Effective sales pipeline management is absolutely essential to the success of any B2B business. It largely contributes to your stability and success in the long run.
In this post, we’re going to cover everything you need to know about sales pipelines, starting with what they are and why they are important to B2B businesses. We will also go through 6 steps for how to build an effective sales pipeline before we cover some related challenges and sales techniques.
We will wrap things up by discussing how eCommerce marketplaces can help modern B2B businesses keep a well-running sales cycle.
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A sales pipeline is a visual representation of the process you use to turn a lead into a prospect, a prospect into a new customer and a new customer into a loyal customer.
This type of model helps business owners and operators understand their preparedness for keeping a full roster of customers even when their current customers drop off or take their business elsewhere.
Defining your business’s sales pipeline as part of your B2B sales process helps to make sure that no leads are left hanging. This will also help to ensure that you have enough customers to not only sustain your business but to grow and scale it to reach your business goals.
It is important to note that a sales pipeline is not a sales funnel, but we will talk more about sales funnel a little later.
Businesses go through many cycles, one being a sales cycle. Some experience seasonal changes and others just cycle through customers naturally.
It is important to keep a pipeline of leads moving along so that you never face a dry period that could be fatal for your business. Managing your B2B sales pipeline properly will help you to continuously make sales, even when a regular customer drops off.
To put it into perspective, let’s say that you need 50 customers who place orders equal to $100,000 a year in order to cover your operating costs and maintain your desired level of profit.
What happens when 10 of the customers drop off at the same time for any given reason? There goes 20% of your revenue. If you’re not prepared, this could put you in the red, and you’ll be forced to scramble and find new leads. But if your sales pipeline is full, losing these customers won’t be as big of a worry.
Having an effective B2B sales pipeline with a safe number of leads will help you to keep things afloat even if you lose some business.
Building an effective B2B sales pipeline is not complicated, but it does require that you follow a series of basic steps.
You’ll start by prospecting and qualifying leads before you make a proposal. From there, you’ll move into negotiations and closing. Once you’ve closed the sale, you will need to nurture that client so that you can retain their business. As we move through this process, please keep your ideal client in mind. You should have a clear idea of who you serve and how you can serve them.
That being said, let’s dive deeper into the 6 steps of building an effective sales pipeline.
The first part of your sales pipeline is the prospecting stage. You need to find the businesses that you’re going to sell to. You have to be very intentional here. Look for clients that meet your ideal customer profile in terms of who they are, what they need, why they need you, what sort of budget they have, etc.
You’re likely wondering how to prospect, which is a very valid concern. However, there is no singular approach.
Currently, not a lot of business is being done in-person, but it is pretty common for B2B wholesalers to meet prospects at tradeshows and industry-specific events. Many salespeople make connections and follow up with the leads after the event.
However, much of this networking has moved online since the outbreak of the COVID-19 pandemic. Professionals are currently meeting one another on LinkedIn, Facebook and other social platforms. Online B2B marketplaces, such as Alibaba.com, are great places to find and engage buyers by launching your digital storefronts and participating in virtual tradeshows.
Some other prospecting approaches include warm calling, interacting through online forums and webinars, asking for referrals from partners and people in your network, and positioning yourself as an industry leader.
One key tip for prospecting is to nurture leads and not sell right off the bat. Get to know your prospects and build trusting relationships.
Before you create a proposal to pitch your offer to a lead, you want to make sure that the business is truly a qualified lead. Do your research, and make sure that they fall into your target market and match your ideal client profile.
Will your offer truly help this business? Can they afford to buy from you? Are they completely legitimate?
Discovery calls are generally very telling. This allows your lead to express their wants and needs, and you’ll be able to determine pretty quickly if your business can help them.
At this stage, you should also determine whether or not your point of contact is a decision-maker or simply a liaison. Your goal should be to get as close to the decision-maker as possible if you cannot speak with them directly.
The proposal stage is a very important part of the sales pipeline because it allows you to clearly spell out what you can offer the customer, how that will benefit them and why they should choose you for their business.
Proposals look a bit different from industry to industry, but for wholesale proposals, you’ll want to include the following information:
For businesses selling physical products, photos and videos are valuable elements of a proposal. Product demos that show your items in action add a nice touch.
Remember to brand your proposal, and make it professional-looking. Check and double-check for typos and grammatical errors.
If you don’t hear a response from the prospect, follow up after a few days to confirm receipt and ask if there is any additional information that you can provide to help them make their decision.
Negotiations are a common part of the sales cycle in the B2B space. Oftentimes buyers will come back with a counteroffer to your proposal.
You can negotiate with the business to work out a deal that benefits both parties. Some things that you may negotiate are price, minimum order quantity, guarantees, shipping costs, turnaround time and discounts for orders of certain quantities.
We recommend considering counteroffers and crunching numbers to make sure they make sense for your business. Small cuts in profit on a single order could lead to millions of dollars in additional profit over the next several years, if you are able to sustain the relationship with the client for years to come.
On the flip side, you won’t want to accept counteroffers that put you in the red.
