipeline. You need to, of course, have leads and your leads will be generated from many different sources, you then need to be progressing leads along the pipeline and not all will result in a sale.
The key to any pipeline is being realistic on the value of the lead and the probability of lead turning into a sale and the timescale for that happening. If you are able to be honest on all three of those questions then you can create a meaningful long-term pipeline and from it forecast sales and forecast percentages through your pipeline. Do you know your “close ratio”, ie how many leads you turn into a sale? Do you know your “sales cycle” time period, is how long from enquiry to sale?
Every industry is very different and selling a product also has variants, but the principles are the same even through an ecommerce platform. In ecommerce how many visits do you need and what is your conversion from visit to sale. The challenge for any business is keeping a pipeline moving, if you are a sole trader such as a consultant or a tradesperson you can be busy doing and your pipeline stops, so you finish a job and have to restart the pipeline and in the meantime you have probably lost sales.
To create your own pipeline, you can either use an Excel spreadsheet or use some software such as Hubspot and create your very own database and your own pipeline. If you use a spreadsheet then simply create 5 columns titles Enquiry, Discussion, Quotation, Sale and Fulfilment then all you do is add information in the first column and then move that along the columns until the end. You may want to put in a sixth column for Lost and add any deals that you lost and why. Always put dates on each stage so that you can do some analysis.
The key to more sales is to keep the pipeline full and moving, make sure you keep filling the front end of your pipeline with leads and moving the leads along the pipeline. The discipline is not just getting the lead, but moving it along your pipeline as the pipeline is there to give you the fuel to drive your vehicle forward.