Getting The Most from Your Sales Pipeline

Turning Sales Data into Sales Action

 

A CRM can become one of the most valuable tools in a sales organization, or an expensive electronic filing cabinet. If it’s the latter, your sales team will often resent the time it takes to actively capture and manage the valuable data available. The “electronic filing cabinet” gets filled with incomplete and inaccurate information that is rarely utilized.

Used properly, a CRM pipeline can answer three key questions: Where are the best opportunities? What needs to happen next? Where should we spend our time? A well-managed pipeline should create focus, accountability, visibility, and predictability. If it doesn’t, the problem is not the CRM; it’s the process (or lack of process) behind it.

It took our agency a while to fully utilize our CRM pipeline. At first, it was an electronic filing cabinet that we used to capture information and recall account information prior to a sales interaction. We were sloppy and incomplete in our data collection, which prevented us from leveraging all the benefits of a well-utilized CRM. Now, with much more discipline and a defined CRM pipeline strategy, we are moving more opportunities into the “sold” category. The key is movement. Fully utilizing a CRM empowers a sales team to move opportunities forward to close with greater velocity. Here’s how we did it.

 

How to maximize your CRM sales Pipeline

  1. Define what each pipeline stage actually means

One of the biggest problems with CRM pipelines is ambiguity. Terms such as Prospect, Qualified, Proposal, Negotiation, and Closing sound obvious, but different salespeople often interpret them differently.

Each stage should be clear, defined, and relevant to your sales process. Each stage should also lead naturally to the next step. For example:

Prospect → Qualified: We have identified a legitimate need, decision-maker and potential opportunity.

Qualified → Discovery: We’ve had a meaningful conversation and understand the problem or opportunity.

Discovery → Solution/Quote: The customer has agreed there is enough interest to evaluate a proposed solution.

Quote → Commitment: The customer is actively considering the proposal, and we’ve identified what must happen before a decision.

Commitment → Won/Lost: A real decision has been made.

The key to remember is that pipeline stages should represent customer progress, not salesperson activity. Sending information or a quote doesn’t necessarily mean the customer has advanced.

  1. Every opportunity needs a next action

This may be the single most important discipline in pipeline management. Every active opportunity should answer what happens next, who is responsible, and when it will happen. “Follow up” isn’t a particularly good next step. “Call Jim Thursday to confirm whether the architect approved the alternate specification” is.

A pipeline full of opportunities without scheduled next actions isn’t really a pipeline. It’s a wish list with dollar signs attached.

  1. Prioritize opportunities instead of treating them equally

A company with a strong marketing platform or a salesperson who is active will always have more opportunities than they can manage. A salesperson with 75 opportunities cannot effectively work all 75 of them. Opportunities can be simply graded A, B, or C in terms of revenue potential or viability. Opportunities can also be segmented based on factors such as:

  • Revenue potential
  • Probability of closing
  • Strategic importance
  • Customer engagement
  • Urgency/timing
  • Profitability
  • Relationship strength
  • Competitive position

One useful question is, “If I only had time to work five opportunities this week, which five would I choose?” The CRM should help answer that question.

  1. Measure velocity, not just pipeline value

Sales organizations love saying, “We have $3 million in the pipeline.” That’s interesting information, but potentially meaningless. The better questions are:

  • How quickly are opportunities moving?
  • How long do they remain in each stage?
  • What percentage advance to the next stage?
  • Where do opportunities typically stall?
  • How much of the pipeline actually converts into revenue?

A smaller pipeline that moves consistently can be far more valuable than a giant pipeline filled with stale opportunities.

  1. Use aging to expose stalled opportunities

Every opportunity should have an expected amount of time within a stage.

If a normal quote-to-decision cycle is 30 days and an opportunity has been sitting there for 95 days, something may have changed that needs to be investigated, depending on your average sales cycle. An opportunity that is stalled doesn’t necessarily mean it should be deleted. It means it deserves attention. Advance it. Re-engage it. Move it to nurture. Or close it as lost.

Stale opportunities artificially inflate the pipeline and create false confidence.

  1. Track conversion rates between stages

Instead of looking only at the final win rate, examine what happens between stages.

Imagine: 100 prospects → 50 qualified opportunities → 30 proposals → 12 serious decisions → 8 wins. That tells you much more than simply knowing you closed eight deals. It allows management to identify the constraint. If plenty of prospects are generated but few become qualified opportunities, the problem may be targeting. If opportunities reach the proposal stage but rarely close, the problem may be qualification, pricing, value proposition, competitive positioning, or the salesperson may simply be quoting too early.

