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Pipeline Management Puts Focus on Profitability
Blog / Sales Management / May 22, 2013 / Posted by Nikolaus Kimla /

Pipeline Management Puts Focus on Profitability

Exactly isolating your sales process—the precise steps taken by your sales reps from prospect to close—is crucial to your company’s operation, and represents the foundation for pipeline management. But once you have done so, how can you then use that data to focus sales attention and predict future sales? This is the essence of utilizing the stages of your sales process.

Sales Pipeline Management - VisualisedPipeline Management

The sales process represents the foundation of what is referred to as the “sales pipeline”. Sales process defines the individual stages of a sales cycle. Focusing on each of the stages, as you work your opportunities through the sales pipeline, helps prioritize and predict sales, both for salespeople and for sales management, and is part and parcel of pipeline management.

When a prospect comes in the door (literally or, in this day of cybercommerce, figuratively), that prospect is usually qualified in some way as regards the likelihood and value of that potential sale. Answering such questions as Where did this person or company hear about us?, What precisely are they looking for in our product or service?, What industry did they come from? And How much purchasing influence does this person have inside the buying organization in their company? Allows a rating to be assigned to that prospect, right at the beginning.

As that prospect moves down the sales pipeline, each stage should have its profitability so marked. For example, if the next stage of the sales pipeline is downloading and running of trialware, what was the prospect’s response afterward? Did they feel your product fit their needs? Were they enthusiastic enough to initiate a purchase—or do others in the company need to evaluate it first? These types of questions answered would allow an evaluation to be added at that stage.

Of course each of these evaluations relates to profitability of that particular sale. How quickly can the sale be made with the least amount of time and effort invested? How large will that sale be? How long will we have to wait for payment? What is the potential for future sales to that customer?

Standardizing Ratings

As these ratings are developed, they should be standardized so that everyone is using the same system, not simply taking wild (or overly optimistic) guesses as to how profitable sales will be. As much as possible, they should reflect the realities of situations, based on solid sales experience in the history of that company.

The Broader View

Once such a rating system is in place, sales control—both by sales reps and management—takes a considerable step up.

Using such a rating system, a salesperson can then take a step back and ask, “What’s going on in my sales pipeline?” Does the salesperson have enough prospects coming in to make for an adequate number of closes by the end of the month? Are there sales there that are stuck, and for which the salesperson should obtain a tag? And of course this rating system means far better utilization of the salesperson’s time—he or she knows who is most important to contact that day.

Utilizing a view of the pipeline, these kinds of questions can also be answered by sales managers and executives. An executive can view closing ratios of various sales reps, and see who is doing a great job and who might need help. It also opens the door to better and more assistive pipeline management—for example, a jump up in closes is observed, so what caused it? Better get over there and find out so it can be reinforced!

Sales Process Analysis

The most important aspect of pipeline management, however, is analysis. This kind of data summarized means that far more accurate sales pipeline forecasts can actually be made. Such forecasts can even take into account what kinds of opportunities are in which sales pipeline—which deals are more likely to close, simply because they’re assigned to better closers?

Marketing analyses can also be more precisely done. Of the leads that are closing, where are the majority coming from? What are these prospects responding to? What kinds of marketing collateral could be used to push the sales along quicker?

Proper pipeline management means far better utilization of time and resources, and finer and more accurate prediction of sales.

About Author

CEO and partner of pipelinersales.com and the uptime ITechnologies, which I founded in 1994 and has since played a significant role in the development of the IT-environment. pipeliner is the most innovative sales CRM management solution on the market. Pipeliner was designed by sales professionals for sales professionals and helps close the gap between the requirements of C-level executives for transparency and the day-to-day operational needs of field and inside sales. I am also the founder and Initiator of the independent economic platform GO-AHEAD!, which orientates itself on the principles of a free marketplace in terms of liberal and social responsibility. Connecting people, the trust of business leadership in terms of values such as freedom, self-responsibility, and entrepreneurial spirit, and strengthening their awareness in order to create a dynamic boost within the economy triggered through spontaneity, all stand for the initial ideas surrounding GO-AHEAD! I studied in Los Angeles and Vienna and received my Masters's Degree in 1994. I am married and have 3 children My Specialties are in: Sales Management, Sales CRM Software, CRM Cloud Solutions, SAAS, Business Strategy, Software Development, "Pipeline Management", Social responsibility, outbound sales, b2b sales, inside sales, sales strategy, lead generation, sales process, entrepreneurship, coaching, mentoring, speaker, opportunity management, lead management, Austrian School of Economics

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