In this short video, I want to help you understand what is a sales pipeline, and how managing it can help you grow sales.
Sales pipeline is probably the most useful concept when it comes to sales. It’s not a sales trick and it does not depend on luck.
So, What is a sales pipeline? I’m not a very good live drawer, so I’ve prepared an illustration on this whiteboard.
First, you need to define the stages of your pipeline. If you’re selling web design services, these may be
* Prospect chosen – in other words, people you think would be potential buyers, but you haven’t talked to yet
* Meeting agreed – people you’ve contacted and agreed to meet
* Proposal sent – people who you know need your service, and who have asked for a quote which you have sent
* Won – these people are why we’re in this business in the first place.
If you’re selling real estate or cars, these stages may be different but the principle is the same. The thing is that not all prospect eventually buy. So, the first thing you need to find out is “How many people should you contact to make one sale?”. Let’s put some customers in this pipeline.
In this example, out of 8 people I call to, 4 agree to meet with me, and 4 will be lost;
of these 4 two have no need right now, and will be lost at this point. Eventually, I make one sale, and one potential customer will not buy for whatever reason.
So in this example there’s a 50% stage-to-stage conversion. (sidenote: in real life you validate the real conversions by going out and doing the sales work – a month or two might already show you quite real numbers).
So, to make 1 sale, I need to approach 8 people. If you want to make 2 sales, you need to approach 16 people; to make 10 sales, you need to approach 80 people.
To make a specific number of sales, you need to do a certain number of activities. That’s the trick with sales pipeline! This is how you guarantee sales results.
Of course, you can also learn to increase conversions, go after bigger deals, or get people to move to the next stage faster, etc. But that’s a topic for another video. Until next time!Try Pipedrive⇒ Free trial