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Six steps to creating an effective sales pipeline

Every services business should have a pipeline, and if they use it correctly, should be able to project upcoming revenue and resource requirements for several months into the future. Create one using these six steps.

A sales pipeline is a great indicator of a company’s health. Assembled and managed correctly it can show you the money you are going to earn in coming months, the opportunities and client relationships you need to pay attention to, and the weaker areas of your business that need greater focus and attention.  It can flag critical shifts in strategy that might be required in your markets.

And a well managed pipeline can be used to drive active follow up of opportunities, pursuit of target clients and generation of revenue in a structured way so that outcomes are maximised and time wasted on ineffective marketing minimised in a firm.

Here is a step-by-step guide on how to define your pipeline:

  1. Identify your target clients, that is, the clients that you plan to target and gain work from this year. The number of target clients your business has will depend on the size of your transactions, the scale of your business and the conversion ratios you need to win work.
  2. Identify the leads that stem from these target clients. Every project, job or opportunity that might be available to your business from each target client on your listed at this stage. This is an unqualified list of every single lead you might choose to chase in the market. Write everything down – don’t omit, select or reduce at this stage of the process as this is the broadest part of the data-capture. When working in the property sector, one development client can have several leads for an architect, engineer or project manager at a time, record them all.
  3. Qualify the opportunities or qualified leads that should be chased further by your firm. These are real opportunities for which a timeframe can be identified that can and should be explored further. It is your firm’s goal to understand them better and position your firm to be asked to quote or submit. At this point you can record estimated fee values and weight the chance of winning, and the expected date the project could commence, starting the process of building valuable data on which you can make future decisions.
  4. Position yourself to convert opportunities into prospects. When you are asked to submit a fee, price or proposal for a project it shifts from being an opportunity to being a prospect. All prospects should have an estimated fee value, expected date of commencement, and percentage chance of winning associated with them so that your pipeline can be a valuable revenue projection tool.
  5. Once a prospect has been submitted on, it moves down your pipeline to become a bid, waiting to be won, lost or qualified as dead.
  6. Winning or losing is the endgame of your pipeline. Every job should be qualified, with the reasons for win, loss, or dead noted and captured for future analysis. After three, six and 12 months you will start to build a body of data that can help you to examine the trends in your business with more than intuition. Who is winning? Who is losing? Which sectors are stronger? Which need more attention? How many bids are you submitting per month and what are your success ratios? How long are bids taking to convert? What is unsuccessful bidding costing you? Are you bidding non-strategically into clients that are not targets? Why?

After one to two years you will also be able to see when peaks and troughs in activity occur (if they exist) and work harder to protect your business from them.

There are plenty of different software applications you can manage your pipeline in, but I recommend you get it started in excel rather than wait for a system to start the management process. If you need a simple template, drop me an email at Rebecca@stretchmarketing.com.au and I will send you one to get started with.

In closing, I also want you to consider what makes your pipeline work well. Perhaps you could offer some of your own tips on the blog. I’ll pick up here in the next article, sign up here to subscribe. 

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Rebecca Wilson

Rebecca Wilson

Rebecca Wilson is Managing Director and Principal Consultant of professional services and growth marketing firm Stretch Marketing, Rebecca and her team provide strategic business development advice, support and implementation to professional service providers and high growth entrepreneurial businesses throughout Australia.

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