For manufacturers, it’s not just the production of goods that is integral, but it’s also convincing customers to purchase these products, and building long-lasting relationships with the right partners. A sales pipeline is a key part of measuring success in this arena.
In this article, we detail exactly what a sales pipeline is, and why it’s so important. Perhaps more importantly we highlight the different stages of a sales pipeline, how to manage one effectively, and how our software enables you to improve this process.
Read on for some useful tips…
What is a sales pipeline?
The purpose of a sales pipeline is to give you an overview of any sales that will potentially take place during the times ahead. For a manufacturer, this could include a recurring customer that places the same order every month or a prospective buyer that declared an interest at an industry event.
The pipeline is broken up into stages so that you can progress customers from one step to the next (which essentially feeds the sales process). It is sometimes known as a sales funnel, and has the ultimate goal of getting deals closed.
What is the importance of a sales pipeline in manufacturing?
By having these stages, there is a clear pathway on a prospect’s journey to becoming a customer, and you know exactly what action needs to be taken in order to progress them to the next step. If you notice there are many prospects in the early stages of the funnel, you can manage your resources appropriately to cater for this.
A sales pipeline helps with attaining a clearer view of future performance, so that you can analyse whether you’re on target, and make adjustments accordingly. By supporting you to forecast revenue, the pipeline provides knowledge that is invaluable to your business.
What are the stages of a sales pipeline?
This initial phase is simply the way potential customers hear about your company in the first place. A smaller manufacturer may gain custom via word of mouth, or by advertising in the local newspaper. Other businesses may have a dedicated marketing team that promote products on social media, their website, local radio stations, billboards, and more.
Once a prospective buyer has heard of you, the next step is to assess whether it’s worth the time and energy to pursue them. The legitimacy and quality of a lead should be assessed before it is passed over to the sales team.
The first thing to figure out is whether they falsely declared an interest, perhaps clicking onto your website or opening an email by mistake. You must also assess whether their business is likely to have a need for the products you sell, and whether they have the budget to make such purchases.
You can score your leads to indicate their health / value. Pipelines allow businesses to assign the right team member to each account.
Once a prospect has been deemed a qualified lead, the next thing to do is make initial contact (perhaps via phone or email). It can be sometimes difficult to get in touch at the right time and to get through to the right person, but these are common sales obstacles. This step is all about laying the foundations of a relationship and really shouting about the perks of your products.
If the initial conversation goes well, you can offer to show them how well your product works. A demonstration may not always be necessary, depending on the type of products you sell (and the keenness of the customer). But it can be advantageous to schedule a meeting in person either way, as this helps to build trust.
At this point, it may be the right time to discuss pricing and other terms. The prospective client may decide to negotiate, in order to get a better deal for themselves. So, you’ll have to weigh up whether a price reduction is something you’re willing to do. It can be necessary sometimes to finalise a deal, but shouldn’t be done at the expense of your company’s wellbeing.
Close the deal
This is arguably the most straightforward part of the sales process, but simultaneously the most difficult (and important). This is where you must ask if the customer is happy to go ahead with the purchase, at which point they’ll either say yes or no.
Won / Lost
Even when the proposal has been accepted or rejected, there is still work to do. If the prospect has said no, you should determine if their reasons make it a permanent decision. If so, you’ll want to remove them from the sales pipeline. But if they mention they may be interested in six months, you could reinsert them at an earlier stage, and try again later down the line. If the deal does go ahead, you should keep in frequent contact to maintain a healthy relationship.
What do you need for effective sales pipeline management?
- A database of all your prospects
- An idea of your typical customer
- A way of recording how prospects learned of your business
- A method for ranking the quality of opportunities
- A way of calculating your potential revenue
- An idea of how long your typical sales cycle lasts
- Knowledge of the sales tactics being used by your business
- A way of calculating conversion rates based on past performance
Top tips for improving your sales pipeline in manufacturing
Keep your pipeline up to date
If a prospect needs to be added or removed from the pipeline, this should be done immediately. The same applies if they have moved from one stage to the next. You should also have an effective method for keeping notes related to past communication so that you don’t lose sales by bombarding them with repetitive messages.
