The primary goal of every service-based business is to nurture qualified leads into recurring customers of their professional services. From HVAC and plumbing to pool service and property painting, developing a healthy sales pipeline for your service-based business is an excellent way to achieve your sales goals and encourage lead generation for years to come.
Keep reading to learn more about what exactly a sales pipeline is, how it can benefit your service business conversion rate, and the sales pipeline management steps you can take to successfully build and maintain a sales cycle.
What is a Sales Pipeline?
A sales pipeline includes the number of potential customers currently undergoing the various different stages of the buying process for products or services. This buying process often begins with a potential customer responding to sales outreach, such as cold emailing or promotional messaging, and ends in the success of a company sale.
With the use of sales pipelines, a sales rep can better visualize where company revenue, sales targets, and all other sales efforts stand at any given time. This strong visibility is extremely important, as the sales process can become overwhelming when juggling multiple leads, which can quickly become prone to error and lead to missed revenue.
Most sales pipelines progress from sales prospecting, to lead qualification, to the negotiation stage, and ultimately, a sale. However, the different offerings of each service-based company may create different needs for the company’s sales pipeline efforts. Understanding the correct steps to establish your sales pipeline and how sales pipelines compare to other sales tools will allow you to better mold sales efforts to your company’s specific needs.
Sales Pipeline vs. Sales Forecast
Prior to developing a sales pipeline, it’s important to understand how this sales tool compares to others and how the key differences impact your sales velocity. Often confused with a sales pipeline, a sales forecast is instead a calculated estimate regarding the number of deals that are expected to close over a set period of time.
Unlike sales pipelines that provide a complete view of the sales cycle, a sales forecast provides sales managers and sales reps with a comprehensive look into how close they are reaching sales goals, which can be further used to better prepare for future goals.
Sales Pipeline vs. Sales Funnel
In addition to sales forecasts, the term sales funnel is also commonly confused with a sales pipeline. Both sales funnel and sales forecasts should be generally viewed more as components of a sales pipeline instead of as separate entities.
A sales funnel is a visual representation of the journey potential customers take as they navigate through the different stages of the buying process for products or services. These stages help tailor marketing campaigns and sales calls to better sales enablement in the pipeline.
Why Do You Need a Sales Pipeline?
Whether your service company is brand new or boasts decades in business, there will always be a need to create your own pipeline when looking to increase overall revenue. Developing your sales processes into a well-organized pipeline can help your service business achieve company goals by providing benefits like:
One of the key contributions of a successful service business sales pipeline is the wide variety of valuable insights. A quality pipeline enables service companies to visualize all key sales metrics that move the needle of company revenue goals and highlights areas of concern that could minimize the sales pipeline value. Such insights can include the number of qualified leads, average deal size, and overall customer lifetime value (LTV).
Creating and Tracking Goals
Sales pipeline insights empower sales team to more effectively create and track sales goals. With zero sales pipeline data, a service company would struggle to understand where their sales efforts currently stand and how they can improve. With a robust pipeline, key metrics can be used to construct daily, monthly, and yearly sales goals — and increase the probability of these goals being met.
Granular data into each pipeline stage can also benefit a service company by providing a layer of accountability. This accountability allows your sales teams to organize various sales processes into predictable and more trackable tasks. Balancing a truckload of sales prospects can be overwhelming, so this layer of divided accountability allows for a more productive and error-free sales process in the long run.
Building Your Sales Pipeline
With an understanding of what exactly a sales pipeline is and the benefits it holds for your service-based company, you’re now ready to begin building your own sales pipeline. Before navigating the various sales stages, you’ll need a few things to get started. These components include:
1. List of Sales Prospects
Prior to outlining any sales pipeline, you must first gather a list of your current prospective buyers. When constructing your sales prospect list, ensure that these individuals adhere to your target audience and ideal customer profile to encourage sales success. Each listed sales prospect should include their names, contact information, and the service type or product you are attempting to sell them.
2. Well-Constructed Sales Process
A reliable sales pipeline hinges on a well-constructed sales process. Sales leaders who fail to construct a well-thought sales process can quickly encounter pipeline issues that prevent them from meeting pre-established goals. A service-based sales process must focus on lead nurturing from the initial point of contact, through attempts for more information, and the ultimate sales conversion.
3. Revenue Targets
With sale prospect targeting must also come revenue targets. Since a sales pipeline is a tool to meet company revenue goals, failing to establish such revenue goals can cause revenue leakage in the pipeline gaps and confusion among sales reps. When determining revenue targets, it’s helpful to calculate the number of deals that must be secured in a set period of time in order to hit your goals.
4. Your Sales Team
What would a successful sales pipeline be without the assistance of your team? When constructing your sales pipeline, it’s important to incorporate the use of team members into your decision-making processes as their opinions and advice could provide better sales pipeline visibility and accuracy.
4 Steps to Create Your Sales Process
With your sales process, sales professionals, and target data on hand, you are now ready to develop your own sales pipeline. Whether you create a single pipeline for your services or multiple pipelines for the variety of products you may have to offer, follow these four steps each time for optimal lead generation.
1. Inventory Your Prospective Customers
A good sales strategy and pipeline must start with a well-constructed inventory of prospective customers. Due to the vast amount of prospective customers you may potentially have, it’s important to incorporate the use of robust customer relationship management (CRM) software to effectively track each one.
Sales CRM software can help eliminate time-consuming spreadsheet input and provides team-wide accessibility for a more collective sales pipeline management process. Such software solutions should be continuously updated to refresh prospect data for complete accuracy each step of the way. A sales CRM also helps sales leaders keep an eye on the complete sales cycle and level of team productivity in order to better reach revenue goals.
2. Create Your Sales Pipeline Stages
Even with well-established revenue goals, failing to set up your sales pipeline stages can result in sales team members quickly becoming overwhelmed and confused about how they will actually reach them. At what point should a sales rep offer a project estimate versus a basic breakdown of various prices and services?
Breaking down daily sales tasks, steps, and expectations will help sales reps more effectively meet monthly, quarterly, and yearly sales pipeline goals while navigating the sales pipeline. When laying out each pipeline step, take a moment to think about typical daily sales activities and determine which ones have been most effective in nurturing leads and successful landing sales.
3. Tune Up Your Stages as You Go
With a sales pipeline in place, managers will want to then continue to refine their various pipeline stages as time goes on. With your sales stages acting as the source of guidance for your entire sales pipeline, it’s important to continually assess areas of weakness and implement new strategies when needed. Refining your various sales steps will help you better forecast sales revenue over time while developing more effective sales strategies that can result in higher lead conversion.
4. Keep Pipelines Organized and Up to Date
A sales pipeline is only as effective as the level of the organization that is put into it. As more and more customer contacts and potential deals make their way into the pipeline, it’s essential that sales managers ensure continuous pipeline updating and organization to avoid any complications. It can be helpful to construct a daily organizational task list you and your team members can follow to ensure all key sales metrics are accurate and up to date. Top-tier organizational practices will help maintain and increase sales pipeline visibility overall contributing to higher sales success.
FieldPulse | Field Service Management Software
Without the right tools, sales managers may find themselves struggling to hit those sales pipeline goals. From decreasing average sales cycle length to increasing sales qualified leads, FieldPulse’s CRM software can help you more effectively manage customer records, streamline client lead communications, and enhance opportunity tracking for complete sales pipeline success.
To learn more about how FieldPulse can revolution your own sales process and take your sales pipeline to the next stage, book a demo or start a free trial today.