You’ve probably heard the age-old adage before, “selling is a numbers game.” Makes sense: more leads equates to more sales, right? Close, but not quite.
Merely adding numbers to the first stage of your pipeline could be costing you more than you realise.
Let’s take a look at the principles of a sales pipeline and the metrics that matter when it comes to growing your bottom line.
What Is A Sales Pipeline?
A sales pipeline is the visual representation of all your prospects and where each lies in the purchasing cycle. It shows the stages that need to be followed to advance a prospect from a new lead to a customer.
The sales pipeline allows sales representatives and managers to keep track of all prospects, forecast sales figures, and identify possible leaks (or blockages) in your sales process.
This is where a new lead enters the pipeline. Initial contact can either be established through inbound (compelling the customer to contact you) or outbound (cold calling) marketing. It is where the dialogue with a potential customer starts.
After initial contact, it is important to establish the likelihood of the lead converting into a customer. This is known as lead qualification. Most companies use a process of lead scoring (such as BANT) to determine the lead’s Budget, Authority, Need and Timeline to make a purchase.
Sales representatives then meet with qualified leads to understand more about their needs and explore the solution that best fits.
Should the potential customer indicate interest in making a purchase, the sales representative will prepare a detailed quote which outlines the proposed solution, addresses service inclusions, exclusions, the cost, and duration of the agreement. There may be some negotiation required before the deal is concluded.
This is where both parties are satisfied with the outcome. The client signs on the dotted line and your new customer relationship begins.
Effective management of your sales pipeline will drive more revenue.
Strike while the iron is hot. Especially when it comes to sales. It’s critical to have a system in place which allows you to prioritise the most important leads first.
According to a recent survey, you have a 91% higher chance of converting a lead if you call them within a minute of them reaching out to you. Contacts called within 24 hours of reaching out only have a 17% chance of converting in comparison.
While it might look great to have 10 000 leads in your pipeline, it costs precious time and resources to sift through these leads and identify serious prospects. Instead, starting with 100 high-quality, warm, leads allows you to improve your closing ratio. By fine-tuning your sales process you will close more deals, more often.
Align your marketing and sales goals
It is well known that businesses which have aligned their marketing and sales strategies generate higher revenue than those that have not.
Both your sales and marketing teams must have a clear understanding of your organisation’s ideal customer, their goals and their pain points. Your marketing and sales team also need to have a shared definition of what constitutes a marketing qualified lead (MQL) and a sales qualified lead (SQL).
Work backwards to hit your targets
Use your current win-rate and average deal size to inform how many leads you need in your pipeline to meet your sales quota.
If your target is to close R500 000 of new business and your average deal size is R100 000, this means you need to make 5 sales to meet your quota.
If you currently need to attend 10 sales meetings to make one sale, and it takes you 100 leads to secure 10 sales meetings, then you need to have approximately 500 quality leads entering your pipeline.
Implement a lead scoring system to prioritise hot leads first
Lead scoring attaches a numerical value to your leads. A lead is assigned points for having taken specific actions, helping you predict their potential to convert (and overall value to your business).
The leads with the highest score should be contacted first. By attending to the hottest leads first, you’ll be able to improve your win-rate.
Make sure you ask the right questions when qualifying leads - simply having the right title within the correct industry does not make someone a qualified lead.
Having trouble with your lead generation? We’re here to help. Leads4Africa specialises in generating and nurturing quality leads, to enable your sales team to focus on what matters most: winning deals and growing your bottom line. We’ll take care of the initial contact, qualification, and we can even set up your first meeting. Sound like the sales win you need? Contact us today!