The First Half of the Sales Pipeline

Measuring  your sales pipeline as percentage complete, as opposed to probability of close,  will give you a more accurate number for your sales forecast and a more  complete picture of your future sales. By drilling down into a typical sales  pipeline and its stages, we will get a better idea of how the percentage  complete concept works, as well as how an opportunity moves through the  pipeline. This article will review the first four stages of a typical sales  pipeline; the next and final piece in our series will review the last four.

We’ll be  using a sample pipeline based on the sales stages of one of Engage Selling’s  clients. It’s important to ensure that your pipeline is customized to your  business and it’s OK to have more, fewer or different stages than those we’ve  defined in our example. We’ll be reviewing what qualities each stage has and  its exit criteria. The important takeaway is to ensure you have similar  criteria for whatever stages comprise your pipeline.

Stage 1: Discovery (Opportunity  Initiation)

Once the  sales department receives a lead and its contact details, discovery begins. Leads  can originate from marketing, a networking event or a referral, your website or  any other source. The objective of this stage is to gather basic information  about the contact and make the initial call or email. An opportunity only  enters the pipeline if you have had some preliminary conversation about the  prospect’s search for a solution and determined that you are a potential match.  Business cards collected at networking events and info forms from website don’t  count for this stage until the seller has made contact with the prospect.

Exiting the  discovery stage requires:

  • Completing  the conversation and establishing that the account meets criteria.
  • Confirming  client information and processing in CRM.
  • Understanding  the client’s buying position.
  • Establishing  a specific follow-up.
  • Confirming  lead source accuracy.

At this  stage, your opportunity is only 0% to 5% complete in the sales pipeline, as you  haven’t qualified the prospect or begun the sales process yet. You’re just  getting started! However, it’s important to add the opportunity into the  pipeline even at this early stage in order to track how many initial leads  transfer into real, qualified leads and then lead to close. In large part, adding  leads this early is about data gathering for later.

Stage 2: Pre-Qualification

After  initial contact is made, you are now establishing credibility and rapport with  the opportunity during the pre-qualification stage. As a seller, you are confirming  the prospect’s desire for a solution and the time frame in which they’re  working, as well as beginning to establish “why us,” as in why the prospect  reached out to your company and what about your company stands out to them. The  final objective of this stage is identification of key individuals, including  CXO, VPX, directors and officers.

Exiting the  pre-qualification stage requires:

  • Converting  the lead to a contact and associating with an account or company.
  • Creating  an opportunity.
  • Confirming  that this is a real opportunity within a specified time frame
  • Adding  all the additional contacts to the account

Exiting the  pre-qualification stage completes 10% of the sales pipeline.

Stage 3: Qualification

The  qualification process requires time and lots of contact with the prospect to  ensure you differentiate your solution, establish credibility and learn more  about the customer, including their current and future desired state. You must  develop an understanding of their budget, constraints and ownership, their  decision process and criteria and your competitors for the deal. You’ll also  meet with all decision makers and quantify the ROI as well as the effort to win  the deal. Finally, you’ll identify the internal team at your own company that  will work on the sale.

In order to  exit the qualification stage, you must collect the following information:

  • Prospect’s  size
  • Current  technical environment
  • Buyer  characteristics and their role in the process
  • Buying  profiles of all the buyers and influencers
  • Decision criteria and the order of priority for each of those criteria
  • Buying  stage and timeline
  • Business  drivers and buying triggers
  • Competitors
  • The  estimated price on your opportunity

Qualifying  the prospect is a huge step towards completion of the sales pipeline; at this  stage in our example, you’re 25% through the pipeline.

Stage 4: Solution Design

Once the  prospect is qualified and initial information about the opportunity known, it’s  time to get down into the nitty gritty of solution design. What, exactly, does  the client want or need of your offerings? Which options make most sense and  how will the solution be rolled out? This portion of the sales process is about  deep conversations. From a sales point of view, it’s the time to engage the  customer with references and case studies as the client is ferretting out  whether your solution is the right one for them.

In the  solution design stage, it’s important that all concerns, objections and  impediments are aired and that the team understands any budget constraints so  that the solution you are proposing in subsequent steps is precisely what the  customer wants.

In order to  exit the solution design stage, you must:

  • Establish  that the proposed solution meets the prospect’s needs.
  • Receive  internal approval on the solution design.
  • Produce  a proposal.
  • Engage  any required partners.
  • Reach  a conceptual agreement on the solution with the prospect.
  • Define  and approve the criteria for success.
  • The  pricing model is accurate and confirmed.
  • Validate  the timeline.

Completing  solution design brings you to around 40% completion in the sales pipeline.

Next, we’ll continue reviewing the final four phases of the sales pipeline  and bring the sales opportunity to a close—whether a win or loss—and 100%  completion. Stay tuned!