Sales
Sales pipeline management relates to the process of tracking sales activities and calculating future revenue (forecasting) throughout the sale cycle. Sales teams that effectively manage their pipelines gain visibility of ongoing discussions, the ability to hold sales reps accountable plus maintain more granular control over the complete sales process.
Thanks to the information age, modern sales involves the buyer having control of the sales conversation. Buyers are capable of making informed purchased decisions by simply researching online.
It’s normal now for a buyer to have already researched and created a shortlist before they even engage a sales rep and you can’t blame them. Nobody likes being ‘sold to’ especially when they’re trying to gather unbiased information.
However, with a solid system in place for pipeline management, you can take back some of the control and power. Being highly organised and methodical gives you visibility into required details about your prospect so you can close the deal. You’ll be able to:
It all starts with identifying and defining the pipeline stages that represent how your buyer progresses through the sales cycle. Managing these stages helps save time and allows your sales reps to focus on those prospects most like to convert.
Companies with a formal sales process generate more revenue. In fact, they experience 15% higher revenue growth than those without. You can check out this Harvard Business Review study to find out more but the message is clear, effectively managing a pipeline has a measurable effect on revenue.
Keep reading our Guide to Sales Pipeline Management to learn about our approach to managing the pipeline, forecasting revenue, and closing more deals.
An understanding of your sales cycle is the first step in defining your pipeline stages and effective pipeline management. Although sales cycles depend on the service or product sold, how it’s purchased and the type of customer, there are 5 stages that are typically common across all businesses.
An understanding of these stages is important as it gives you a high level view of your sales process plus makes it easy for you to identify your goals at each point of the sales funnel.
Now when it comes to managing and measuring your sales pipeline, we’re actually focusing on the sales cycle post-opportunity creation. But to do this, we’ve got to first clarify the different lenses we use to interpret a sales cycle.
This involves looking at the sales process from the perspective of a buyer. The idea is to analyse their journey and understand the psychology behind why a buyer moves forward or decides to stop. This lens allows us to maximise customer value even after the initial deal is won.
The sales funnel is your best friend when it comes to managing your conversion rate from one stage to the next. The funnel is widest at the top which means it has the largest number of prospects at the beginning of your sales cycle. As you go down the funnel, it starts to narrow as prospects begging to drop off. By looking at the conversion rates along the way, you’re able to identify where you’re losing buyers the most.
Your pipeline is an overview of how many opportunities or deals you have at each stage of the sales cycle plus the probability of each closing. For sales managers, it’s a great way to tell what your team is doing as you can measure active conversations and forecast new revenue.
To simplify the upcoming explanation and recommendation on pipeline stages, we’re going to look at them through the lens of managing a pipeline inside a CRM platform.
A CRM platform (customer relationship management platform) is a sales tool that helps you track prospect and customer interactions. Within every CRM are ‘pipelines’ and these must be setup in a way that reflects your sales cycle.
Most CRMs like Pipedrive, ActiveCampaign, Hubspot, Salesforce, Close.io each give you default stages and are typically enough to start with for new businesses. However, our recommendation is to keep things simple.
Simplicity makes reporting easier and removes confusion from sales reps.
At Fide, we recommend four stages for prospects.
Prospects start in the qualified stage once you have confirmed they meet your qualification criteria. At Fide, we assign a 25% probability of closing but depending on your business and solution, this may be different. The criteria you use for qualification is up to you but later in this article, we’re going to provide advice on different processes and criteria.
Prospects reach this stage once there is a discussion about pricing and scope. At this point, you may have already sent a proposal and presented your solution. The goal here is to come to an agreement that provides value to both businesses. At Fide, we assign a 50% probability.
Prospects in this stage have explicitly expressed a plan to purchase from you. At this point, you would have sent through a contract ready for signing. Prospects at this stage have a high probability of closing and usually just need to get final approval from decision makers.
This is the end goal - a prospect that has been won and become a client/customer. Because these deals have already closed, they’ve got a 100% probability. Although some businesses may not use ‘Closed Won’ or equivalent stage (and simply mark the deal as ‘won’), we strongly recommend it as it makes reporting much easier.