Your sales pipeline should only be filled with up-to-date information so that you have an accurate picture of the financial value of future deals.
Ensure pipeline stages are clearly defined
Each step of your sales pipeline will be categorised, so there is a clear progression from one stage to the next. But the boundaries between each of these stages should be clearly defined too. If you’re not certain which parameters must be met for a prospect to progress, there’s a chance they will be forgotten about, and they will take their business elsewhere.
One way to stay on top of this is to evaluate what the typical process looks like for any given sale so that the whole pathway is mapped out (with no grey areas). Stages can be removed or added as the process evolves.
When it comes to sales, employees should look to work smartly and efficiently. This could involve prioritising leads based on their perceived quality, the size of the deal, or how far along the pipeline they are.
Salespeople must sometimes be persistent in today’s world, as there’s more competition in the manufacturing industry than ever. But there’s also value in knowing when to stop trying, so that time isn’t lost on an impossible task.
Carry out regular reviews
You should regularly review the processes involved in your sales pipeline, to see if any aspect can be enhanced. This will also highlight which parts are working well and which aren’t, which may influence a strategy rethink.
You may determine that the cycle needs to be shortened, as there is more chance of losing someone’s custom if it drags on for too long. These kinds of insights cannot be found without frequent analysis.
Generate enough informative content
It can be important to create content to draw people into your pipeline initially. But you may also want to serve them useful content once they’re in the sales cycle too, perhaps in between some of the stages we’ve mentioned.
This could include emailing them a link to an informative web page with product descriptions, or to a YouTube video that acts as a tutorial. It’s good to stay in the mind of the prospect (as long as the collateral is engaging and not overbearing).
Implement contact management software
The quickest, easiest, and most transformative way to improve your sales pipeline, is to utilise the help of technology. Manufacturers tend to opt for a contact management solution, as this offers simplicity, and dedicated functionality for the aspects they need.
With the aid of a digital system, it’s far easier to implement the tips mentioned above, whilst also making fewer mistakes, working faster, saving time, and gaining more complex insights from your data.
Which contact management software should you use?
As with any system, when selecting it, you must ensure it possesses the desired functionality. With contact management software, you’ll want a solution that allows you to easily store and manage the contact details of customers and prospects.
Advanced’s Manufacturing Software allows you to do just this, with dedicated fields to store all the necessary information. Each customer’s account shows you everything you need to know, including their latest address, which products they purchase, the value of these purchases, and any relevant notes.
The system provides a clear picture of the overall health of these relationships, with helpful dashboards, so that you know if any action must be taken. You can also track the orders of each customer, making it more likely to deliver on time.
In a system like this, you can more effectively monitor what customers owe you, and when they must pay you (which is particularly helpful if you negotiate unique deals with certain clients). This ensures you can be paid the right amount, and on time.
As it is a cloud-based system, this information can be accessed at any time, and from any place. If a sales employee is travelling out to a prospect, they will have all the relevant information at their fingertips. They can also update the system remotely if they discover a contact number needs to be amended.
With your sales pipeline structured in an orderly fashion, you can seamlessly progress prospects through the journey, without having to sift through lots of paper documents or spreadsheets. The solution also makes automatic calculations with regards to potential revenue, saving your finance team time and effort. With full visibility around sales to come, you can forecast more accurately, and make informed business decisions.
Manufacturing Software’s true power comes from the fact that it is an all-encompassing business management solution. On top of contact management, there are also accounting, stock control, production planning, e-commerce and payroll components.
Therefore, all your departments have access to a unified and consistent pool of data. Any sales data held in the e-commerce or contact management functions can be incorporated by the finance team for accounting purposes.
If information changes in one part of the system, it impacts any corresponding areas. When you combine powerful reporting capabilities with this level of automation, you can be more efficient, more productive, and make smarter decisions (which in turn enables your business to grow as far as your ambition takes you).
If you want to build a strong and sustainable sales pipeline (and just generally improve your sales process), take a more detailed look at our Manufacturing software solutions market page.