Question: How do you get people to buy what you’re selling? Answer: Build a sales pipeline.
At first, it sounds like a pretty straightforward question.
But when you think about it, the process of making a sale is rather complex. Even if you sell small-ticket items, a lot goes on from the moment an individual becomes interested in your product to the moment they actually buy it.
It’s not enough for you to simply be present when a prospect is ready to buy. You need to be there through every step of the buyer’s journey, providing information and assistance to help nurture your prospects along the path to purchase.
In short: You need a solid sales pipeline.
Case in point: In 2015, Harvard Business Review found that companies that begin implementing a formal sales process almost immediately experience a 28% increase in revenue.
If your sales process isn’t exactly at the point of being considered “solid” just yet, don’t worry: you’re not alone. According to a 2013 study by the TAS Group (now Altify), only 46% of sales representatives feel their pipeline is accurate and effective.
So if you do have a sense for how to approach prospective customers throughout each stage of their journey, you’re offering better service than more than half of the other organizations they engage with.
In this article, we’re going to define the basic stages of the sales pipeline and provide examples of what you can do for potential customers at each stage in order to nudge them toward conversion.
But first, it’s important that we make a distinction between the terms sales pipeline and sales funnel.
Sales Pipeline vs. Sales Funnel: What’s the Difference?
It’s common to see the phrases “sales pipeline” and “sales funnel” being used interchangeably.
But, despite the fact that both the words “pipeline” and “funnel” conjure up an image of liquid flowing from one place to another, these phrases do not refer to the same thing.
For the most part, a sales funnel is a universally-accepted visualization of the stages a customer goes through when making a purchasing decision:
First, they become aware of a problem in their lives, and of the fact that a number of companies offer a product that could solve this problem. Next, they begin to consider their options and evaluate similar items offered by various companies. Finally, they decide to buy. Some models, like the one above include retention and advocacy stages as well.
On the other hand, a sales pipeline is a specific set of actions taken that moves a prospect from a lead to a paying customer. This pipeline describes what an organization’s customers actions and needs are throughout the buyer journey and what marketing and sales teams do to move prospects through the process.
Generally speaking, a company’s sales pipeline follows the sales funnel process – it’s just about the actions taken along the way. A visual representation could mimic that of the sales funnel.
The general idea is as follows:
- Teams focus on lead generation when a prospect is aware of their problem and is currently researching a solution
- Once the prospective customer is deep into their research and becomes interested in a specific solution, teams will shift their focus toward nurturing the lead
- After the prospect has shown a high propensity to become a paying customer, teams will shift their efforts toward making a sale
As we begin describing the stages of the sales pipeline – and the actions marketing and sales teams typically take during these stages – the distinction between sales funnel and sales pipeline will become clearer.
The Major Stages of a Solid Sales Pipeline
Now that we have a better understanding of the purpose of creating a typical sales pipeline, we can go into greater detail in discussing each of the major stages.
Upon an individual’s first time engaging with a company in any way, shape, or form, they “officially” enter the sales pipeline as a lead.
But even before this happens, there are certain actions a company can do to increase the chances that a person notices them in the first place. These methods fall into two categories:
- Inbound marketing: A company creates content (such as advertising, blog posts, and podcasts) or makes public appearances (such as trade shows) in the hopes of catching the eye of prospective customers without contacting them directly.
- Outbound marketing: Sales teams actively reach out to potential customers through cold calling and/or emailing methods in order to introduce said customers to their services.
After a lead has shown a passing interest in the company, they’ll still need to do something before a sales team can consider them as having moved forward in the pipeline.
For example, if someone visits your website for the first time, they’re a lead. When and if the individual were to sign up for your mailing list or request additional information in some way, they become a qualified lead (which we’ll get to in a moment).
After the individual initiates contact (or is receptive to contact, in the case of cold-calling), there are two main tasks ahead:
- Immediately provide the valuable content that was promised. In the example we used above, if someone signed up for your mailing list in exchange for valuable content like an ebook, white-paper, or discount code, that content needs to be delivered – quickly. You won’t win any bonus points (or new customers) by delaying this part.
- Gather more information…quickly. Take this initial opportunity to collect more information. Why did this person come to your website? What problem are you solving for them? What are their goals? What questions do they have? What answers couldn’t they figure out on their own?
The answers to these questions will help you determine not only if they’re likely to purchase from you, but whether or not your company is prepared to meet their needs by clarifying any holes in your value proposition (perhaps you’re getting repeated requests for something you don’t have).
If everything’s seems like a go, you can move the lead into the next stage of the sales pipeline.
Once a lead has engaged a bit more deeply with your company and has shown more than a passing interest in what you have to offer, there’s still no guarantee that they’ll become a paying customer.
This is when you should really ramp up your outreach efforts to learn more about your potential customer’s needs and offer a solution for whatever those needs may be. In doing so, you’ll know if the lead is worth pursuing or if it makes sense to move on.