Over time, you may observe patterns or details in the sales cycle that justify adding a new stage. Similarly, after a few months of using these stages, you may find that the probabilities need to be changed. For example, you may find that once a prospect has expressed commitment that the probability of closing is actually 85%.
The qualification process and criteria you use allow you to identify whether or not a prospect has a need for your solution and is likely to purchase. It’s typically the first stage measured in your pipeline as it allows you to hone in on prospects that are likely to continue their buying journey.
There are a number of different qualification methods out there and we’ll explore four of the most common below. Before we do so, we’ll need to differentiate between a sales qualified lead and a sales qualified opportunity.
An opportunity is a prospect that is actively engaged and has already been qualified as a potential buyer. Opportunities can also be referred to as deals (depending on your CRM) and thus should be entered into your pipeline when ready.
Many sales teams make the mistake of waiting until a buyer is fully qualified before entering them in as an opportunity. Our recommendation is that they be entered in earlier as it allows you to gain more insights into the beginning of your pipeline.
Successful B2B companies use sales development reps (SDRs) to prospect and qualify SQLs on behalf of the closers. SDRs are the biggest pipeline drivers for B2B companies.
The process goes like this: an SDR reaches out to cold and inbound leads via email, LinkedIn, phone and/or SMS to generate interest and set a sales appointment for the closing rep. Once an appointment is set, the lead is now an SQL.
They can be labelled as an SQL because the most basic criteria have been met - you’re talking to the right person at the right company. You may not know whether they have the right budget or are ready to make a purchase, but you know that there’s interest.
SQLs are thus opportunities - they’re literally an opportunity for a rep to have a detailed conversation to learn more about the solution on offer and if it fits your prospects needs. This is why we strongly recommend entering them as opportunities/deals in your CRM.
SDR teams speed up sales cycles by shortening the path between qualified lead and opportunity. This is a service provided by Fide so if you’re interested to find out more, click here.
Once this opportunity makes their appointment, the question is now how do you qualify whether they're a good fit? The short answer is to first create criteria, hold a discovery call and ask the right questions. We’ll dive into the ‘right questions’ in the next chapter, but for now, lets focus on the process and criteria.
The four methods we’re going to look at are the most popular. They include BANT, MEDDIC, FAINT and CHAMP.
The BANT method was developed by IBM in the 1950s and is one of the most popular ways to qualify a B2B prospect. The reason we’ve gone for BANT first is because it’s the best place to start. It's simple, yet effective and can be modified over time as you gather more data and insights.
MEDDIC is a new methodology and was developed by PTC in the 1990s.
Over the years, MEDDIC has also evolved and variations have developed. For example MEDDICC uses an additional C for Competitors and advises sales reps to learn more about a prospect’s status with your competitors.
Unlike BANT, the MEDDIC method is far more layered and detailed and better-suited for account-based sales. We recommend this method for enterprise sales as it’s usually a smart choice for companies with a long sales process and high-dollar offerings.
The biggest benefit that comes with MEDDIC is the clarity early on. It’s easier to identify which prospects are likely to purchase. The challenge however, is getting this information early on and figuring out whether or not it’s that necessary so early in the cycle.
FAINT was developed by The RAIN Group and is similar to BANT. It’s a great option for companies whose solution is typically not budgeted for. For example, products or services in the early stages of adoption that a buyer doesn’t plan to purchase.
If you're using an SDR team to generate SQLs, this methodology may not be appropriate. A reason for this is that one of the criteria is to generate interest and this would have already been done by your SDRs.
CHAMP is a modern-day version of BANT as it focuses on the prospect's needs above the requirement to qualify them. However, the difference to BANT is that this method simply focuses on the challenges first.
It requires the sales rep to understand why the prospect would want to buy before offering a solution. This makes it easier to later to discuss approval and payment. BANT on the other hand, has budget/money upfront.
Another differentiator is the focus on prioritisation instead of timing. Instead of just looking at how soon the solution can be implemented (or your product purchased), it looks at how urgent this challenge is to the prospect. This gives a more accurate timeline of purchase which makes CHAMP a strong alternative to BANT for many teams.
Sales should be process and data-driven which means the qualification process and criteria you decide on needs to be refined over time.
Although BANT is the oldest method of the four, it still remains a very effective place to start.
