Sales pipeline management: What is it and why do you need it?

What is sales pipeline management?

A sales pipeline is a visual representation of every stage in a sales process that helps you easily identify where your qualified prospects are in the buying journey. It gives a snapshot of the total number of opportunities across different stages. Freshworks CRM lets you visualize, manage, and track the progress of every deal in the pipeline.

With sales pipeline management in Freshworks CRM, you can:

• Select the right deals and activities to focus on every month

• Determine how close you are to winning each deal

• Monitor your sales team’s pipeline (as a sales manager)

• Use the pipeline for post-selling activities

Challenges of sales pipeline management

Effective sales pipeline management is essential for businesses aiming to maximize revenue and sustain growth. However, navigating the complexities of the sales pipeline can pose significant challenges. Let’s take a look at the three most common obstacles:

1. Inaccurate sales forecasting 

Sales forecasts are crucial for effectively allocating resources, planning strategies, and setting realistic revenue targets. When sales are forecasted inaccurately, it can lead to missed opportunities. This challenge has three catalysts: insufficient data analysis, reliance on outdated information, and inadequate communication between sales teams and management. 

To prevent this issue, organizations can invest in advanced analytics tools, implement regular pipeline reviews, and foster collaboration between sales representatives and decision-makers. Overall, this will improve the accuracy of sales forecasts and help your team make well-informed, strategic decisions.

2. Poor pipeline visibility

Limited sales pipeline visibility can hinder decision-making, impede performance tracking, and increase the potential for bottlenecks. This is usually caused by disjointed systems, inconsistent data entry practices, or ineffective reporting mechanisms.

To overcome poor pipeline visibility, organizations can implement integrated CRM systems to store and organize pertinent pipeline data, automate data entry processes, and establish standardized pipeline stages and criteria. Not only do these practices improve sales pipeline visibility, but they also enhance collaboration across teams and drive more efficient sales processes.

3. Lengthy sales cycles

Lengthy sales cycles present significant challenges, particularly for industries with complex buying processes or high-value transactions. Drawn-out sales cycles drain resources, delay revenue realization, and increase the risk of deal abandonment due to frustration. This typically arises due to factors like indecisive prospects, complex decision-making structures, or inadequate customer engagement. 

Organizations can mitigate this challenge by implementing targeted lead nurturing campaigns, leveraging sales enablement tools to provide valuable insights throughout the buyer’s journey, and optimizing sales processes for efficiency. This focus on building strong relationships, addressing customer pain points, and informed decision-making helps organizations accelerate their sales and boost their revenue.

How to review and clean up the sales pipeline?

Review

Running a sales pipeline review provides insights into the health of the pipeline and guides strategic decision-making. Using this analysis, sales teams can prioritize actions, allocate resources efficiently, and drive continuous improvement. To run a sales pipeline review, follow these steps:

1. Gather all relevant data, including deal status, progression, and potential bottlenecks.

2. Collaborate with key stakeholders, such as sales reps, managers, and executives.

3. Assess each opportunity by deal size, likelihood of closure, and timeline.

4. Analyze quantitative metrics like conversion rates, average deal size, and sales velocity.

5. Analyze qualitative metrics like customer feedback, competitive dynamics, and market trends.

6. Identify areas for improvement and address them proactively.

7. Adapt your sales strategies based on your pipeline review.

Cleanup

Cleaning up your sales pipeline is essential for keeping it relevant and effective while ensuring accurate sales forecasting. You should start by conducting a thorough audit of pipeline data and removing outdated, irrelevant, or duplicated entries. To do this, you must review every sales opportunity to verify its status, update information, and remove anything that no is no longer a viable prospect.

Next, segment your data based on criteria like lead source, stage of the sales cycle, or potential deal size. This helps your sales team prioritize their efforts and focus on high-value opportunities.

Once your pipeline has been cleaned up, establish guidelines for entering future information to maintain its integrity. Regularly reviewing and fine-tuning your sales pipeline not only improves data accuracy but also streamlines the sales process and enhances sales forecasting accuracy, ultimately driving more favorable outcomes.

Key aspects of sales pipeline management

Here are the 3 essential parts of all efficient sales pipeline management systems:

1. Sales pipeline velocity

Sales pipeline velocity is a metric that measures the speed at which opportunities move through the sales pipeline from initial contact to closure. It gives teams insights into the efficiency of sales processes and helps identify areas for improvement. 

To calculate pipeline velocity, multiply the average deal size by the win rate and then divide by the length of the sales cycle. A higher pipeline velocity means that deals are moving quickly, resulting in faster revenue generation and increased productivity. 

