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Anatomy of a sales pipeline

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Dave Kirk
Dave Kirk

Whether we have a 3 day sales process or a 3 month sales process, we all need to manage our pipeline of sales. Here is a quick and easy way to understand what it is, how it can help and how you can manage your revenue using it.

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THE ANATOMY OF A SALES PIPELINE Sales Meeting
The Body: Sales Steps The Brain: Probability of Closure The Heart: Weighted Target Sales Pipeline A Quick Guide to Understand Sales Pipeline Management
Easy right?
Sales Pipeline Management Definition - A Sales pipeline represents your sales process consisting of all your sales steps you need in order to sell your product to your customer. Definition - Each sales step represents a single or group of actions that need to be taken in order to complete that specific phase of the sales process and move to the next one within the sales pipeline. Funnel and Pipeline Think of the funnel as the entry point to the end of the pipeline
The Sales Funnel Big at the Top Smaller at the bottom You want the prospects that are not ready to buy to leave the funnel to make room for those that are ready to buy
Keep It Simple Having too many stages in the pipeline is counter- productive. Five is the optimum number stages in the pipeline. DON DALY A typical sales pipeline could have the following steps within the sales process: Discovery Realization of Need Consideration Conversion Retention
Why is the Funnel Wide At The Top
Is Your Pipeline like This?
Or This?
Or This?
The probability of closure shows you the likelihood of selling your product during that particular sales step. If you need to call 10 prospects in order to close 1 at the end of the sales cycle, you have a 10 % probability of closure for that step A typical pipeline, as mentioned previously, could have the following probability of closures for each step: Initial Contact 0% Qualification 10% Meeting 30% Proposal 60% Close 100% Probability of Closure (Brain) Managing Your Pipeline
Managing Your Pipeline Consider your opportunity as a potential sale. In order to move into the sales pipeline you need to know three parameters. Who are you selling to? What is the value? What is the potential closing date? Each sales opportunity has its own specific value Weighted Target (Heart)
Weighted Target (Heart) Weighted target is equal to the sum of the total opportunity value in each sales step multiplied by the probability of closure for that step. DAVID BROCK If the probability of closure is 10% for a specific stage, and you add a value to an opportunity, then 10% of that value contributes to the weighted target
Example of Pipeline Management Lets make a calculation (1 opportunity = $2,000) Initial Contact 0 % x 35 opportunities = $0 Qualification 10 % x 20 opportunities = $4,000 Meeting 30 % x 10 opportunities = $6,000 Proposal 60 % x 5 opportunities = $6,000 Close 100 % x 2 opportunities = $4,000 Weighted TARGET = $20,000 Sales Pipeline What happens if you start each month with these opportunities and keep moving them through your pipeline, while gaining more?
Or, Start With The Sales Goal 5 New Clients Each Month 5 New Clients This is an example for a very modest 5 New sales in a month Using The Power of Five Each step is a multiplier of five
Hot Prospects - 25 Determine Hot Prospects 5 New Clients New Clients * 5 = Hot Prospects Needed This is an example for a very modest 5 New sales in a month To get 5 New Sales you need 25 Hot Prospects
Hot Prospects - 25 Qualified Prospects - 125 Determine Qualified Prospects 5 New Clients Hot Prospects * 5 = Qualified Prospects Needed To get 25 Hot Prospects you will need 125 Qualified Prospects
Hot Prospects - 25 Qualified Prospects - 125 Determine Suspects Suspects - 625 5 New Clients Qualified Prospects * 5 = Suspects Needed For 125 Qualified you will need 625 Suspects
Hot Prospects - 25 Qualified Prospects - 125 The Funnel Suspects - 625 New Clients - 5 625 125 25 5 Suspects in the top of the Funnel Qualified Prospects in Middle of the Funnel Hot Prospect in the Bottom of the Funnel
What is a Sales Pipeline ? A Sales pipeline is as a visual representation of your sales process where all your opportunities are displayed and neatly arranged according to their phase in your sales cycle. Behind each sales stage within the sales pipeline is a set of actions that need to be completed in order to successfully finish that stage and move the opportunity to the next stage.
What is a Sales Pipeline ? A Sales pipeline is your performance analyzer that keeps you focused on achieving your sales goals and keep track of the health of your sales pipeline Its an enormous mistake to stop prospecting because your pipeline is healthy right now.
THE ANATOMY OF A SALES PIPELINE Sales Meeting