At Fide, we use a blended approach with CHAMP as the foundation. There's no perfect framework and you'll find that over time, choosing the process and criteria is going to evolve with your particular needs.
The sales discovery process is an opportunity for sales reps to learn more about their prospect, their company and business needs. Discovery questions allow you to uncover vital information about a buyer's priorities and decision making process.
In this section, we're going to look at the best practices when it comes to discovery. Although we will be providing sample questions later, it's important to understand that discovery is not a Q&A. It's a conversation.
Buyers can often mislead sales reps. In our space, it's very common for a prospect to not disclose they're in contact or already working with a competitor. Similarly, the extent of the challenge they're facing and how vital it is to be solved may also be hidden by the buyer.
To get through these layers, you need to hold an honest and empathetic conversations. Buyers aren't stupid and can pick up on salesy exaggeration so it's important to be upfront from the beginning and set the right expectations.
A typical question we get about our appointment setting service is 'how many appointments can we expect per month?' Because we've run countless campaigns and a prospect typically shares some metrics with us, we can provide a realistic estimate.
Sometimes this estimate is lower than what competitors have claimed or their expectations but we've found that more often than note, buyers appreciate the honesty as well as some insight into the statistics surrounding competitiveness and appointment setting efforts.
Sales in almost every industry has a stigma attached and salespeople are typically associated with dishonesty. Conducting discovery properly shows that you're genuinely trying to help the prospect find the best way to solve their challenge.
As the name suggests, the goal of a discovery meeting is to discover more about the prospect, their business and their challenges. The greater your understanding of their challenges and needs, the better you'll be able to establish whether or not your product or service is a solution.
Prior to a discovery meeting, you should already know the prospect's role within the company, their company's core products/services, and their industry. Tools like Detective and LinkedIn Sales Navigator can help you complete more research. If you've engaged with similar prospects before, you can also draw on past experiences by checking your notes in your CRM. Coming into a discovery meeting with knowledge of their industry and challenges builds trust.
Having a copy of your discovery process in front of you can also make your meetings go more smoothly. For example, you could write a list of your discovery questions and map out the ideal structure and topics of your call.
The sale is in the follow-up so it's important you schedule the next call or meeting while you're on the phone. Sending an email and calendar invite isn't enough - get verbal confirmation.
On top of all of this, a call should never be left unresolved and open-ended. Set expectations as to what will happen on the next call.
Discovery meetings are about learning and the only way you're going to do this is by listening. A study by Sales Hacker using data from Gong.io found that the golden ratio for a sales conversation is 43% talking, 57% listening.
If you find that you're talking more than the prospect, there are a few things you can change. The first is to ask open-ended questions to avoid the yes/no answers. The second is to intentionally leave an awkward pause after they answer. This encourages them to elaborate and go into further detail.
Below we've included some examples of open-ended discovery questions that you can use or modify during qualification. To make things simpler, we've organised the questions using the BANT criteria.
The idea with these questions is to figure out if the prospect has the budget to spend on your solution and if they do or can they create a budget and allocate funds. For example:
Authority questions are designed to determine if you're speaking to a decision maker. If you use an account-based sales approach, the questions will need to be modified as you're likely to engage with different buyer personas throughout the sales process.
The Need questions hone in on your prospect's challenges and pain points. Of all the categories of questions, this helps the most when it comes to nurturing and following up.
Timeframe questions allow you to calculate an expected close date, determine how urgent the challenge is for your prospect and whether or not your prospect can be qualified now or in the future.
Be inquisitive and ask open-ended questions to learn more about the prospect and build rapport. The focus should be on listening and having a conversation - not a Q&A.
For many, closing the deal is the biggest challenge. However, we believe that if you properly understand the prospect's needs and you can convey the value of your solution, closing a deal should be easy. The reason for this is after a prospect has expressed interested, negotiated and committed, closing is a natural result.
Depending on the size of your solution, the are three main things you'll need to do in order to negotiate effectively.
Understanding what leverage you have and how to use it is the key to negotiation. In a sales scenario, leverage is simple - your prospect needs something and you have it. The end goal is put these two pieces together whilst keeping both parties happy.
A common example of leverage is when you leverage urgency by offering a discount to a prospect if they sign before a certain date. This is known as a now-or-never technique.
