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Article 12 min read

Sales pipeline management 101: What it is and best practices

Learn how a CRM can help streamline your sales pipeline management process.

By Donny Kelwig, Contributing Writer

Last updated October 6, 2022

Sales pipelines may be fantastic structures for organizing your sales operations and processes, but they’re not self-sufficient—they need to be managed, too.

The purpose of sales pipeline management is to estimate the upcoming sales you’re aiming to close. Without proper management, you could be missing profitable opportunities. Do you know how many qualified leads are converting? Has your sales team overlooked deals that are now lost? How many deals are worth pursuing?

Over time, poor pipeline management can also cause inaccurate sales forecasting, which affects critical planning information, such as resource allocation and budgeting. Revenue growth can suffer as a result. An inaccurate and poorly managed sales pipeline can eventually lead to the self-destruction of a business.

To avoid the pitfalls of poor management, you need a standardized sales process that includes defined steps for each stage of the pipeline. It also helps if you have a sales CRM with pipeline management functionality that automates the process and keeps all your salespeople on the same page.

With that in mind, let’s dive into how a sales CRM can revitalize your pipeline management:

What is pipeline management?

What is pipeline management?, holding different shaped blocks

Pipeline management is the process of tracking sales opportunities from start to finish and analyzing the failures and successes along the way to make improvements. When done effectively, pipeline management helps your company define ideal sales strategies that promote growth.

Pipeline management is doable with a variety of software tools—you could even use a very detailed spreadsheet—but it’s most successful when managed with dedicated sales pipeline software. Because your sales pipeline covers so many interactions, the more centralized you keep your data, the easier it is to analyze.

Characteristics of sales pipeline management

By definition, sales pipeline management manages your sales pipeline, but that’s a very broad statement. When you break it down, sales pipeline management specifically looks at:

  • Metrics and analytics: The collection and analysis of sales pipeline data give you insight into every pipeline stage.
  • Sales forecasting: Future sales predictions based on accurate metrics and analytics help with planning.
  • Sales team strategies: Evaluate your sales team and the tactics they use—along with the effectiveness of those tactics—to inform your strategy.
  • Management tools: Technical applications or software applications increase pipeline productivity.
  • Pipeline optimization: Streamline your pipeline for the fastest possible conversions.

Depending on your current tech stack and sales setup, your company can divide and define these categories further. However, thinking about these five building blocks is a great start to managing your pipeline. It’s much less helpful to look at your sales process and simply say “make it better” than it is to investigate and refine smaller sections with a keen eye.

Why is pipeline management important?

Why is pipeline management important?, putting puzzle together

Your sales pipeline is the framework of your entire business and the catalyst behind your business development. Every single lead, prospect, and customer you have goes through your sales pipeline in one way or another to help your company thrive. That makes your sales pipeline one of your holy grails—managing it should be a top priority.

While it’s true that sales happen all the time without pipeline visibility and insight, companies that operate within this outdated model are at a severe disadvantage. According to a recent study, companies with effective pipeline management have an average growth rate that’s approximately 15 percent higher than companies that don’t. Moreover, businesses that employ specific practices push that percentage up to an impressive 28 percent.

The numbers are clear: When you put the time and effort into managing your sales pipeline, the growth and revenue results speak for themselves.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.

Pipeline management process

Why is pipeline management important?, writing in notepad

Now that we know what pipeline management is, let’s walk through the seven stages and look at how CRM capabilities streamline each step of the management process:

  • Find your sales prospects

  • Determine lead potential

  • Identify decision-makers

  • Follow up

  • Measure results

  • Analyze results

  • Update your pipeline

5 best practices for sales pipeline management

5 best practices for sales pipeline management, holding hourglasses

Once you have your sales pipeline management system in place, you’ll need to maintain it for maximum impact. Here are five best practices for sales pipeline management:

1. Metrics, metrics, metrics

The most important gift your sales pipeline gives you is detailed sales data. Tracking and analyzing metrics across your pipeline provides insights into exactly what works and what doesn’t. According to experts, the key metrics you need to track in your sales pipeline are:

  • Average sale

  • Average sales cycle

  • Cart abandonment

  • Cart-to-detail rate

  • Client retention

  • Closing rate

  • MQL to SQL conversion rate

  • Conversion rate

  • Cost per acquisition

  • Customer lifetime value

  • Deal profitability

  • Lead source

  • Lead volume

  • Lead velocity rate (LVR)

  • Lost sales

  • Opportunity-to-win ratio/rate

  • Projected sales value

  • Qualified leads

  • Return on ad spend

  • Sales pipeline velocity

  • Time spent in each stage of the pipeline

All these metrics are easily manageable in your sales CRM. You can track different strings of sales data and then generate reports based on individual analytics. You can also share those reports with relevant parties with the click of a button.

2. Schedule regular, company-wide updates

Because your sales pipeline touches so many different aspects of your company, everyone must be on the same page when you’re instituting changes. Set up quarterly or annual meetings where the entire company can learn about new strategies based on pipeline analysis. When all your departments are aligned, they can work together to effectively implement your new ideas and avoid communication silos.

3. Keep it short and sweet

The longer you make your sales pipeline, the harder it is to manage. Keep your sales pipeline, cycle, and process as short and straightforward as possible. Not only is it easier for your sales reps to stay on top of a shorter to-do list, but having a shorter pipeline gives your prospects fewer opportunities to back out or change their minds. Get the prospect going, close the deal, and move on to the next.

4. Train your sales managers

You can’t personally oversee every aspect of your pipeline on a day-to-day basis, but your sales managers can. When you train them on pipeline management strategies, you give them the right tools to ensure pipeline changes are implemented successfully.

Need more proof? Companies that train their sales managers in pipeline management see their revenue grow 9 percent faster than those that don’t.

5. Take it one small improvement at a time

It takes time to make changes, especially if you’re looking at a complete pipeline overhaul. Don’t try and change everything at once. Instead, focus on specific sections of your pipeline and work in stages. Not only is it easier for your teams to learn this way, but it’s easier for you to correct any mistakes that pop up along the journey.

Start using the ultimate pipeline management tool today

Successful businesses keep close tabs on clients and prospects in their sales pipeline. And the best way to do that is with a sales CRM that allows you to track information by month, quarter, or year—say goodbye to tracking data in endless, repetitive spreadsheets.

With a sales CRM, you can also measure the sales dollars and closure rates for potential sales, then analyze the results to help you manage and—most importantly—continually improve your sales pipeline.

Request a demo of Zendesk Sell today and establish a strong management plan for your sales pipeline.

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