Complete Guide to Sales Pipeline Management for MSP
Whether your business is selling a tangible product, a service, or other solutions, one of the most vital elements that you should nurture is your sales pipeline. Developing a significant pipeline is a lifeline for the growth and health of every MSP.
Your sales process can quickly become ineffective and chaotic without a suitable pipeline management system. With an optimized pipeline, you can progress your prospects through every stage of the sales process and close deals effortlessly.
In this guide, we'll show you how to master MSP sales pipeline management.
What is Sales Pipeline Management?
A sales pipeline is a graphic illustration of the sales process, divided into stages, that the prospects go through before turning into customers or clients. It's designed to help the sales team organize and manage the leads and track their progress.
A typical sales pipeline comprises stages like "prospecting," "qualifying," "proposal," and "closing." As prospects progress through each step, the sales team can tailor their communication to boost the chances of converting them into clients. This helps the sales teams to streamline their process, identify obstacles on time, and close more deals efficiently.
Every prospect moves at a different pace through the pipeline based on their interest, urgency, or prior research. Hence, keeping a firm grasp of the sales pipeline is crucial to managing the lead's progress and behavior. With effective sales pipeline management, you can make informed decisions about the actions to be taken at each point in the sales cycle.
Why is Sales Pipeline Management critical?
According to a study by Harvard Business Review, businesses with organized sales pipeline management saw 28% growth compared to those that didn't. Studying past trends and staying abreast will help you with forecasts for solid strategies to close any loopholes. By mapping out your methods step-by-step, you can use sales pipeline management to analyze and boost your sales process.
Here are 5 reasons why practicing sales pipeline management can help you take your business sales to the next level:
1. Improved Sales Process
Solid sales pipeline management helps your team to concentrate on quality leads that result in higher-value sales opportunities. It also lets you track progress at each stage, allowing the sales teams to identify bottlenecks in their process and make necessary improvements. Both these aspects lead to more incredible company growth.
2. Better Sales Forecasting
An efficient sales pipeline management helps your forecasting efforts, providing a perfect picture of the number and stage of deals in progress. When you are aware of your prospects and their stages, you already know your next steps. With this info, you will know when and how to follow up to turn the prospect into a customer, allowing for more accurate revenue forecasting. Similarly, you will also recognize which prospect has minimal to no chance of turning into your customer.
3. Higher Sales Velocity
When the length of your sales cycle is minimized, you can close deals faster. This allows your sales team more time to engage and build relationships with other prospects, which is extremely important in B2B sales, where the sales cycle is longer.
4. Increased Efficiency
The sales team can prioritize key leads and direct their efforts to convert them into customers, as they clearly understand where prospects are in the sales process. Focusing on the right prospects at the right time increases the chance of closing deals and achieving your targets.
5. Measure the Target Achievement Gap
The term target is an inseparable part of the sales process. However, achieving the set target is not an easy task. Suppose you have a list of 10 prospects and need 4 more deal closures; you can review the prospects list and follow up with the most relevant ones to convert them. A well-organized sales pipeline management helps you measure your target achievement gap.
How to Manage Your Sales Pipeline better?
While your sales pipeline management depends on your processes, here are some tips we recommend following:
1. Use a Dedicated CRM
Managing all your deals without a proper system is a nightmare whether you are a new or established MSP business. With a sales pipeline full of leads, all in different stages of the process, you must ensure you're managing it effectively. According to research, about a third of all sales tasks can be automated.
Building your sales pipeline in a spreadsheet may work for small teams. But, as your business grows, you need to consider using a CRM system to boost your productivity, organize data automatically, and track all your sales activities. A dedicated CRM software has become an integral part of sales, without which it will be challenging to manage your sales pipeline properly.
A CRM that automates all the sales processes brings much relief and value to your work. The tools help you manage your prospects, deals, automated workflow, and sales follow-up. This means more time for selling to your sales team and a much simpler sales process for your business.
Zomentum's features and integrations improve sales pipelines for MSPs and help sales teams manage them better by automating the sales process workflows and creating sales proposals with a few clicks.
Talk to our team to learn how we can help you grow your sales pipeline.
2. Build a Comprehensive Customer Database
No matter how vast your customer list is, you're wasting your time if it's incomplete and outdated. Fix a regular schedule for updating your database to ensure the quality of the consumers included in the list.
Company names, contact persons' roles, and data are the most vital information you need to acquire and constantly update. Managing your sales pipeline and generating new prospects will be quicker and easier if you connect with the right person and send messages to working email addresses.
