5 Ways Sales Pipeline Management Grows the Bottom Line

Managing the sales pipeline and sales people is challenging no matter the industry. Whether selling large ticket items or products and services that typically take customers several weeks or months to decide upon, sales people have a way of making the future look rosy for management.  Too often, reality doesn’t measure up.

Sales people are great at telling stories about all the great opportunities they’re working on.   Most often without malicious intent, sales people tell management what they want to hear and management believes it.  Sales people can be out of the office much of the time and may have only a few moments to update executives on the latest news from the field, so management gets only bits and pieces.


All of this abbreviated communication causes the business to miss opportunities, react slowly to changes in the market and miss their revenue goals.  Managing the sales pipeline rather than managing hopeful anecdotes can put the business in position to see the future more clearly and build a stronger sales approach.  In businesses where the “inmates run the asylum”, or where management lacks sales and sales management experience, managing the sales pipeline can seem like redundant work; sales people should be spending their time with customers.  However, the benefits of creating a consistent, measurable sales pipeline management process are tremendous and easily achieved once the will to start has been found.  Following are five ways that sales pipeline management leads to increased profitability.

Motivate Sales People by Helping Them Compete with Each Other

Sales people are frequently paid on commission and compared using close sales totals.  However, for expensive, long sales cycle processes, there can be many ups and downs in results and sales winners can look like losers and vice versa at any given moment in time.  Measuring the total volume of opportunities being pursued by each sales person helps them compete based on their ability to prospect and find new opportunities and customers.  A seasoned rep may have a few well developed accounts that keep him in the black each quarter but, measuring the total sales opportunity pipeline can shine a light on more aggressive reps that are building the future of the business by finding new high value customers.  Sales contests and bonuses can also provide incentives to build new markets and develop new product lines but, only when the sales process is measured from start to finish.  This results in more realistic opportunities and more opportunities in the pipeline.

Manage the Revenue Roller Coaster

Sales people typically love to spend time closing deals.  Staying motivated to network, cold call, get referrals and find new prospects for sales in future months is more difficult.  It’s easy to “put off” prospecting activities that build future business, especially when management only sees the end results.  Monitoring the overall pipeline of future business opportunities can identify early on when sales people neglect prospecting activities.  Management has the ability to address prospecting problems early on, before they have a material impact on revenue.  Likewise, seasonal businesses can increase the focus on prospecting during “off months” to ensure the good months meet expectations.  By tracking all potential opportunities and the status or stage of each opportunity, the business can predict future business in aggregate and by territory and product line to identify short falls or opportunities while there is still time to impact final sales results.

Predict Future Demand

In many businesses, over estimating future demand can result in excessive inventory and kill profits and under estimating demand can result in missed sales.  Visibility of the sales pipeline allows accurate prediction of future demand.  Production lines can work over time to meet expected demand but, this increases costs.  In any business, staff levels can be increased or decreased in concert with expected future sales to ensure reliable delivery while reducing costs.  By measuring the sales pipeline by product and territory, unique and otherwise unseen shortages or overages can be identified in time to react.

Close More Sales Faster

In most businesses, sales get stalled most often at the same point in the process.  It can be difficult to clearly see the bottlenecks without objective measurement of all sales opportunities, as opposed to only those that purchase.  A business may feel good about closing 30% of the “leads” they get each month but, by identifying that 50% of sales opportunities stall as soon as a proposal is prepared, strategies can be identified to better qualify opportunities early. This allows you to avoid wasting time on customers where budgets don’t exist and better educate them of your solution’s value prior to the proposal to avoid sticker shock.  This allows sales reps to focus more time on opportunities with the highest probability of closing and win a higher percentage of them.  More detailed measurement of the sales process inevitably results in better and earlier qualification of opportunities and shorter sales process time.  Many CRM software solutions offer easy to use pipeline tracking tools.

Increase Close Rates

Breaking down the sales process into typical steps facilitates thinking about the customer’s “buying process”.  Customers can’t digest everything there is to know about a product and service all in one presentation.  Some information is only useful or relevant to the customer after they’ve been educated on other concepts earlier in the process.  Sales pipeline management allows sales presentations and marketing collateral to be organized so that the customer learns just enough to encourage them to take the next step in the process but, no so much that they become overwhelmed and put the brakes on the entire process.  Well sequenced sales processes, built around objective pipeline analysis can overcome common objections before they ever arise, moving sales forward faster and avoiding typical stalls.


Sales pipeline management is never perfect and always evolving.  Many businesses avoid it due to the ephemeral nature of the information.  What a business knows about sales opportunities today will change tomorrow.  However, no business can fine tune it’s sales process to maximize sales performance, market penetration, profits and customer satisfaction without measuring the flow of customers and opportunities through the sales pipeline.

Rather than procrastinate, it’s best to simply begin by measuring the input as well as the output of the sales process (how many leads go in, in addition to sales closed) and build subtlety from there to increase visibility and insights.