Tracking sales pipeline velocity over time allows sales teams to pinpoint bottlenecks, refine sales strategies, and optimize their processes to accelerate deal closure rates.

2. Sales pipeline analysis

Sales pipeline analysis involves examining various metrics and data points to gain insights into the performance of the sales process, identify areas for improvement, and make informed decisions. This analysis enables sales teams to assess the quantity and quality of opportunities at each stage of the pipeline, track conversion rates, analyze win rates, and identify potential bottlenecks or areas of inefficiency.

By understanding every aspect of their pipeline, businesses can make data-driven adjustments to their sales strategies, allocate resources more effectively, and ultimately drive higher revenue and growth. Additionally, sales pipeline analysis helps teams forecast future revenue with greater accuracy, providing valuable insights for budgeting, resource planning, and overall business strategy.

3. Sales pipeline visibility

Sales pipeline visibility refers to the clarity and accessibility of information about the status and progression of deals within a sales pipeline. Real-time visibility is essential because it helps sales teams better prioritize their efforts, allocate resources efficiently, and provide timely support to opportunities at various stages of the sales cycle. Enhanced pipeline visibility also cultivates collaboration by facilitating transparent communication and alignment on goals and strategies. Ultimately, sales pipeline visibility enables organizations to optimize their sales processes, drive performance, and achieve greater success.

Leveraging AI in sales pipeline management

Leveraging AI in sales pipeline management enables businesses to streamline their processes and improve efficiency. AI-powered tools can analyze vast amounts of data from various sources, including customer interactions, emails, and CRM systems, to provide valuable insights into the sales pipeline. These insights help teams identify trends, predict customer behaviors, and make data-driven decisions.

One application of AI in sales pipeline management is predictive analytics, which uses machine learning algorithms to forecast future sales performance and identify at-risk deals. It analyzes historical data to predict which leads are most likely to convert and which deals are likely to close so sales teams can prioritize their efforts. AI analytics can also flag potential risks or disruptions, allowing teams to address them proactively.

Additionally, AI excels at automating routine tasks and processes, freeing up valuable time for sales representatives to focus on building relationships with prospects and closing deals. You can use AI-powered chatbots and virtual assistants to speed up the sales pipeline process by having them answer initial inquiries, qualify leads, and provide personalized recommendations. Through automation and streamlining workflows, AI enables businesses to adapt to changing market conditions, anticipate customer needs, and stay ahead of the competition.

Sales pipeline management best practices

In sales pipeline management, adhering to best practices is essential for streamlining operations, optimizing pipelines, and boosting your bottom line. Keep the following best practices in mind:

1. Focus on the best leads

Prioritizing high-quality leads that are likely to convert helps sales teams allocate their time and resources effectively. Being able to do so leads to higher conversion rates and revenue. Recognizing when to disengage leads minimize wasted effort and prevents the pipeline from becoming clogged with unproductive opportunities. Overall, focusing your efforts fosters a healthier, more efficient sales pipeline.

2. Continually monitor key metrics

Regularly tracking key metrics like conversion rates, sales cycle length, and pipeline velocity helps businesses measure the effectiveness of their sales processes and identify areas for improvement. Not only does it allow sales teams to make data-driven decisions, but it also letsthem adapt strategies in real-time. Staying vigilant and proactive in monitoring key metrics ensures your pipeline remains agile, responsive, and aligned with your overarching goals and objectives.

3. Always looks to improve and & update pipeline processes

Customer needs and market trends are constantly evolving, meaning static sales processes will always fall short. By regularly seeking feedback from sales teams, analyzing performance data, and identifying areas for enhancement, you can optimize your processes to adapt to changing circumstances and maximize efficiency. Embracing a culture of continuous improvement cultivates innovation and agility, giving your business a competitive edge. 

4. Keep sales cycles short

Keeping your sales cycles short not only increases revenue but also enhances customer satisfaction and loyalty. Streamlining the buying process leads to reduced friction and unnecessary delays, increasing the likelihood of closing deals. Short sales cycles also help businesses capitalize on opportunities more rapidly, adapt to changing market conditions, and stay ahead of competitors.

5. Create standardized sales process

Standardizing sales processes ensures consistency and efficiency across the sales organization, enabling teams to operate more effectively and deliver a seamless experience to customers. Defining clear stages, criteria, and workflows for your sales processes can reduce ambiguity, minimize errors, and improve predictability in sales outcomes. They also make onboarding new team members easier because they provide a framework for training. 

