In the “bigger is better” world of business, it seems ridiculous to suggest that your sales pipeline might be too big, right? Truth is, a leaner, meaner pipeline can make your sales efforts more efficient, increase your sales conversion rate, and boost your bottom line. Let’s take a look at why this is true and how to make it happen:
Sales is a Numbers Game, but…
Are your conversion rates lower than you’d like? Does it take 10 prospects, 15, 20, to result in one sale over time? If so, it’s tempting to think that the top of your sales funnel needs to be particularly fat in order to get an acceptable number of deals to squeeze out the bottom. But if this describes your situation, it might be symptomatic of several problems:
- Your sales processes are inefficient
- Your sales team has difficulty qualifying (and disqualifying) leads throughout the sales cycle
- Your conversion tactics are lacking
In other words, the cure for problems like these is not a bigger pipeline, but a higher quality pipeline, one whose early stage prospects are more likely to become customers. How can you make that happen?
Use a CRM
Many business owners and Sales Managers still don’t use a CRM system. Why not? Maybe it’s fear of the unknown for sales team leaders who are not technophiles; maybe it’s cost vs. perceived ROI; maybe it’s just reluctance to change. But in any hyper-competitive industry today –especially when your competitors have the advantage of modern sales tools – it pays to use a customized CRM system.
A CRM system that is suited to your industry, your market and your sales organization can reveal data you might have overlooked before. It can highlight fixable problem areas. It can help you identify stalled deals and unlikely-to-close prospects. It can put you in control so you can make meaningful changes to your sales strategy and your sales processes.
But a standard, off-the-shelf and uncustomized CRM might also mean that you will have to make compromises and assumptions concerning the data. A better bet is a CRM system that can be customized to your sales organization’s unique needs. While that might cost a bit more than a one-size-fits-most version, it will likely pay for itself quicker than you think.
Be More Discerning When Assessing Prospects in the Pipeline
If you are a Sales Manager or Business Owner, have you ever asked yourself why your salespeople add so many opportunities to their pipeline that have very little chance of closing? Have you considered it might be because this is what you ask them about at every meeting? When you only ask about the new opportunities they have added, along with the size of their overall pipeline, you are telling them that only pipeline size matters and that pipeline quality is not important. It’s no surprise, then, that in the typical sales mindset, adding more prospects to the top of the sales funnel means more opportunities for an eventual sale. But because your salespeople are tasked with nurturing these prospects throughout the sales cycle, more prospects also means more work. And if your conversion rates are low, most of this work will turn out to be wasted effort. Wouldn’t it be better if you could quickly determine which prospects are worth the trouble? And wouldn’t it be better if you could determine this earlier in the sales cycle? You can. The CRM will help, through critical analysis of past results and real-time data. But your salespeople can almost certainly do a better job upfront – and throughout the process – of asking better questions to determine if the prospect should be moved forward in the funnel, backward, or out of the funnel altogether.
Asking the right questions and actively listening to what the prospect says about present and future challenges can help the salesperson quickly discern the effort necessary to convert the prospect into a customer. What this new sales mindset probably requires, however, is a shift from the “always be closing” approach to one where you ditch the pitch and have real conversations to build real relationships. We cover this topic in greater depth here.
Improve Your Sales Process
Businesses get stuck doing things the same way because that’s how they’ve always been done. But when the competition is more adept at reacting and responding to the needs of the marketplace, it’s easy to get left behind. Make no mistake: sales is complicated. There are so many moving parts it can be overwhelming to manage. A well-crafted and utilized CRM can help. And changing the sales mindset from sell-first-listen-later to the opposite can help you continually qualify the prospects in your funnel. In the end, it is likely that your sales process, top to bottom, will need reviewed and revised to fit the marketplace and sales environment in which you operate.
To make necessary changes to the process, Sales Managers need to ride along with salespeople from time to time. They need to ask questions and engage directly with prospects and customers at various stages in the sales cycle. They need to meet one-on-one with sales team members vs. always meeting with the group as a whole. By doing these things, and by using CRM data along with professional intuition, necessary changes can be implemented to make the sales process more relevant and efficient.
At Sales Xceleration, we know that efficiency matters, and when it comes to pipelines, bigger is not necessarily better. Our licensed Advisors help businesses develop and nurture leaner, higher quality pipelines every day. We help them customize and implement CRM systems perfectly suited to their markets and sales environments. We help them analyze, implement and manage more effective sales processes that require fewer prospects to generate more sales. Of course, before we do these things for our clients, we listen and have meaningful conversations.