“You miss 100% of the shots you don’t take.” – Wayne Gretzky
Key to succeeding in business is being out there. Think about when you started your business and took those first tentative steps to go it alone. One of the earliest things you had to do was announce to family, friends and maybe even your employer that you were starting a new business. If you were leaving regular employment this probably stirred up feelings of excitement, passion, fear, challenge, inspiration and many more.
One of the other important factors in business growth and success is having a solid sales strategy combined with using a sales pipeline to monitor your sales activity. Both of these link together really well as your sales strategy will help you plan your future while your sales pipeline will help you see how you are going to get there. Follow my tips below to use your sales pipeline to build your sales activity.
Top tip #1: Have a healthy pipeline.
Your sales pipeline has to work for you and help with your sales activity not just there for presentation purposes. You may have seen lots of images of sales pipelines over time, for example:
– wide at the top and thin at the bottom
– wide at the top and middle and thin at the bottom
– thin at the top, middle and bottom.
I’m really happy to share SPANCOP otherwise known as pipeline management, created whilst working for Shell for over 23 years.
As a small business owner or solopreneur your time is valuable as you are responsible for most functions in your business. It’s important to have lots of suspects that can be converted into prospects. Ideally, you want both of these sections in your sales pipeline to be wide. A healthy sales pipeline would have lots of suspects but likewise lots of prospects as you work on getting good quality leads from referrals, networking, exhibitions, meetings, calls, social media, website landing pages and advertising.
Top tip #2: Filter out unqualified leads.
Having a healthy pipeline will include lots of suspects and naturally not all of these will become prospects.
“Every sale has five basic obstacles: no need, no money, no hurry, no desire, no trust.” – Zig Ziglar
Naturally some suspects won’t fit the criteria to become a sales prospect and to really focus your sales activity to work for your small business it means making the difficult decision to close contact with a suspect. This can be tough after spending time building rapport, but it doesn’t have to be goodbye. You can schedule a time in your calendar to contact them again in the future to see if they now have the budget or need of your product; remember to include your post-call report so you can show your professionalism by referencing important information from your previous conversations.
Top tip #3: Follow up with prospects.
Did you know that it takes 18 calls to connect with a buyer? This highlights the importance of spending your sales time contacting your prospects to close the deal. Leads can easily slip into cold leads if you don’t remain in contact with them, even at a very early stage in the sales pipeline. One study by Harvard Business Review shows that responding to leads within 1 hour will make them 60 times more likely to be potential customers than those companies that wait 24 hours or longer to respond. So, every time you get a lead from your website landing page make sure you get in touch with them within 60 minutes to keep their attention and interest. Don’t forget this can be automated with MailChimp.
Top tip #4: Monitor the sales velocity of your prospects.
Knowing and understanding how to work out your sales velocity is an important metric to help move your business growth forward. In the sales velocity equation O is for number of opportunities, D is for average deal size, C is for close rate and L is pipeline length.
Velocity = (O x D x C)/L
For example, sales velocity: (20 x .25 x 1000)/60 5,000/60 83.33
So, on average you are bringing in £83.33 revenue each day. Keep this data relevant by repeating the calculation regularly. Use this data to either shorten the amount of time it takes for a prospect to go from suspect to closing a deal or increase the average deal size, or both. If prospects are taking too long to get to the stage where you close the deal with them then remember to check your sales pipeline is healthy. Are there any bottlenecks? Where are they? Can you automate some of the process using software?
Top tip #5: Monitor the churn rate of your prospects.
You might hear this referred to as close rate or more commonly as churn rate. Knowing your churn rate is useful in setting sales targets. By knowing what you are losing you know what you have to sell in terms of both volume and value to hit your annual revenue turnover. It’s really easy to work out:
Churn Rate = (Customers who left/Customers at the start of the month)x 100
For example, churn rate: 5/25 x 100 = 20% churn rate
Top tip #6: Spend time keeping your pipeline updated.
Finding the time to update your pipeline can be difficult so for this reason I recommend putting it in your schedule as often as needed. Your sales pipeline can quickly become cluttered as you lose unqualified leads, close deals with prospects and begin to negotiate with other prospects. Every prospect has their own speed of moving through the sales pipeline, but you can help yourself by knowing where everyone is at any time just by looking at your sales pipeline. One of the easiest ways to do this is to invest in customer relationship management (CRM) software. There are some great versions available for free and HubSpot is as good a place as any to start. By keeping your CRM updated you will be able to see what you need to focus on in any sales period.
Our innovative Sales Growth Club is designed with the small business in mind. It is there to guide you, in a structured way, to make sales a key part of your business strategy and to build an effective sales plan. Find out more today, it’s the best small business sales programme around!