In my Diary of an Entrepreneur podcast I talk about every aspect of my experience of starting and running Stada Media, from finding the right premises, to building my team, to securing contracts worth tens of thousands of pounds each.
But those contracts don’t appear from thin air and instantly ready to sign. There’s a whole process that leads up to rubber-stamping revenues, and sales pipeline management is a marketing discipline all of its own.
What is a sales pipeline?
You might be asking yourself, “What is a sales pipeline?” Investopedia calls a pipeline “progress toward a long-term goal that involves a series of discrete stages”. That can include R&D, sales, acquisitions and investments.
At its most basic, your sales pipeline is the process that brings money into your business. That involves several sales pipeline stages, from finding and qualifying leads, to setting appointments, confirming interest, negotiating the sale and finally signing a contract.
Why is a sales pipeline important?
Managing a sales pipeline allows you to keep sustainable business coming in and generate ongoing revenues. Your sales pipeline shows you how much potential income your marketing activities are generating, and how much of that potential you are converting into actual paid business.
Knowing how to manage your sales pipeline is crucial to achieving concrete long-term goals. I discuss this throughout The Diary of an Entrepreneur and it’s part of the groundwork for Stada Media’s ‘Smart Year’ in 2023-24, when we are targeting revenue of £2 million.
Common challenges with sales pipelines
A good starting point to learn how to manage a sales pipeline is to identify some of the challenges you might face, and how to overcome them. You can find out more about some of these in Series 3, Episode 11 of The Diary of an Entrepreneur.
Cutbacks
Cutbacks, by definition, remove potential value from your sales pipeline. If a prospect’s budget is cut by half, you’ll need to sell that business twice to achieve the same value. You can mitigate this by ‘locking in’ value early on, with an upfront deposit from new customers and long-term contracts on fixed retainers for existing clients.
No communication
Silence earns you nothing. While communicating takes time – and therefore costs your business money – it’s worth it if it generates positive ROI. Make sure you keep the lines of communication open with prospects, and especially with those who seem very close to placing an order.
Waiting
Waiting erodes value from sales, revenues and cash flow alike. This is especially true at the time of writing (early 2023) when economic growth is low but price and cost inflation are stubbornly double-digit. Get that value into your business bank account as soon as you can, by automating payments, chasing overdue invoices and encouraging customers to settle their accounts faster – even if you decide to offer a small discount for payment within seven days.
Closing deals
Getting a prospect to actually commit to giving you their money is one of the most obviously crucial sales pipeline stages. Closing a deal can have an immediate impact on your revenues, as it’s often good practice to take a 50% deposit upfront. If you can get paid for some or all of your work before you do it, you’re well on your way to a healthier cash flow.
Sales pipeline management tips
Let’s take a look at some top sales pipeline management tips to help you convert prospects into sales and revenues:
Follow up when you can
Don’t waste time. If you have a spare minute, follow up on a prospect with a call or email. It’s not about pester power (although that can work!) but it’s about keeping the ball rolling so the prospect doesn’t think you’ve given up on them.
Make sure you’ve got a team around you
A good team is key to keeping on top of all the stages of a sales pipeline. You might find a prospect responds to being referred to a colleague with specific knowledge of their industry, or who shares a demographic characteristic with the prospect. Even if not, working as part of a team can be hugely motivating in a challenging role like sales.
Keep a focus on the quality of your leads
Not all leads are equal. But also, quality is not always about the size of the prospect’s budget. If it takes three months to land a £100,000 contract, but you can land ten £10,000 orders from small businesses every month, you might decide to focus on the faster income from SMEs. Alternatively, you might consider a big-brand client to be worth the time and money as a way to boost your own brand value for the future.
Scrutinise your sales pipeline stages
Whatever processes you put in place and whoever you decide to work with, keep an eye on your sales pipeline stages and which prospects are progressing along the way to conversion. This allows you to maintain the momentum with those who are highly engaged, while deciding how much effort to put into those prospects showing more signs of sales pipeline inertia.
Closing thoughts
At Stada Media, sales and marketing is our business, but managing a sales pipeline is still something we keep a conscious focus on. If you’re working in another industry, don’t neglect your sales pipeline – you might have good word of mouth and repeat customers, but it’s important to be vigilant so you can take prompt action if your sales, revenue and income begin to drop.
To talk to me about any of this, drop me a line or connect with my socials via my Contact details.