How to Increase Your Pipeline: A Step-by-Step Guide for Suppliers
One of the questions we hear most often is, "Can you help us increase our pipeline?" It's not surprising - sales is a numbers game, so the more you can get into the pipeline, the more revenue you can expect to come out of it.
One of the biggest indicators of how a month, quarter, or year is progressing is the health of your pipeline. As sales teams well know, all eyes are on the pipeline on a regular basis, and it is a foundational expectation that sales teams will keep their pipeline data up to date in the company’s Customer Relationship Management (CRM) system.
There are three main pieces to a supplier’s sales strategy - their sales team, marketing team, and channel partners - and all are responsible for working together to fill the pipeline. Here’s how to do it.
Why is it Important to Measure the Pipeline?
A pipeline represents all potential business, at all stages of the sales cycle. Sales teams are responsible for updating their customer data real time, since so many parts of the business depend on this information:
Sales management needs to know if they have enough activity to hit their targets.
Product groups rely on this information to match supply and demand.
Marketing teams need to know where demand is heavy and where it is soft.
Operations might need to adjust programs or plans depending on the health of the pipeline.
Executives can use this data to identify accounts where they can step in early to strategize or make contact.
Who is Responsible for Building the Pipeline?
It is generally accepted that there are three parties involved in building the pipeline:
Each company may have a different split, but the important thing is that there are targets for each of these groups to be accountable to.
In one of our past companies, we split the responsibility for building pipe three ways: Sales was responsible for 40%, Partners for 30%, and Marketing for 30%.
This falls in line with benchmark data from Sirius Decisions, who suggests that the marketing team drive between 10 – 40% of the pipeline. Sirius also points out that there will be two types of marketing contribution to the pipe: marketing sourced, and marketing influenced.
There are two main benefits to allocating the pipeline. First, it brings visibility to a common target and accountability to each team responsible. Second, it brings sales and marketing closer together, with each sharing in the common goal of delivering revenue.
Why does this matter? Radius reports that “failure to align sales and marketing teams around the right processes and technologies costs B2B companies 10% or more of revenue per year.”
How is Pipeline Measured?
It is crucial to have systems to measure and report on the pipeline. We like to call this a single source of truth. The last thing you need is to spend precious resources debating about which set of data to use.
In addition to the data that will be used, other agreements are also necessary:
Which CRM system will be implemented
Which sales stages you will use
How you will define each stage (typically with a description and likelihood of closure at each stage)
Guidelines for hygiene - it’s easy to become focused with the hottest deals and neglect the rest of the pipeline.
We would periodically ask our sales team to go through and clean their pipeline up since bad data leads to bad decisions. McKinsey cites a rep that blocks 30 minutes after each sales call to update his data in CRM.
It’s worth a few words here on the difference between a pipeline and a funnel. You need to manage both, again using an agreed upon set of data and reports.
Aja Frost of HubSpot succinctly defines a forecast as “the deals likely to close in a given time period” and the pipeline as all deals at all stages. Each team will set the frequency of their team pipeline call (to determine how many deals are in each stage and how to matriculate them to the next one) and their forecast call (to gauge whether the team will miss, hit, or exceed quota).
How Much Pipeline do you Need?
You will calculate a pipeline multiple to determine how many opportunities you will need. You will not close 100% of every sale, so you need to figure out the multiple required for each product and responsible party.
A direct sales force might only need a 2x pipeline multiple since they might have a high (50%) likelihood of closing a deal. Whereas a marketing pipeline multiple might need to be 6x, reflecting a lower likelihood of their activity converting to sales.
Again, Frost of HubSpot lays out the math this way: Take your quota and divide it by your average deal size to calculate the number of deals you need to close in a given time period. Next, take that number and divide it by your close rate.
For example, if you typically close 50% of deals in the negotiation stage, then you need 2x that number of opportunities. As you get more data, you will most likely adjust your multiples.
Activities to Generate Pipeline
Now that you know how much pipeline each of the stakeholder teams needs to deliver, it’s time to get moving to build the pipe. Different groups will manage different activities, ideally all in alignment with a common message, brand, and value proposition. The idea is to have massive activity since sales is truly a numbers game.
Responsibilities of the Sales Team
Your sales team will be doing research on prospects, making phone calls to talk about the value proposition, and securing appointments. The ability to learn about the customer is vastly easier with resources on the internet including LinkedIn and Twitter. You can more easily know what topics your prospects are interested in by seeing which groups they have joined and which topics they are tweeting or blogging about.
The sales team will also be arranging for demonstration or loaner units, setting up trials and tests, assigning additional resources such as systems engineers, and visiting the customer to deliver presentations. Ideally throughout this whole process your team is focused on helping their customer solve a problem or innovating in a new area so that they are seen as adding value and not as “just another sales person.”
Responsibilities of Your Marketing Team
The marketing team will be feeding the pipeline through a combination of both more traditional efforts such as events and mailings (direct or electronic) as well as using social media.
A Forbes article points out the need to ensure your social media presence and plans are in line with your brand. Some digital and social efforts include Banner Ads, LinkedIn Ads, or Tweet chats.
This team is also responsible for promotions that compel the prospect to act in a given timeframe; as well as programs and promotions to incentivize the partner to act. All of the programs, campaigns, and collateral the marketing organization creates needs to be made available to partners, for them to use as-is or to customize.
Responsibilities of Your Partners
Your partners will largely be doing the same types of activity: identifying potential prospects, and creating value for them. The partners will be relying on you as a supplier to provide them with both sales and marketing resources.
Examples include product training, collateral, demo units, presentations, playbooks on how to handle objections, and other resources that enable them to represent you just as well as your badged employees.
What Can You do to Increase the Pipeline?
The pipeline always needs to be fed, and customers need to move through it. Sales, partners, and marketing teams can all take steps to maintain a healthy pipeline. A few ideas to increase the pipe and move prospects through the stages more quickly could include:
Do a better job identifying prospects and share your target personas with your partners
Use an inside sales team to find more knowledge about the prospects
Deliver tools to matriculate prospects through the funnel such as a time-limited call to action
Use executives in the sales cycle
Offer your executives to partners to take out on their sales calls
Offer targeted promotions for partners such as a net new logo rebate
Offer limited time special promotions for customers
Create bundles with special terms and / or pricing
Work with select partners on specific initiatives and campaigns in targeted vertical markets
Test your pricing and discount strategy
Simplify all of your processes to take friction out of the buying process for both partners and customers
Building and maintaining a pipeline requires time and effort - if there were a single magic bullet to create the perfect pipeline, it would have been discovered and patented by now.
It takes commitment and discipline to not only do all of the activities but to also document them in your CRM system. Without this insight, an individual rep might do fine, but the company will be flying blind. With it, the whole company can move in the same direction, and then celebrate together when the revenue goals are met.