3. Build and Maintain a Defined Sales Process
You must develop and maintain a compilation of repeatable steps your team can apply to push leads through the pipeline and convert them into content customers. A well-defined sales process will help your reps understand what needs to happen in each pipeline stage to avoid holdups.
For instance, your process must be modified for a market or product change. There may be changes in how people discover or interact with your business or the customer journey shifts. In these cases, you must fine-tune your sales pipeline stages based on current market conditions to ensure revenue growth.
Ensure that they always revolve around these key pipeline stages:
4. Review Pipelines Frequently
The sales pipeline management process involves a lot of stages. So, along with following the process, you need to review your pipelines frequently. Doing so ensures there is no buildup of deals at any specific stage, and you can reach your target with minimal effort. Here are a few ways pipeline reviews can help:
- Investigate at what stage deals are clogging. More deals at a certain stage mean there is an issue in your process. For instance, if the block is in the presentation stage and lesser deals are going through negotiation, then your presentation part needs changes, or you need more people to work on it.
- Examine the time taken for every stage in your sales process; this will help you detect what is slowing the process down.
- Evaluate the sales performance as a team and individually. Doing so directly leads you to individuals who need appreciation or training.
5. Choose Relevant Sales Metrics
Using key sales metrics allows you to keep an eye on your pipeline's performance. Ideally, you should be able to generate figures for your process as a whole and for every sales stage separately. You can account for all your pipelines with the appropriate practice of sales pipeline management metrics.
These metrics provide the statistics to track your performance and enhance your sales pipeline growth.
- Number of deals: Identifying the number of qualified opportunities in your pipeline at any time and at what stage they are enables you to determine the health of your sales process.
- Value of deals: Calculating the total value of all the deals in your pipeline will provide insight into your potential revenue and verify whether you're on the right track to meet your sales targets.
- Deal size: Dividing the total value of the deals by the number of deals in your pipeline will help you realize the average size of your sales contracts. This can help you determine how many deals you require to meet your sales targets.
- Deal close rate: Understanding the average percentage of active deals closed by your sales team helps you identify training necessities and estimate monthly, quarterly, and annual income.
- Sales velocity: Your sales velocity is the time taken, on average, to turn qualified leads into consumers. Knowing how long a deal stays in your pipeline before it closes indicates at which stage your sales process needs improvements.
6. Establish Clear Deal stages with a Probability Percentage
Deal stages are not a "one size fits all" kind of thing. The significant aspect of an ideal deal stage is the one that aligns with your MSP and its sales process; the parameters are up to you.
It is essential that you align them to a probability percentage, whatever your deal stages are in. Doing so lets you forecast and understand what's in your sales pipeline and what you're likely to win.
Here's a rough example of aligning your deal stages with a probability percentage:
7. Define Criteria for Every Stage of the Pipeline
Your prospects go through several stages in the sales cycle process before turning into your customers. Similarly, your business strategies differ from one stage to another. For example, your approach while qualifying the leads and following up with your prospects is different.
While practicing sales pipeline management, you must set a specific criterion to identify the potentiality of your prospect. This will help you categorize your prospects and pinpoint which ones will become your consumers and which can be re-approached later. This process enables you to achieve the leads and ensures you don't miss any potential prospects.
8. Keep your Close Dates Updated
For a sales pipeline to work effectively, it's crucial to manage your team and the actions taking place inside your sales pipeline. And for this, you need to generate data-backed forecasts.
By tracking your entire sales process, you can take specific data into account, like your product cost, what you spend per lead, the potential market, and any upcoming fluxes in price.
Proper forecasting also lets you know the chance of winning the deal and your next step to close it finally. With a sound CRM system, precise deal stages, likelihoods, and close dates, you can see how much revenue will land and when.
This is important because, in an MSP, your sales are often driven by your capability to deliver the work, which relies on your internal resourcing. With a proper sales pipeline, you can forecast the resourcing you require to deliver projects, allowing you to plan things like recruitment and avoid costly budget blowouts.
Sales pipeline management is crucial for ensuring good client experience and managing your resources and spending. It is always favorable and easier to have all the processes in one place from start to finish, from sending proposals to taking payments to closing deals.
Managing an MSP sales pipeline is a continuous process. Hence, a clearly defined and well-managed sales pipeline is crucial to maximize sales performance and achieve business growth. MSP businesses can boost efficiency, improve customer relationships, and drive revenue growth by applying best practices at every sales pipeline stage.
While this is easier said than done and won't happen instantly!
You should constantly work on improving your sales pipeline to reap the benefits of a streamlined and effective sales process.
Looking for ways to improve your MSP sales pipeline management?