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Anatomy of a sales pipeline

  • 1. THE ANATOMY OF A SALES PIPELINE Sales Meeting
  • 2. The Body: Sales Steps The Brain: Probability of Closure The Heart: Weighted Target Sales Pipeline A Quick Guide to Understand Sales Pipeline Management
  • 4. Sales Pipeline Management Definition - A Sales pipeline represents your sales process consisting of all your sales steps you need in order to sell your product to your customer. Definition - Each sales step represents a single or group of actions that need to be taken in order to complete that specific phase of the sales process and move to the next one within the sales pipeline. Funnel and Pipeline Think of the funnel as the entry point to the end of the pipeline
  • 5. The Sales Funnel Big at the Top Smaller at the bottom You want the prospects that are not ready to buy to leave the funnel to make room for those that are ready to buy
  • 6. Keep It Simple Having too many stages in the pipeline is counter- productive. Five is the optimum number stages in the pipeline. DON DALY A typical sales pipeline could have the following steps within the sales process: Discovery Realization of Need Consideration Conversion Retention
  • 7. Why is the Funnel Wide At The Top
  • 8. Is Your Pipeline like This?
  • 11. The probability of closure shows you the likelihood of selling your product during that particular sales step. If you need to call 10 prospects in order to close 1 at the end of the sales cycle, you have a 10 % probability of closure for that step A typical pipeline, as mentioned previously, could have the following probability of closures for each step: Initial Contact 0% Qualification 10% Meeting 30% Proposal 60% Close 100% Probability of Closure (Brain) Managing Your Pipeline
  • 12. Managing Your Pipeline Consider your opportunity as a potential sale. In order to move into the sales pipeline you need to know three parameters. Who are you selling to? What is the value? What is the potential closing date? Each sales opportunity has its own specific value Weighted Target (Heart)
  • 13. Weighted Target (Heart) Weighted target is equal to the sum of the total opportunity value in each sales step multiplied by the probability of closure for that step. DAVID BROCK If the probability of closure is 10% for a specific stage, and you add a value to an opportunity, then 10% of that value contributes to the weighted target
  • 14. Example of Pipeline Management Lets make a calculation (1 opportunity = $2,000) Initial Contact 0 % x 35 opportunities = $0 Qualification 10 % x 20 opportunities = $4,000 Meeting 30 % x 10 opportunities = $6,000 Proposal 60 % x 5 opportunities = $6,000 Close 100 % x 2 opportunities = $4,000 Weighted TARGET = $20,000 Sales Pipeline What happens if you start each month with these opportunities and keep moving them through your pipeline, while gaining more?
  • 15. Or, Start With The Sales Goal 5 New Clients Each Month 5 New Clients This is an example for a very modest 5 New sales in a month Using The Power of Five Each step is a multiplier of five
  • 16. Hot Prospects - 25 Determine Hot Prospects 5 New Clients New Clients * 5 = Hot Prospects Needed This is an example for a very modest 5 New sales in a month To get 5 New Sales you need 25 Hot Prospects
  • 17. Hot Prospects - 25 Qualified Prospects - 125 Determine Qualified Prospects 5 New Clients Hot Prospects * 5 = Qualified Prospects Needed To get 25 Hot Prospects you will need 125 Qualified Prospects
  • 18. Hot Prospects - 25 Qualified Prospects - 125 Determine Suspects Suspects - 625 5 New Clients Qualified Prospects * 5 = Suspects Needed For 125 Qualified you will need 625 Suspects
  • 19. Hot Prospects - 25 Qualified Prospects - 125 The Funnel Suspects - 625 New Clients - 5 625 125 25 5 Suspects in the top of the Funnel Qualified Prospects in Middle of the Funnel Hot Prospect in the Bottom of the Funnel
  • 20. What is a Sales Pipeline ? A Sales pipeline is as a visual representation of your sales process where all your opportunities are displayed and neatly arranged according to their phase in your sales cycle. Behind each sales stage within the sales pipeline is a set of actions that need to be completed in order to successfully finish that stage and move the opportunity to the next stage.
  • 21. What is a Sales Pipeline ? A Sales pipeline is your performance analyzer that keeps you focused on achieving your sales goals and keep track of the health of your sales pipeline Its an enormous mistake to stop prospecting because your pipeline is healthy right now.
  • 22. THE ANATOMY OF A SALES PIPELINE Sales Meeting