Pipeline data should diagnose the sales process.

  1. Work backward from the revenue goal

This is where the pipeline becomes a management tool rather than a historical record. Suppose the annual sales goal is $2 million and the team’s qualified opportunity win rate is 25%. Very roughly, you may need $8 million of qualified opportunities to produce $2 million in sales. Now management can ask: “Do we have enough pipeline?” And equally important: “Are we creating new opportunities fast enough to replace the ones we’re winning and losing?”

A well-managed sales pipeline creates a leading indicator of future revenue rather than waiting for monthly sales reports to tell you what already happened.

  1. Make pipeline reviews about decisions—not reporting

The dreaded sales meeting: “Okay, Rick. Tell us what’s happening with ABC Company.” Twenty minutes later, everyone knows the entire history of ABC Company, and nobody knows what should happen next.

A productive pipeline review should focus on questions such as:

  • What’s changed since our last review?
  • What’s preventing this opportunity from advancing?
  • What’s the customer’s next decision?
  • What evidence tells us this deal is real?
  • What assistance does the salesperson need?
  • What’s the next action?
  • Should this opportunity still be in the pipeline?

The CRM should eliminate the need for lengthy status reporting so the meeting can focus on strategy and coaching.

  1. Track reasons for wins and losses

Don’t just mark an opportunity “Lost.” Capture why. Price? Competitor? No decision? Timing? Product fit? Relationship? Budget? Project cancellation? Specification? Service capability? After enough opportunities pass through the pipeline, patterns emerge.

A salesperson serving the building industry might discover that losing a deal isn’t primarily because of price. It could be because the product wasn’t specified early enough, the contractor wasn’t comfortable with installation, lead times were too long, or the rep became involved too late. That information can change the entire sales strategy.

  1. Utilize a CRM tool that fits your organization

Some CRM programs are very complex and robust. Others are easier to use and input data into. Choose the CRM that fits your industry and sales process, provides the outputs you need, and that the sales team can easily use.

Evaluate pipeline management tools based on how quickly they can answer, “Where should I spend my time today?” A solid pipeline should also provide the following data:

  • Pipeline value
  • Opportunities by stage
  • Conversion rates
  • Win/loss rates
  • Average sales cycle
  • Pipeline aging
  • Forecasted revenue
  • Salesperson activity
  • New opportunities created

Don’t buy the CRM with the most capabilities. Buy the simplest CRM that does the important things exceptionally well and that your salespeople will use.

The biggest CRM pipeline mistakes

Properly managing and utilizing a sales pipeline can be challenging. The key is to avoid the common mistakes sales organizations make.

Mistake #1: Using the CRM as a contact database. Customer information gets entered, but opportunities aren’t actively managed.

Mistake #2: Pipeline stuffing. Salespeople leave weak opportunities in the pipeline because a large pipeline looks good.

Mistake #3: Confusing activity with progress. Three phone calls and two emails don’t mean the opportunity advanced.

Mistake #4: Quoting too soon. A request for pricing automatically becomes a qualified opportunity, even though nobody understands the customer’s real buying process.

Mistake #5: No next action. Opportunities sit indefinitely waiting for the customer to do something.

Mistake #6: Poor CRM hygiene. Close dates, dollar values and stages aren’t updated, making forecasting unreliable.

Mistake #7: Focusing exclusively on closing. Management pays attention to late-stage deals while ignoring whether enough new opportunities are entering the top of the pipeline.

Mistake #8: Turning CRM into surveillance. When salespeople believe CRM exists primarily so management can monitor them, adoption suffers. The system needs to help the salesperson sell more effectively.

Mistake #9: Measuring pipeline size instead of pipeline quality. A $10 million pipeline isn’t impressive if $7 million hasn’t moved in six months.

Mistake #10: Automating a bad process. CRM automation can make a good sales process more efficient. It can also make a bad sales process bad much faster.

The objective isn’t to keep the CRM updated. The objective is to keep opportunities moving. A great CRM pipeline should function almost like a GPS for the sales organization. It tells you where you are, where you’re trying to go, where you’re getting stuck, and what action you should take next.

When properly managed, the pipeline moves the organization from “What did we sell?” to “What are we likely to sell, and what should we do today to improve that outcome?” That distinction can turn your CRM from a record-keeping system into a sales management system that helps you generate more sales.


Rick Wickizer is a trained and ICF credentialed business coach and a successful entrepreneur. Rick has served the building industry for over 30 years and is dedicated to adding value to all he works with. For information about coaching services provided by Rick, go to: rickwickizer.com

To subscribe to this blog, go HERE