Whether you are selling a product, service, or home, it goes through the same process from opportunity to close. Managing and assessing sales as they progress through the sales cycle from start to finish is called pipeline management. Understanding your pipeline is important, as you need to be aware of what is coming up and how to move the sale forward.
In order to manage your pipeline, you need to have a firm grasp of your organization’s deal size, time to close, and close ratio, as this can help your business succeed. Forecasting also plays a role in this as it predicts sales activity by extrapolating existing data for a period of time. By forecasting sales, salespeople are better able to estimate what will and won’t close. Forecasting is also important for inventory and hiring.
Whether you are a salesperson or a business owner, it is crucial to be aware of how important pipeline management is and how you can improve it. Here are 4 steps to improve pipeline management and forecasting:
1. Spend More Time Selling
You want to maximize the amount of time you spend selling your product or service in order to generate the most revenue. Different sales tactics work for different companies, so it is important to be aware of what works for you. Salespeople do not spend all their time on sales, and of course have other mundane responsibilities that typically do not generate any revenue, but you should try to minimize the amount of time spent on this.
One of the ways you can improve sales is by ensuring you are reaching the correct target audience for your product. Reaching the correct audience can be done through various tools and apps, such as creating an effective website or using social media to gain customers.
2. Understand How You Will Achieve Your Goals
It is one thing to have a weekly or monthly sales goal, but it is another thing to have a firm understanding of how you will achieve this goal. It is not only about increasing the number of potential sales, but also about the size of the sale and the number of sales that will actually close.
For example, a car salesperson should not just look at the number of potential car sales, but the price of the cars that they’re selling and the likelihood that the buyer actually purchases the car.
3. Utilize Forecasting
Having a process that can predict or estimate what will be in your pipeline of sales is important in managing your sales. This process is called forecasting, which analyzes and utilizes data such as deal size, time to close, and close ratio, to predict sales. For example, mortgage lenders should try forecasting a mortgage pipeline in order to predict which mortgages in the pipeline will actually close or “pull-through”.
Forecasting is important in many respects, as it adds value to an organization. From an HR perspective, forecasting helps with managing hiring and staff retention. For supply chain companies, like manufacturers, forecasting helps with determining the number of materials and products they will need for future sales. Sales forecasting also helps to manage supply and demand, so that your inventory matches your sales targets.
4. Use the Right Tools
In order for forecasting and pipeline management to be effective, you need to train your staff and have the proper tools available for them to use. There are forecasting apps and websites that will make your life easier, but larger companies may want to invest in cloud or server based sales platforms, such as Salesforce. To have a better understanding of your business, it is helpful to have the proper tools to make forecasting easier and more effective.
Improving pipeline management and forecasting is important to businesses and a crucial aspect of the sales process. Different methods will work for different companies, but these are 4 key ways you can improve the management and forecasting of your sales.