DigiBiz Consulting

Day: June 13, 2017

sales pipeline is a kind of visual representation of the various stages needed to convert potential customers into a client. The status indicates their (potential customers’) respective position in the pipeline thereby enabling an individual salesperson or a company to forecast the amount of sales that can take place in a given time period. A sales pipeline ascertains whether or not the process of sales is following the right steps. A well designed sales pipeline often determines long-term success of a firm starting from proper lead generation to maintaining a loyal customer base.

A sales pipeline essentially also diagrammatically describes the process of selling. It encompasses all the necessary steps which are needed to be taken in order to complete a sales process and also ensure long term customer loyalty. It vividly describes the entire journey taken by a salesperson starting from the process of acquiring the information about the potential customer, making the initial contact, qualifying the prospect as a lead and then further qualifying the lead as a prospective customer and then finally closing the deal and providing the customer a post-sale service. This entire process is represented by a sales pipeline.

Stages of a Sales Pipeline

There are seven broad stages which need to be followed for implementing a sales pipeline. If you are an individual salesperson or a company, you can follow these seven steps to ensure long term sustainability of your selling process.

The following are the seven essential stages of a sales pipeline:

  • Lead Generation
  • Nurturing of Leads
  • Marketing Qualified Leads
  • Sales Accepted Leads
  • Sales Qualified Leads
  • Closing the Deal
  • Providing Post-Sale Service

Lead Generation

The first step of a sales pipeline is lead generation. Following a mix of marketing strategies like email marketing campaigns, organizing events and sharing web content, the company can generate considerable amount of leads for their product or service.

The first step of the sales pipeline is very essential as the company needs to accumulate as many leads as possible to ensure the success of the following stages.

Lead Nurturing

Lead nurturing is the second stage of a sales pipeline. A company can qualify the leads, generated in the first round, even further by means of marketing automation tools. This helps them to obtain the list of quality leads.

Lead nurturing is a very effective and efficient technique as it not only ensures more accuracy in the entire selling process but at the same time it also makes sure that the company does not waste money after pursuing the wrong leads.

Marketing Qualified Lead

The leads which are more likely to become a customer are filtered out by the process of lead nurturing. With the help of marketing analysis the Market Qualified Leads are being filtered.

Ideally these leads are the ones which are perceived to be more important than the others. The marketing department of the company needs to consider these leads as the base of any further marketing process.

Sales Accepted Leads

The Market Qualified Leads are further filtered by means of matching the key targeting criteria in order to obtain the Sales Accepted Leads. Initially after filtering the information on the basis of parameters like demographics and occupation, in this stage the leads are further classified based on various socio-economic and psychographic segmentations.

The Sales Accepted Leads have verified propensity or intent of making the final purchase. This is in fact is the last stage of lead filtration, done from the strategic marketing perspective, till it is given to the sales rep, who on their part, further classifies the data according to their knowledge and understanding.

Sales Qualified Leads

The sales representatives then further analyses the leads and then delegates them to a dedicated account manager. Sales Qualified Leads are quantifiable sales opportunities. The leads have specific and clarified needs that they have mentioned. There is also a specific timeline and budget associated with this list.

These are the list of leads that have already made viable purchase decision. These are the list of people who are almost ready to make the final purchase of the product or the service. This is the step where the lead gets transformed into a prospective customer.

Closing the Deal

The deal is closed when finally the lead or the account which is being targeted, completes the purchase within the specific time period. Closing a deal, also essentially indicates the conversion of a lead into revenue for the firm.

The salesperson or the company must ensure timely delivery and implementation of the product or the service at the desired location of the purchaser. This is the step where the prospective customer gets transformed into an actual client for the company.

According to the fundamentals of the concept of sales pipeline, the revenue generated from the sales should be attributed in order to make the sales campaigns better and stronger. The target of the new campaign should involve more lead generation and conversions.

Providing Post-Sales Service

The steps of a sales pipeline does not end after closing the sales deal. Post-sales service is also critical in ensuring long-term loyalty of the customers. Continuing the engagement with the client often results in more sales in the form of referrals and repeat purchases.

This is a very critical aspect of the concept of sales pipeline. Post-sale services do not guarantee instant profit for the firm but in the long run it helps the firm to make more profits.

Loyal customers are more likely to contribute to the revenue of the firm by making additional purchases or referring the services or the product to other potential customers. So, old clients can also be a good source of quality lead generation for the firm.

Sales pipeline follows systematic steps of generating leads and transforming them into customers for the company. Starting from lead generation to providing post-sales services, every step of the pipeline is critical for the success of the selling process. A successful sales pipeline will help the company convert its best customers into consultants who will provide them with further leads.