6. Give more content to sales prospects

Giving sales prospects targeted, relevant content, such as whitepapers, case studies, and educational blogs, fosters engagement, educates prospects, and builds trust. It not only demonstrates your company’s expertise and credibility, but also addresses potential needs and concerns of customers during the buying journey. Proactively sharing content with customers.

7. Use an effective CRM software

An effective customer relationship management system (CRM) is a hub for storing, organizing, and tracking customer interactions, leads, and opportunities. Pipeline management CRM software captures data such as customer preferences, behaviors, and communication history to provide sales teams with valuable insights that can help them increase conversions and nurture relationships with prospects. They also streamline workflows and provide real-time data and analytics so sales teams can work more efficiently.

8. Use automation to your advantage

Sales teams can automate repetitive tasks like data entry, lead scoring, and email outreach to save time and focus on higher-level activities that require a human touch, such as prospecting and relationship building. It reduces the risk of human error, ensuring consistency and clarity in sales pipeline processes. Automation tools can also provide insights and alerts that notify sales professionals of critical actions or opportunities that require attention.

Creating a sales pipeline

The first step to creating a sales pipeline is to clearly identify the sales process that suits your business. In general, any sales process includes steps to:

• Identify and qualify prospects

• Assess their needs and present the solution

• Guide and convince them to buy

• Close the sale

• Follow-up (nurture the relationship)

When you break it down further, it is the sequence of steps that each salesperson would repeatedly take for every sale. Make a list of these steps and convert each step (or combine a few of them) as a stage in the pipeline.

1. Creating multiple sales pipelines

Certain businesses may have multiple sales processes based on geography (North America, Europe, etc.), team types (inside sales or field sales), size of the company (SMB, mid market, or enterprise) that you are after, or the different product/service plans you offer.

Managing all of them in a single pipeline is not feasible. With Freshworks CRM, you can create multiple sales pipelines with relevant stages for each pipeline. This means you can manage your business more efficiently.

Let’s say your business has a different sales process for the inside sales and field sales teams. You can create two pipelines, as shown below, to track and manage deals for each team.

2. Choosing a default pipeline

The most commonly used pipeline can be selected as a default pipeline. If you’re an admin, and you mark the ‘Field Sales’ pipeline as ‘default,’ it’ll be the default pipeline for all your users. This means all sales reps will look at the Field Sales pipeline when they log in. However, if you are a user on the Inside Sales team, you can select a different pipeline to be your personal default pipeline. This will not affect the admin’s choices in any way.

3. Manage your deal pipeline 

The sales pipeline lets you determine how close you are to winning each deal so that you can select the right deals and activities to focus on every month. Staying on top of your deals requires some sales effort—following up with customers over phone and email, setting appointments, creating tasks, etc.—to win sales opportunities. 

In Freshworks CRM, sales pipeline management works in tandem with time management. The color-coded icons in the pipeline view help you quickly identify and act on pending and delayed tasks.

4. Monitor your team’s pipeline

As a sales manager, you’d want to closely monitor your team’s performance. 

You can do this by using filters to create views based on the territories you manage and track how each salesperson in your team is performing. You can visually track how many new deals are there in each of their pipelines or how many are about to close. You can also monitor lost deals, identify the reason they were lost, and make changes accordingly.

With Reports and Dashboards, you can get a snapshot of your team’s performance or dive deep into the activities of every sales rep. Track revenue metrics and identify top performers with sales velocity and sales cycle reports. Remove bottlenecks by identifying which deal stages your salespeople get stuck in.

 You can also see how many days a deal has been in a particular stage. For instance, if a deal has been in negotiation for more than two weeks, you can add a follow-up task for your sales rep to act upon it right away. Create custom dashboards to get a quick glimpse of frequently used reports and schedule selected reports to be automatically sent to anyone in your company.

5. Use pipelines even after you seal the deal

Sales pipeline management in Freshworks CRM can also be used for a number of post-sale activities, such as project management, annual maintenance contracts, product installation and training, and more. Create a project management pipeline and simply funnel the won deals to this new pipeline using workflows.

Your account manager will have a complete context of all the projects they are working on and can manage each one of them right from the CRM. Once the project is complete, and if there are any maintenance activities requested, an AMC can also be initiated right from Freshworks CRM for the same account and managed in a new pipeline.

If you are in the tourism and travel industry, for example, you could maintain a separate pipeline for the customers who have bought travel packages from you. Create a post-sale pipeline to track if your customers have started using the travel bookings made and get their feedback. You can nurture these customers for repeat purchases and use their feedback to improve your travel packages.

These are just some of the common use cases for sales pipeline management in Freshworks CRM! Try creating multiple pipelines to manage your business more efficiently.