As you go through negotiations, there will likely be a lot of focus on money. Don’t be afraid to remind the buyer of the non-monetary perks and benefits that you mentioned in your proposal. If possible, throw in additional benefits where it makes sense.
Also, do not rush the negotiation. Give both the buyer and yourself the time and the space to understand the implications of the deal. For B2B wholesaling in particular, you’re probably dealing with high-ticket orders, so be mindful of the fact that your customer might need some time.
As negotiations begin to wrap up and you find a common ground with the buyer, it is time to close the deal.
Please remember that a verbal commitment is not a commitment. You will need to send over everything in writing and collect the payment before the deal is officially closed.
However, this is not as simple as sending over an invoice and expecting the prospect to pay it. Ask the prospect if they have any more questions and let them know that you are sending over the contract for them to review and the invoice for them to pay so that you can process their order.
How you present this specific information will depend on your interactions with the prospect up until this point. If things have been very casual, keep it more casual. If the client is very eager to move forward, match their level of excitement. Read the situation, and do what you have to do to close the deal.
Once you receive the payment, thank the client and express your excitement to move forward in your working relationship.
Closing the deal is a major feat, but it is just the beginning. Keeping a client for the long run is very valuable for your business.
Long-term customers can be easier to work with once you get into a flow with one another. It gives you a steady income and eliminates having to go through negotiations and other onboarding processes again and again.
One of the easiest ways to retain clients is to always produce as promised. Keep the quality of your products high, and keep communication paths clear. Don’t miss deadlines, and show your customers how much you appreciate their business.
Aside from simply doing a good job, go the extra miles to personalize your customers’ experience. Send gifts for the holidays or to recognize major milestones in the company. Some businesses even send birthday cards to their point of contact for a company.
Customer appreciation can also come in the form of occasional discounts and bonuses just to say “thank you.” Little actions can go a long way to show your customers that you value them.
As we mentioned, sales funnels and sales pipelines are not one and the same. The two are often confused since sales pipelines are often visually represented as a funnel.
A sales funnel is a digital marketing tool that automates lead generation. A sales funnel uses 4 primary stages: awareness, interest, decision and action.
Simply put, information is presented to a target audience that is intended to pique their interest. The further they dive into the information, the closer they are to make a decision. They are faced with a call to action that pushes them to move from lead to customer.
Sales funnels are very common among both B2B and B2C entrepreneurs. Businesses tap into digital marketing practices like search engine optimization (SEO), search engine marketing (SEM) and social media marketing (SMM) to reach their target audience.
To sum it up, “sales funnel” refers to a digital marketing tactic, and “sales pipeline” refers to the tracking of prospects and customers in your sales cycle. Much like a sales pipeline management, operating a successful sales funnel requires sellers to foster relationships with their leads and prospects to close the deal.
There are several challenges that B2B sellers face when it comes to pipeline management.
The biggest challenge is that many businesses struggle with prospecting. Even if they know where to find leads, approaching them may be difficult. This is especially true since people are hardened to cold calls, emails and DMs, so they often ignore or dismiss them.
Another issue is that leads and prospects easily slip through the cracks and become lost sales. The reason for this is simple: many sellers do not pay enough attention to the leads and do not adequately communicate their offer. Other times, they push the offer too soon.
Turning a lead into a customer takes time and effort. Sales people must build and nurture professional relationships, and some are simply not equipped to do so.
While sharpening your sales skills will help, calling on the help of external resources and online tools helps many businesses patch up any holes in their sales pipeline.
B2B eCommerce is rapidly emerging1 due to lockdowns and setbacks caused by COVID-19. Alibaba.com is one major platform that has consistently remained at the forefront of the rise of B2B eCommerce.
This platform in particular equips sellers with the tools they need to skate through sales and grow their businesses with ease. While Alibaba.com is primarily an online marketplace for buyers to connect with sellers, it has a fully loaded backend suite that will help make the entire process much easier for sellers.
Some of these features include demand forecast reports, detailed market analytics, CRM tools for managing fostering relationships with clients, and more.
Additionally, Alibaba.com has special tools that make it easy to make sales and do business across borders and take part in the international trade. Our buyer-seller chat portal automatically translates comments in real-time, so sellers don’t need to worry about language barriers. Currencies are automatically converted in the same fashion.
Beyond tools for sales pipeline management, the very nature of an online B2B marketplace provides a consistent flow of qualified leads which can really take the weight off of a seller’s shoulders. And our knowledgeable account managers offer professional services and support throughout your entire seller journey, from onboarding to drive sustainable results.
As you can see, managing your sales pipeline is not difficult but it is essential for sustaining and growing your business. Each of the steps we’ve outlined for building an effective sales pipeline for your business is very important.
If you are looking to prospect and manage your sales pipeline more efficiently for your wholesale distribution business, we invite you to start selling on Alibaba.com. Alibaba.com has over 14 million active buyers, so there is no need to worry about running out of prospects.
As we mentioned, our platform is not only designed to connect buyers and sellers but it is fully capable of helping you manage communication and build relationships with prospects.
Want to know more about how Alibaba.com can help your business close more B2B sales? Speak to an expert now.