Establishing your sales pipeline is the hard part, but once you’re finished by no means does that mean your work is done. Your sales pipeline needs to be maintained. Like anything in sales and marketing you need to test its effectiveness.
Here we’ll discuss how you can outfit your pipeline for peak performance as well as best metrics to track for pipeline health.
Checking for prospects that have been there longer than average:
The buyer’s journey can vary between customers and though you may have an average sales cycle length, some customers may take longer than others. But when does the length of time spent in a pipeline become too long?
This is really a judgment call and depends on the circumstances. For example if you’re selling to an enterprise rather than a small business, your sales cycle will almost surely be longer. Enterprises tend to have a larger number of stakeholders in a buying decision and are less likely to impulse buy for quick fixes.
Now let’s say you’re selling cloud software to a smaller company. You’ve gone over each of your packages, their benefits and prices. You’ve made your recommendations based on your prospects’ needs and made your final offer.
Your prospect has stopped replying to all advances and is no longer interacting with your emails or your website. In this case your lead may have gone cold.
It’s important to continually clean out your pipeline to remove deals that have very little chance of closing. Not only do they cloud where your sales reps should allocate resources, but they also make your pipeline messy and make your analysis harder.
How to Track Your Sales Pipeline Velocity
Your sales pipeline velocity determines how fast leads are able to move through your pipeline.
Tracking this will allow you to determine how quickly you are making money. You can also use it to encourage changes that will allow your pipeline to become more targeted and more efficient.
The formula looks something like this:
|Pipeline Velocity =||# of deals X|
overall win rate percentage X
average deal value
|length of sales cycle in days|
Let’s say you have 100 projected deals in your pipeline. Your win rate is 30% and your average deal value is $1,000. Your sales cycle process normally takes around 25 days.
Your pipeline velocity would look like:
|$1200 =||100 X 0.3 X $1000|
What this means is that you are moving $1,200 daily through your pipeline.
How to Increase Your Sales Pipeline Velocity
Improve your win rate:
Your win rate measures the percentage of prospects that closed the deal. Improving on this metric means that more of your prospects are converted into customers. But how do you go about this?
You can increase your win rate in a multitude of ways and at different points in your pipeline. You can begin by spending more time in your qualifying process. The more thorough you are the more resources are spent on prospects that are the most likely to buy.
You can spend more resources in your contact stage. Building a truly strong relationship with a customer can will them to buy your product. If they feel a genuine connection with you and have a positive experience, that emotion will transfer to their view of your product.
Increase the number of prospects in your pipeline:
Increasing the number of prospects in your pipeline does increase your sales opportunity. If you have a large enough team that can push a larger number of prospects down your sales pipeline you’re likely going to increase your sales velocity.
However, don’t mistake quantity for quality. If your prospects are not sales qualified they will just clog your pipeline and slow your efforts down.
Increase your deal size:
If you are selling more high-value deals, you will increase your pipeline velocity and revenue.
To do so, you can target larger accounts…but, keep in mind that larger accounts generally require more attention and have longer sales cycles.
You can have your sales reps push customers to buy larger packages or your more expensive subscriptions.
You can also encourage upselling and cross-selling.