How many new customers can you handle a month if you knew you could measure and increase your sales pipeline velocity? Get your sales pipeline flowing at new levels and you’re on your way to getting what you can handle and want.
This article will teach you how to measure and accelerate your sales pipeline velocity. If you want to grow your business and improve cash flow, you need to know how to get better marketing and sales results. Check out my white board video sales training session and model your sales pipeline after what you see in this article or in the video.
What’s your #1 goal for your business right now? If it includes firing up your sales machine and getting better sales results, here’s how to understand, measure and accelerate your sales pipeline velocity.
Sales Pipeline Velocity Defined
What is sales pipeline velocity? And why is it so important, especially for emerging company owners, sales and marketing leaders? Because knowing your sales pipeline velocity means you have a disciplined sales process, sales pipeline stages, a customer relationship management (CRM) and/or marketing automation platform to support your most important investment; finding and winning new customers and cash flow.
Velocity – the speed of something (your sales pipeline) in a given direction …
Sales Pipeline or Funnel?
If you watch enough of my videos you’ll notice I love sales funnels. To me, they’r metaphoric for the essential practice of finding and winning enough customers to achieve your business goals. So, is there a difference between a sales pipeline and a sales funnel? Yes, and it’s a matter of your perspective.
Most sales organizations don’t close 100% of their deals. But they do a great job of measuring results at each stage of the sales pipeline. Now, if you’re a big oil company and you own and operate oil pipelines, do you see the pipelines get smaller as the oil gets to the end of the line? No. That’s because the money guys at the oil companies want as close to 100% of their oil to push through the entire pipeline.
But you’re probably not in the oil business. And your sales force probably doesn’t close 100% of the deals they get a shot at closing. If they do, maybe you should raise your prices.
I prefer five stages in the sales pipelines I build. Simple is better. Heck, if you only want three, use these stages …
- Attract – You capture the attention and interest of a prospect.
- Engage – You being the conversation and move the prospect closer to decision.
- Convert – You win or lose the deal.
Now, if you want five stages, use something like this …
- Initial Interest – You get them interested.
- Engagement 1 – You begin the buyer-seller dance.
- Engagement 2 – The dance continues.
- Pitch, Propose, Present – You do your magic.
- Win or Lose – You win or lose the deal.
Sales Pipeline Velocity
How much money moves through your sales pipeline every day? This is what knowing your sales pipeline velocity will tell you. Let’s take a look at one example.
- Number of deals in sales pipeline: 100 (Round number.)
- Average win rate (Close): 50% (Rock stars.)
- Average value of customer: $10,000 (Bigger ticket.)
- 50 new deals @ $10,000 = $500,000 (Great job!)
- Average number of days to close a deal: 20 days (Speedy.)
- $500,000/20 days = $25,000 a day. (Serious cash flow in your pipeline!)
Sales Pipeline Velocity Killers
If your business or career is your “best investment” providing you regular income and the potential to create some serious, long-term wealth, why would you want to wing it on maximizing your sales pipeline velocity, marketing ROI, technology or any other investment you would make in growing your business?
There are many sales pipeline velocity killers. Be vigilant and disciplined about your sales pipeline, or suffer the consequences and get your lunch eaten by the competition.
One of the biggest killers is lacking proper systems that support your team and sales pipeline velocity. For example, customer management relationship software is essential for managing people such as customers, prospects, vendors, referrals partners, employees and anyone else crucial to your success.
Another pipeline killer is unqualified people coaching, managing and leading the sales organization. Ever meet a small business owner who was really lousy at managing sales people, had massive sales turnover, but couldn’t understand why? I see this all the time. Another major sales management blunder is promoting your top dog into the sales manager roles. A great sales pro makes not a great sales manager. These roles require different skill sets, and when there’s alignment better sales management and sales producers, you get flow; cash flow.
Last, be aware of how you hire, pay, coach and fire your sales people. If you follow the guidelines I’ve laid out in this article, and you focus on hiring the best sales talent your money can buy, and empowering your people with the strategy, plan and tools they need to get the job done, you and your people will see the results in your sales pipeline velocity.
Build A Better Pipeline Velocity
In closing, if you want to grow your business, focus on increasing the volume and velocity of your sales pipeline. The best way to do this is develop a solid strategy and plan of action, get the right people to help you, use the sales and marketing systems that work best for you, and be relentless when it comes to increasing sales activities and focus. Measure results as you go, learn and adapt as you grow.
Got a question or comment about taking your sales pipeline velocity to the next level? I always appreciate your comments and questions here on the blog.