Does every business need a sales pipeline?

Part of our Sales Untangled promise is to make business simple. So whenever this question gets asked we’re always willing to listen to why the questioner thinks their business can manage without one.

[Note: This is a topic where terminology varies. For the purpose of this article we’re using the terms sales funnel and sales pipeline interchangeably]

Is a sales pipeline tactical?

The background to this question is usually that someone is thinking of their sales funnel as a tactical report. It’s a means of monitoring the activity of sales people so that sales management can check up on what activity people are taking and what (or when) the likely results will show up.

Used like this, the sales pipeline is purely tactical and the conversations often end in disappointment.

It’s really just an internal tracker for figuring out whether you’ve nudged a prospect along your funnel and whether you really have confidence in eventually generating revenue from them.

It’s a small part – but only a teeny weeny part – of your customer journey. That gives you a more holistic understanding of how your customer interacts with you and your competitors in their decision-making.

Sales growth is everyone’s job

This is the underlying principle of building a sales culture. Again, this is something that is sometimes mistakenly viewed as tactical: To create a sales culture we need to train our sales people better and dial up the pressure on results.

A true sales culture means everyone understands how their role and their actions impact on the customer experience.

This means that every function or team has an interest in the sales pipeline. Demonstrating how it links back to success in every job is what brings it to life and delivers the bigger impact on results, which is explored below:

Marketing

There’s an obvious link between sales and marketing in building a winning sales pipeline.

In most organisations there’s been a robust debate at some point about lead conversion. Are disappointing results the outcome of poor sales people or the weak leads that were delivered through marketing?

Solopreneurs we speak with don’t have multiple teams to consider. But still they’ll often report to us that they tried lead gen campaigns or exhibitions and they “didn’t work”.

Understanding why the plan fell short is what drives better results next time.

Sales and marketing working jointly on a plan that identifies your ideal target customers – then backing it up with the tools and materials the sales team need to deliver – is how both areas can benefit from building a slick pipeline.

In some organisations this is referred to as a sales enablement process with a high level of automation driving effectiveness. In others it’s just simple good practice backed up with a spreadsheet.

The tools don’t matter. The alignment and focus does and everyone wins.

And make sure you build in feedback from any customer service or tech support calls you receive. If whoever answers these understands your sales pipeline you can nudge and influence to smooth the path of later sales conversations.

Finance and business reporting

This is the second function that has an obvious stake in a predictable sales funnel.

Having confidence in the strength of the pipeline is what allows finance teams (or the business owner) to predict month-end revenues and invest for the future.

It’s a critical output of the sales funnel.

Too often a sales person reports having a “great meeting” with a target customer leaving everyone wondering how much closer you are to striking a deal.

Having tight sales funnel criteria is crucial here. Do you understand the client’s budget, project start date and approval procedure? Who else is playing a part in the sign-off process?

If that great conversation is answering these questions then you’re nudging along the pipeline and improving your chances of a deal.

Production and supply chain

Not every business is manufacturing “stuff” but if you’re selling physical items of any sort then it almost goes without saying that a predictable sales pipeline is critical in production planning.

But it works the other way too of course. Few things upset a customer more than agreeing to a deal only to be told the company can’t deliver.

Sales people are then tempted to manipulate the sales funnel to ensure their deals are ringfenced. If you have no confidence in supply then it’s tempting to exaggerate potential deals just to cover yourself.

The supply chain then complains that they can’t produce to forecast because of the risk of waste. It’s a dangerous downward spiral.

While services businesses aren’t building things, you might have people like designers, tech support or consultants who can also help in qualifying a sales pipeline. This helps with resource allocation and utilisation.

Working with the client they can identify ways to accelerate a sale or mine new business opportunities that strengthen your sales funnel.

HR and training

There’s not such an obvious connection between your people strategy and your sales pipeline but a predictable sales funnel helps you understand how your sales activities tie to your headcount.

If you want 50 new customers that might need 100 quotes, 500 customer meetings and a lot of marketing materials and messaging.

Applying your sales funnel in reverse like this gives you a resource plan that is lined up with your target sales number.

Targeted improvements in how your sales funnel is working help you figure out not just how many people you need, but what level they are and what skills you need to build on.

For instance, if your conversion rate for proposals is out of kilter with other sales funnel stages, or to benchmarks in your sector, that can help identify where to put your attention for sales tools, sales skills development and coaching support.

This all helps your sales people improve their own performance and keeps them focused on what’s most important: Helping customers.

Why your sales pipeline is strategically important

When you consider all these impacts you can see how important your sales pipeline is. If you use it as a strategic tool it helps you line up people and activities around your sales team.

That drives better customer service and is the foundation of a true customer culture.

Not only does that excite customers but it motivates your own teams, everyone being able to see the difference they can make on sales success.

Are you struggling to untangle the complexities of your sales process?

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