Most salespeople get commissions on deals they’ve closed. But how could they earn a reliable income when closing a sale is up to chance? Sometimes the customer says yes, and sometimes they don’t.
It seems very adventurous.
After some research and conversations with other salespeople I learned, it’s not up to chance, and there’s more to it than it meets the eye.
As I found out, every sales organization has a system that helps to close deals and predict Sales. This system is called “Sales Pipeline” or “Sales Funnel.”
It consists of several individual steps. These steps may differ between organizations, depending on if they sell directly to consumers (B2C) or other businesses (B2B), as well as the product.
Let’s look at the pipeline I learned to sell to other businesses.
- Whenever a new lead comes in, they’re in the Potential stage. Nothing has happened yet. A lead in this stage has the potential to turn into a paying customer eventually.
- In this stage, we qualify all potential leads, finding out if they are right for us. What problems do they have? We’ll find out about that during one or more discovery conversations (via email, phone, or in-person).
- If a prospect qualifies to become a customer, they will usually want to try the product. Now, this stage differs from product to product, as in how long this takes. For some, it could take 14 days, for others up to several months. Up until this point, it’s still possible and likely that prospects drop out because the product might not fit their needs.
- Important: When the trial comes to an end, we need to work towards closing the deal. A question we could use could be: “With the trial coming to an end, what are the next steps on your side?”. The answer could either be “We found out that it’s not working for us” or “We need to get budget approval and a quote from you.” It’s not our job to be pushy, instead, work towards a decision. If the prospect tells us no, we can ask about reasons and if we could come back eventually. Often, they’re open to that, offering to try the product again once certain features are shipped or changed.
- Depending on the product, the size of our and the prospect’s organization, this step may vary. Usually, at this stage, it’s time to talk about the commercial aspects, such as price and any legal documents (license agreements, etc.). We start this process through a quote that outlines everything we went through, such as subscriptions/licenses, support upgrades, and everything else that’s part of the offer. We send the quote to the prospect and ask for confirmation. They might get back with change requests, but eventually, they will either sign the quote or submit a Purchase Order (PO). Important: In the case of PO’s, the PO number must be on the invoice.
The prospect is now a customer. Usually, once we’ve received either
- a signed quote
- signed license agreement
- or a Purchase Order
the prospect converts to a customer. Even though customer acquisition is complete, there are still more things to do, which we will look at in further posts.
Do you have a product to sell? How does the Sales Pipeline look for you?