A sales pipeline is a visual representation of the buying process divided into a series of “stages” that the prospect goes through to complete the purchase. It allows you to categorize your leads according to their actions and their likelihood of buying. This lets you have a better overview of your future business, by creating more accurate projections into future sales, prioritize opportunities, and create targeted communications based on the stage they’re currently in.
The sales pipeline is often confused with the sales funnel. The difference between them is that the sales pipeline is more focused on the value of the open opportunities, actions and classifications done by the sales team, in order to provide a better overview of their opportunities and status, which helps them categorize their current opportunities. In contrast, a sales funnel focuses more on people, or leads, measuring their conversion rates and what percentage of them advanced through each stage of the pipeline.
It’s a common mistake for companies to only use one sales pipeline. This is because it may seem more comfortable for them to create a simple and easy to interpret report than manage multiple ones with different variables. Another reason they may only have one sales funnel is that their current CRM or marketing automation system can’t create more than one sales funnel, so they adapt to the tool’s limitations.
Having more than one sales pipeline means that you’ll be able to create multiple processes that reflect the different selling processes that you have, according to different buyers or your product/service’s characteristics.
The clear sign that you need more than one sales pipeline appears when you notice a lack of clarity or confusion in these steps, when you're spending too much time trying to compile data that doesn’t entirely fit together, or when your current pipeline or has too many “exceptions.” Having multiple funnels can ease your sales projections as well.
When Do You Need More Than One Sales Pipeline?
- When you have very different clients with different buying behaviors.
- When you sell very different products or services, which have clear differences in the buying process.
- If you have multiple channels with different behaviors.
- If the way your product or service is sold depending on the deal size.
- According to the type of product being sold: for example, if it’s sold in a bundle or as a custom solution.
What Are The Benefits Of Having Multiple Pipelines?
Some sales and marketing automation systems are built to reflect multiple pipelines and can provide better reporting. Having multiple pipelines can help you truly reflect your different buying processes and have more precise information. It can also help you better prioritize your opportunities according to the likelihood of their closure. Sales teams can also be organized according to the type of pipeline they are in.
As we stated before, having multiple pipelines can help you and your teams get a better understanding of the selling process, create more accurate projections and better organize your teams. But this doesn’t mean you may not incur in other, easy to avoid problems.
What Are The Common Mistakes To Look Out For When You Have Multiple Pipelines?
- Undefined or lack of clarity in each pipeline: if the differences between them are unclear, this can lead to duplicate opportunities, hard to define ownership or incorrect data input.
- Creating too many pipelines: it’s easy to get tempted to create multiple pipelines to provide very precise information to your reports. But it’s essential to create a convenient way of segmenting the data to make way smart analysis.
- Lack of documentation or onboarding: it’s essential to make sure everyone in the sales team understands how the pipeline works and to have documentation to refer to in case of confusion.
CRM and sales tools were created to help track leads and opportunities, make better reporting and sales projections. It's important to customize them to your need and not mold your processes into their offering or what may seem to be the right solution without doing any research.