By William Marchesano, Technology Advisor & Evangelist
Welcome back! Today we are going to take a step into the exciting world of sales pipeline management. At first glance you may not think it’s an exciting topic but once you realize how much of an impact it has on the entirety of your business, it becomes much more exhilarating. The obvious connection made between a sales pipeline and your business is sales. It goes much deeper than that though. We are going to cover how properly managing your sales pipeline can also affect product inventory, hiring, operations, and of course…sales.
Like most businesses, chances are you currently have a sales process in place. Depending on the complexity and size of your business, your sales process may exist as a loose idea or a well-defined process. Either way, it’s the journey your business takes from the point of acquiring a lead to converting them into a customer. Your sales pipeline represents the stages in which your current opportunities exist. The number of stages you use is dependent on your sales process but 6-7 stages is the most commonly recommended number. Understanding your opportunity life cycle, or amount of time it takes to complete each stage, should be the next level of importance considered.
Now that we have these areas defined let’s discuss how they will affect the seemingly different areas of your business. If your company sells a product, ideally, you like to verify your supply meets customer demand. Oversupply leads to increased costs such as warehousing and undersupply can lead to missed sales. Maybe your business also manufactures the product. That can amplify these costs even further. If it’s your company goal to operate on a just-in-time (JIT) model, understanding when and how much supply you’ll need to meet demand can be predicted through proper sales pipeline management.
Much like in our product example, a services company has much to gain with sales pipeline management. In this instance, your staff are your product. Depending on the type of service your company offers its clients, different skill sets can be required from different employees. Let’s say your business specializes in Service A, Service B, and Service C. You currently have 50 employees that are qualified to do Service A, 20 employees that are qualified to do Service B, and 10 employees qualified to do Service C. Over the past 6 month market trends have changing and your business started getting more requests for Service C. These deals are now being won and you find yourself understaffed to deliver what was sold. By using sales pipeline management and knowing the life cycle of each type of opportunity you would then be able to recognize new potential business in the early stages and then decide whether to hire more staff that can do Service C. On the flipside, you may also identify a reduction in demand for Service A. In this scenario, it may make sense to start training your Service A specialists to learn Service C instead of hiring new staff.
Using sales pipeline management helps your sales team become better at selling. Time management is often cited as one of the top reasons a sales person fails. Understanding what stage an opportunity is truly in allows you to dedicate your time more efficiently. As we mentioned earlier, a key component of sales pipeline management is understanding the opportunity life cycle. This is important to a sales person because it gives them an idea of how long an opportunity should take in a given stage. If it’s sitting in the same stage noticeably longer than it typically should, it may mean something was missed and has stalled the progress. It could also possibly mean the salesperson is not properly guiding the opportunity through the sales process. If management can identify this shortcoming, they can help their salesperson fix it and improve.
As a manager or business owner, you have company goals to hit to “keep the lights on” and grow your business. Using sales pipeline management allows you to see where you are currently from a sales perspective and helps you forecast to make sure you are hitting quarterly and annual goals. This is also part of the business intelligence and analytics for your organization. One of the best tools used for sales pipeline management is a CRM. Microsoft Dynamics CRM has done a really nice job developing the opportunity and sales pipeline components of their solution. If your organization is already using Microsoft Office 365 and you are looking for a pipeline management tool, Microsoft Dynamics CRM can be a tremendous solution for you.
As always, I encourage you to reach out to me to discuss these topics in deeper detail. I hope you enjoyed and found this week’s article informative. If you’re interested in some how-to related CRM material, check out blogs by my colleague Ben Ward here. Till next time…
About the author:
Will has over 16 years of experience in business development, team management, and project management. Will has worked at Managed Solution for over four years and is currently advising businesses on best CRM practices and implementations. Will’s focus is on process improvement and analytics specializing in Customer Relationship Management (CRM). Will is a Microsoft Certified Professional, with certifications in Presales Technical Specialist – Microsoft Dynamics CRM 2013, Sales Specialist- Microsoft Dynamics CRM 2013, Microsoft Dynamics CRM 2015 Application, Sales Specialist- Office 365, Sales Specialist- SMB Infrastructure and Sales Specialist- Datacenter.
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