Buyers understand that you need to compromise or make a trade-off. After all, they probably have a sales team within their company and understand that quotas and KPIs need to be hit. Here are some other ways to create leverage.
It's important to not cheapen your offer by offering discounts when they're not necessary. Value should be able to stand on its own but the tactics above can help a stalling sales process.
The goal of leverage isn't to get a prospect to buy something they don't want or need. It's to move them further along and get them closer to purchasing the solution they're looking for.
This is typically something that is covered when using an account-based sales approach. However, when you're typically dealing with one person throughout the entire sales process, it's important to remember to engage all stakeholders as soon as possible.
A big stakeholder that is often overlooked is the legal and accounts teams. They can typically be a big barrier when it comes to closing the deal within the expected timeframe.
In particular, legal should be engaged during the negotiation stage when you and your prospect are discussing terms. We believe the earlier the better.
Depending on your business and the solution your selling, it can sometimes make sense to send through a standard terms or agreement with a prospect even earlier in the process. Doing this early gives your prospect the opportunity to get familiar with the contract language early, address issues early on and prevent disagreement and blockades later in the sales cycle.
If objections start to pop-up later in the sales cycle, one thing you can always do is remind the prospect of their underlying pain points and challenges.
Being cautious and covering all bases is completely natural but you'll need to answer these objections head on. The last thing you want to do is tarnish the trust and rapport you've built by making it appear like you're going straight for their bank account. What you should be doing is emphasising the challenges you've discussed and remind them how your solution will improve their daily life and impact their bottom line.
Remember: focus on the value of your solution. The value always comes from solving their challenges in a way that meets their requirements. If your product does not solve their challenges, you shouldn't be trying to close them.
When it comes down to trying to close the deal, every word you say will make an impact. As a result, you need to be very strategic about how you ultimately ask for the prospect's business and doing it in a way where 'no' isn't an easy answer.
Below are some staple techniques you can try out with your buyers. The idea behind each of these is that the buyer comes to the conclusion on their own - they realise they need a solution and yours is the best one.
We touched on this before but it involves creating leverage via urgency. The idea is to offer additional benefits that can only be obtained within a specific timeframe. This technique is very useful when dealing with prospects that procrastinate on approval. Here's an example of what it would look like:
"I know your team has been hesitant about approving the budget for this solution before next month. So what I can do is offer a net 30 payment term instead of 14 if we go ahead and schedule your implementation for next week. What time would be best for the kick-off call?"
The positive choice involves giving a prospect two different options that both result in a sale. This works particularly well for SaaS. This puts the buyer at ease as instead of pushing them on a certain offering, they're instead provided with options.
"Are you more interested in the essentials package, or would you like to go with the pro package to ensure you have enough seats?"
"So, we have our regular database building which provides a fully built CRM of your target accounts. Or there's our Lite program which provides you with a list of target accounts for your team to call and email. Which program should I include in our agreement?"
This is a very common technique and something you would have encountered when dealing with salespeople as a buyer. Unlike the others, this technique allows you to gauge interest and pull out the remaining objections. Here's how it works:
Rep: "On a scale of 1 to 5, how interested are you in getting this finalised by Friday?"
Prospect: "I'd say I'm at a 4."
Rep: "Out of interest, why a 4 and not a 5?"
Prospect: "I can tell this service is much more efficient, but it costs more than our current manual process."
Rep: "Yeah, that's a reasonable concern. We have other clients that were also hesitant to invest more in this area. But at the end of the day, they found that this service pays for itself within 3 months."
The balance sheet close involves collaborating to create a pros and cons list. The tactic is great for helping visualise a return on investment. The key to this, however, is that the number of pros need to outweigh the cons. On top of that, we recommend going with the bad news and cons first. Here's an example:
"So, to summarise everything... The cons are that we're looking at having to training your users on a new CRM and the complexity of the initial implementation. However, a pros is that you'll have full access to our implementation team before and after implementation. So really, ongoing support is the only issue. However, our training program and documentation is second-to-none, so you and the team will be more than qualified to make changes along the way. Some other pros include the fact you'll now have better visibility marketing and sales data PLUS the CRM is cheaper than what you're currently using. It sounds like we've come to a decision here?"