The process of qualifying leads is broken into three parts:
- Marketing-Qualified Leads
- Sales-Accepted Leads
- Sales-Qualified Leads
Let’s take a look at how to approach each type of lead separately.
In the previous section, we talked about the importance of immediate action once an individual takes the initial step forward in a relationship with your company.
A potential customer becomes a marketing-qualified lead once they’re ready to receive more information from you.
As mentioned, you’ll want to follow up directly to determine what they want from your company, and whether you should invest more time in pursuing them.
One of the most effective ways of doing this is to set up a series of email Autoresponders as follows:
- Email #1: Provides additional information about your services and ask the lead to reach out if they’re interested in hearing more.
- Email #2: Gives more resources to inform the lead about the general topic at hand and again ask them to contact the company to learn more.
- Email #3: Asks if they want to engage further with the company, or if they’d like to be removed from the mailing list.
Using the responses you get, you can put a lead into one of three categories:
- Qualified and ready to buy. Move them forward in the sales pipeline.
- Qualified but not ready to buy. Continue sending them newsletters, offers, and other info. Set an in-house reminder for a future date that makes sense for a follow up.
- Uninterested completely. Keep their information on file but do not pursue.
There’s a common misconception in the world of business that marketing and sales operate independently of one another.
While marketing and sales do operate in different capacities within an organization, this isn’t to say the two should never come into contact with one another.
Think of a track team running a relay race: although each individual runs on their own, each person relies on every member of the team to win the race.
To keep the metaphor running (see what we did there), the potential customer is the baton that’s passed from the marketing to sales as they move through the pipeline.
As we said earlier, prospects who are still in the process of being marketed to are considered marketing-qualified leads. Once you begin actively trying to sell to this prospect, they’ll be considered a sales-qualified lead (which we’ll get to momentarily).
When transitioning a prospect from marketing to sales, they’re considered a sales-accepted lead. During this stage, you’ll organize all of the information gathered throughout the marketing phase to determine the absolute best way to sell to that specific prospect.
The passing of the baton from marketing to sales doesn’t require any customer-facing action; the focus here is on a fast, efficient in-house transfer process that ensures no information is lost.
Once the transfer from marketing to sales is complete, the individual is considered a sales-qualified lead.
Sales-qualified leads are those who are ready to make a purchase.
As such, it’s the sales team’s job to do everything possible to make it happen. This means truly getting to the heart of the individual’s problem, and determining the best possible offer your company can provide. It also requires showing customers exactly what they get once they pay you.
Additionally, sales teams should lock in logistics like billing, subscription plans, service tiers and options, and so on.
At this point the prospect is yours to lose. This isn’t a bad thing, though; but you need to make conversion easier by removing any doubt from the buyer’s mind that doing business with your company is the right decision.
Closing (and Beyond)
Once a buyer has all the information you’ve given, the decision is ultimately up to them.
If they do decide to buy, you’ll want to begin the delivery and onboarding process immediately. The faster your new customer can start, the more efficient and effective your company will appear in their eyes.
Take time to consider the customer’s goals along with the purchase they made. Do you have additional products or services they would benefit from?
Build in well-timed service upgrades, cross-sells, or add-ons after the customer is on board. This can immediately increase the ROI and LTV of a given customer without a lot of extra effort.
After a customer experiences success with your product or service, find ways to ask them to promote your product or service to others.
An incentivized referral program is a great way to spark additional sales. Find clever or fun ways to ask your loyal customers to spread the word about your services.
Either way, remember that satisfied customers are a massive asset to your company; don’t ignore them just because you’ve already gotten them to convert.
Learn from The Ones That Got Away
On the flip side, if a lead decides not to make a purchase, all is not lost.
Use the information you’ve already collected to improve. Reflect on the journey each lost lead took to see if something went wrong or could be improved upon.
It is also possible a lead simply wasn’t ready or at liberty to make a purchase at the time. In which case, as we mentioned earlier, stay in touch with them; provide them with valuable content free of charge; remind them when they’re ready to take another look you’ll be there to help them out.
Creating a solid sales pipeline is essential in order to streamline the process of generating leads, making sales, and delivering top-notch service.
Approaching sales with a structured game plan can make a huge difference in the amount of profit your company generates.
You may have noticed that marketing automation factors heavily into your ability to reach prospective customers at every stage of the sales pipeline. Regardless of how engaged someone is with your brand, you can use marketing automation to deliver relevant content to them to keep your offerings their mind.
Robly can help you set up autoresponders and craft messages that keep prospective customers “on the hook,” and bring them closer to conversion. Check out everything else Robly has to offer on our Features page, and sign up for a free trial of our services when you’re ready.
Do you have any other tips for building a solid sales pipeline?
— Matt Duczeminski is a professional writer specializing in helping entrepreneurs improve relationships with their customers. You can reach him on Twitter @mattducz. Matt lives in Philadelphia with his wife, Sarah, and he’d probably get a lot more work done if his cat would stop bothering him.