Back to Digital Sales and Marketing Processes

In some businesses, marketing and sales are two separate departments, and in such companies the sales funnel is separate from the marketing funnel. For optimum sales, the two must work in harmony. In small online businesses, there is no distinction between the two but rather there is one longer funnel. There is no one answer as to what stages each funnel has, and even the terminology differs from writer to writer.

The Marketing Funnel

The role of marketing is to research their market, to know who their target market is and to bring as many people into the funnel as possible. They then use a marketing funnel which consists of the stages: awareness, consideration, preference, and action. The marketing funnel tracks the steps that prospective buyers move through before they make a buying decision (1). As prospects move through the marketing funnel, the marketing team captures certain statistics e.g. number of visitors, number of clicks, conversion rate, etc. which they use to take action and to refine their marketing strategies. From what the prospects do, the marketing team knows whether to send more information or to make a follow-up call (1). So here is how the marketing team uses the marketing funnel.

  1. Awareness – They create brand and product awareness to stimulate interest in the product, using various means, like paid advertising, blog posting, public relations, free seminars, free webinars and social media.
  2. Consideration – Interested people will click the given link to visit the website. They read the sales letter which provides intrigue (by sharing product benefits) and incentives (free downloads or free e-courses or free coaching session) and persuades them to take action.
  3. Preference – Some people will leave and move on but others will compare the product to similar products and they will show interest by staying longer on the website or by revisiting.
  4. Action – In the online world, the required action is to provide contact information in order to get the free gifts. Of those who opt-in, few will purchase right away. The rest will need further sales effort before they can buy.

As soon as the people share their contact information they leave the marketing funnel and enter the sales funnel and they become sales prospects (2). In a large organization they are literally handed over. So why is it called a funnel? Naturally, many targeted people will see the information or the ad, less will spend time on it to explore and consider the product, and even less will take action. The numbers narrow down like a funnel.

The Sales Funnel

The people who opt-in will not necessarily purchase straight away. Most will need more persuasion before they buy (3), which is why most online marketers use email newsletters through autoresponders.

  1. Value provision – The sales function of the business uses regular newsletters to provide valuable information that the prospect can use but not enough to do without the product. While sharing the valuable information, the sales team provides more information about the product, e.g. its benefits and how it beats the competitors.
  2. Decision phase – Those prospects who are interested in the product will evaluate the product more and compare it with similar products in order to make a decision. This action is captured by the system.
  3. Action – Eventually some of the prospects will buy. Of the total prospects captured at the end of the marketing funnel, a smaller number will eventually buy.
  4. Loyalty – The sales team can add a loyalty stage in order to get repeat business or to generate referrals.
  5. Repurchase or Upsell – The sales team can then upsell a more expensive product or manage to get the person to keep buying the old product.

The Sales and Marketing Funnel for Small Online Business

For the small online business, there is no separation between the sales funnel and the marketing funnel. The sales and marketing funnel can look like this:

  1. Awareness – in which the targeted person becomes aware of the product through an ad or blog etc.
  2. Consideration/preference – Some people take an interest, check out the product, research the product, etc.
  3. Action phase – They opt-in to download the free gift and to find out more about the product.
  4. Value provision stage – the business owner sends a series of email newsletters with valuable information or a free course.
  5. Decision phase– interested prospects keep evaluating the product through the email newsletters till they decide whether to buy or not to buy.
  6. Action phase – Some of the prospects buy the product.
  7. Loyalty phase – Loyalty of the buyers is maintained in various ways to keep the buyer interested so that they can buy again. Satisfied customers are the best advocates as they talk about the products on social media.
  8. Repurchase or Upsell – The business can upsell more expensive products, e.g. a premium product or an advanced course.

The marketing funnel and the sales funnel are different in a large organisation, but in a small business it is just one funnel, the sales and marketing funnel. In the sales and marketing funnel, it is common for a person to jump from stage 1 to stage 3 and stage 6 in one day if they have been looking for the product already. In fact this is what is taking place these days as people search the internet when they want certain products (1). But for those who only become aware of the product because of the awareness campaign, it takes longer to make the buying decision. That is why they need more persuasion while doing their research on the side or while getting ready to buy the product. All the same, from the beginning when many people see the information about a product to the time they buy, the numbers keep dwindling. It is common for the sales rate to be 1% of the original number who clicked on the ad.

— End

Back to Digital Marketing Processes

DigiBizConsulting offers the best consulting advice on starting a new digital business and addressing all the areas of running a new digital business.