When it comes to delayed deals or long sales cycles, the summary close is a great option. It involves you summarising all the features, benefits and value that are of your prospect's interest. Here's an example for a imaginary SaaS product:
"You’ve decided on the business plan, which includes up to 20 user profiles and unlimited contacts. This plan also allows you to create custom dashboards and reports which will help you get the data you've been wanting. You also get free phone support which is normally priced at $200 per month."
A lot of the time, the buyer just needs a little push. By creating leverage, urgency and collaborating with your prospect, you'll be able to close more deals. It's important to remember that a sales cycle is typically weeks and not hours so it's important to remind your prospect as to why they engaged you in the first place.
Once you start to consistently close new business, the next step is optimising your sales process. To do this, you'll need to analyse your pipeline and determine where improvements can be made.
With there being so many sales metrics to track and CRM reports to generate, it can be a bit tricky focusing on what's important. So in this chapter, we're going to look at the 5 most important metrics.
The number of total opportunities or deals the quickest way to check how healthy your pipeline is. Especially when compared to previous months, you can get a good idea of what improvements or changes need to be made.
On top of this, you should also take note of the number of opportunities or deals in each pipeline stage. Stages with a large number of deals indicate a bottleneck and that there are challenges trying to get the buyer to move forward in the sales process.
Most CRMs also allow you to very easily report on conversion rates between stages. This is another way to identify bottlenecks and those parts of the sales process that need to be optimised. As a simple example, if you find that only 10% of your deals are moving from Qualified to Negotiation, it could indicate that the quality of your qualified leads are poor and your SDR team needs to be a bit more thorough when creating opportunities.
Sales cycle length is a measure of how long it takes for a prospect to close. For B2B sales, the cycle can be anywhere between a couple of weeks to six months.
The cycle length gives you insight into how efficient your sales process is. Ideally, you want the sales cycle to shorten as it means your sales team can engage with more opportunities and close more deals in a set timeframe.
If for whatever reason you're unable to generate a report on the average sales cycle length, this is what you can do.
When creating an opportunity or deal, most CRMs allow you to assign something called the 'Deal Value', 'Deal Amount' or 'Deal Size'. This amount is a dollar figure that equals how much you expect the deal to close for.
For all businesses, knowing the average deal size plays a huge role in forecasting revenue each month. Without it, you'll know roughly how many deals should close but no dollar figure.
For sales reps, they can also use the deal size to prioritise accounts. Logically, you'd invest more time and effort into the higher-value deals over low-value deals.
This is easily the most important metric for measuring the success of your sales team as it quantifies how effective your team is at converting opportunities into customers/clients.
To calculate this is very easy: simply divide the total number of qualified prospects by the number of deals won. Convert the amount to a percentage and you've got your closed won rate.
This percentage helps forecast the number of deals you'll close based on how many opportunities are in your pipeline. For example, if you have 100 deals in your pipeline and your close rate is 25%, you'll close 25 deals. Combine this with average deal size and average sales cycle length and you've got a more in depth forecast of future revenue.
For sales managers, closed won rate is the easiest way to differentiate your strong from weak closers.
Low close rates are bad and we'd suggest aiming for a minimum of 25%. Any lower than this and it indicates one of two things. Either:
When it comes to low close rates, we strongly recommend gathering feedback from both won and lost deals. Ask your lost deals why they went with a different provider and why your won deals chose you over a competitor.
For sales teams that rely on a large volume of deals, pipeline velocity can be a useful metric. Pipeline velocity is a measure of how much revenue you generate per day and is a great way to quantify how quickly deals move through your pipeline.
Measuring your pipeline and analysing data is the best way to optimise sales performance. The metrics mentioned above and processes we've set out in our guide should all help you maximise your revenue.
At the end of the day, effective sales pipeline management allows you to continuously modify and optimise your sales process to suit your ideal customers.
Make sure you understand the buyer's journey and build a pipeline and sales process to match. Ensure SDRs are providing quality opportunities to your closing team and that your closers have the right criteria and framework to qualify opportunities.
From there, revenue and sales success will follow.
If you're interested to see how our sales services can help you keep your pipeline full, feel free to book a consultation with one of our experts.
