What Is a Sales Pipeline and Why Companies Use It
If you have any experience in sales, then you have probably heard of a sales pipeline. What is a sales pipeline and why does my company need it is also a question you might get from some in your organization. I was introduced to the concept of a sales pipeline over 15 years ago and after getting my feet wet by reading some books and watching some webinars. I was convinced, I needed to implement it with the company I was running.
On a very basic level a sales pipeline helps you organize your sales funnel into repeatable steps keeping your sales team focused and making sure they are always moving towards closing the sale. On a more advanced level you can find the leaks in your funnel, these become coaching opportunities and help you develop sales strategies to plug those leaks.
In this article we will look at all the positives that a good CRM pipeline can bring to your company and one of the weaknesses that are inherent with 3rd party pipeline management tools. Let’s take a deep dive into this.
Key Benefits of Using a CRM Pipeline
1. Preventing lost deals.
Like many companies that are growing with sales from multiple channels, deals come in from a lot of different directions. Emails, calls, events and in person visits; it makes it hard to keep track of them all. Most likely being tracked by spreadsheets, inboxes and the ever-unreliable salespersons head. It is said that a typical salesperson can handle about 100 to 120 accounts and less if you have warm leads or existing customers. If your company uses a 2,2,2 rule for sales (follow up 2 days after initial call, 2 weeks and 2 months) you are talking about thousands of touchpoints. You need a system that can handle the workload.
2. Creates revenue visibility
As with any SMB, you need to have a relatively good idea of what sales will look like for the coming you, budgets are build on these assumptions and if you are wildly off then you are scrambling to adjust. You can objectively look at the pipeline and figure out what kind of sales you will close in the near and mid term, might not be perfect but its better than plain guessing.
3. Predictable selling
With a good pipeline management system you can forecast monthly and quarterly sales easier, the average salesperson can close about 25 to 30% of their pipeline a month depending on your industry. This gives you an enormous insight for planning, inventory and cash flow, it also allows you to spot slowdowns quicker giving you ample time to adjust your forecasts and assumptions.
4. Standardize how sales are done
A good pipeline enforces a repeatable process for selling. Same stages, same expectations, same data captured. This really helps when evaluation your team but also helps onboarding a new salesperson faster.
5. Improve Sales rep focus
With a good pipeline tool your reps can see quickly what deals require attention, which are high value and should get extra attention and which are stalled and need some help, or be dropped and considered a lost sale. This leads to less waster effort and more time closing sales that can be won.
6. Enables Coaching and accountability
From a management point of view a good pipeline lets managers ID stuck deals and help coach your reps on why deals are stuck and where in the funnel reps are struggling and which stages lose the most opportunities. Find out where the leaks in your funnel are, you can see if sales are stalling at the pricing phase, the qualifying stage or is your rep not following up at the prescribed intervals. All of these things help your rep be successful in closing sales and managers an easy way to talk to reps about areas of improvement.
From Chaos to Predictable Growth
In the end a good sales pipeline management tool that is well crafted and tailored to your business can turn sales from chaos and guesswork into a structured, predictable growth engine.
Limitations of Traditional CRM Pipeline Tools
Now that I have set the table on why you need a sales pipeline tool, I am going to talk about some shortcomings that most tools have and why Versa Cloud ERPs pipeline tool makes the most sense for your company.
Why an ERP-Integrated Pipeline Works Better
Most pipeline tools have a lot of functionality and reporting to give you a smooth running sales machine, the biggest problem is most of these tools don’t integrate with ERP systems very nicely. Data either doesn’t sync up or doesn’t connect to the software at all.
What this means is double data entry for your sales reps, or even worse missing data because the rep doesn’t have time to put it in. This is where most pipelines fail, Data entry! Bad data in, bad data out. The same as it is for your ERP system, so having all data points and pipelines in one system eliminates isolated activity and becomes part of your entire business engine.
One System, One Source of Truth
This gives your company a single source of truth for data, pricing, products, order history, credit terms, etc.. It gives your team a faster hand off between sales, operations and finance, no more deals sitting on a reps desk waiting to be keyed in, no questions of where a deal is.
This leads to a better customer experience in the end, quotes are accurate, orders move quickly, invoices are right the first time and fewer follow ups are required post sale. In the end an integrated system eliminates some potential big gaps in process and gives you more visibility in the entire company.
If this sounds like something you want to try, drop our team an email and set up a demo and trial today.
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