How Healthy is Your Sales Pipeline? 8 Strategies to Make It Stronger

Author's avatar Sales UPDATED Apr 9, 2024 PUBLISHED Feb 14, 2022 15 minutes read

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    Peter Caputa

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    Bigger isn’t always better when it comes to your sales pipeline. 

    In fact, many SDRs, AEs, and sales managers alike conflate having a big sales pipeline with having a healthy sales pipeline health. This isn’t true for most organizations. 

    Often smaller pipelines tend to be healthier since sales reps and managers are doing a better job of actively managing potential deals and disqualifying leads at earlier stages. 

    In this post, we’re taking a closer look at the top sales metrics you should monitor as well as sharing some tips to help you create a healthier sales pipeline.  

    HubSpot CRM – Sales Analytics Overview Template

    What Is Sales Pipeline Health?

    Sales pipeline health refers to the number of leads in the pipeline that are likely to turn into closed-won deals. 

    For example, Mindi Rosser says, “A healthy sales pipeline is like a machine with the end goal to be a closed deal, and putting your own machine together is the hardest part. Even if you use someone else’s plug-and-play machine to get you started, it usually needs some finessing to make it work optimally for your business.

    To create yours, I recommend starting with your product/service in mind and how much revenue you need to generate to hit your desired profitability. If you have historical data to work from, this can be used as a benchmark. Then, you work backward to figure out all of your KPIs.

    Each KPI should have at least one relevant action attached to it, so you know what will make that number go up or down. Once you know your numbers, then it’s all about implementing your sales process to build that sales pipeline and adjusting actions along the way.”

    Related: Single vs. Multiple Sales Pipelines: How to Determine What’s Right for Your Sales Team

    Which Pipeline Health Metrics Should You Monitor? 

    We asked nearly 55 sales professionals how often they analyze their pipeline and what metrics they track.

    Of the people we reached out to, 72.5% of the companies surveyed sell services, and 27.4% sell products. 

    And, over 50% of them are analyzing their sales pipelines at least on a weekly basis. 

    how often do you analyze your sales pipeline

    The top metrics they are looking at include: number of qualified leads, win rate, average deal size, and total pipeline value by stage.  

    what metrics do you consider to be crucial for measuring sales pipeline health

    Best Tools for Monitoring Sales Pipeline Health 

    When you are reviewing your sales pipeline weekly (or more), the tools you use should make this process more efficient. Better yet, it should be integrated into your workflow. 

    So, it is not surprising that 43.14% of them cite using dashboard software, such as Databox, as one of their top tools for monitoring their sales pipeline. A sales dashboard is very helpful for gauging your current performance because it combines all the data from the tools you’re using in one place — giving you an overview of the big picture.

    what tools do you use to monitor your sales pipeline

    How Do You Create a Healthy Sales Pipeline? 8 Expert Tips

    Here are some additional tips to help you maintain a healthy sales pipeline.

    1. Prioritize high-value deals
    2. Get clear on your value proposition
    3. Be diligent about removing bad fit deals
    4. Set benchmarks
    5. Get clear on customer acquisition costs
    6. Monitor sales velocity
    7. Diversify your prospecting methods
    8. Stay focused and consistent

    1. Prioritize high-value deals 

    As we alluded to earlier in this post, the healthiest sales pipelines are rarely the largest. The best way to increase pipeline health is to focus on your highest value deals that are also the most likely to close. 

    “Update the sales pipeline & focus on best leads,” says Angus Chang of iupilon. “For a healthy sales pipeline, we have focused on our best leads. If you look closely at your sales process, you’ll notice that it takes about the same amount of time for each deal to close. 

    Concentrate your efforts on the most sales-ready, high-value leads, and stay away from anything that won’t assist your business. Updating the pipeline regularly also makes a healthy sales pipeline. A sales pipeline changes constantly. New leads are added, moved from one stage to another, and closed deals. You may find that your sales pipeline becomes a little disorganized, leading to a loss of sales if you are not careful. To avoid this, we ensure that we keep details up to date on every lead by adding regular notes and information for each stage of the sales process.”

    Ben Lamarche of Lock Search Group adds, “A solid sales pipeline is crucial to our success in an industry as competitive as ours. A healthy pipeline requires that you invest your time and resources in nurturing the best, most high-quality leads that offer the highest conversion and ROI. 

    This includes quickly identifying and letting go of dead leads so you can focus on high-profile, promising leads. Removing leads from your database can be a difficult decision, but it is worthwhile if you look to improve conversions. 

    Lastly, a healthy sales pipeline needs an efficient sales process. Too many barriers can make the sales process unnecessarily long, and your pipeline could leak leads as potential customers lose focus and jump onto the next best and easiest thing. So, keep customer experience in mind when designing your sales process to improve retention and conversions.”

    Keenan Beavis of Longhouse Media Company agrees, “My idea of a healthy sales pipeline is specific and targeted to a certain consumer group or prospects. Sales pipelines are meant to have a clearer understanding of the stages of where the consumers currently are in the sales funnel. Thus, to achieve this purpose, management should not shuffle and compress data to make it fit with a single funnel. This will only lead to confusion and inefficiency in creating analysis and strategy.”

    Related: 14 Ways to Leverage Sales Automation Tools to Close Deals Faster

    2. Get clear on your value proposition  

    A necessary first step before you can even figure out who your highest-value leads are is to get clear on your company’s positioning and value props.  

    “Your ability to create a healthy sales pipeline is contingent on your ability to concisely demonstrate the value of your product or service,” explains Mike Grossman of GoodHire. “If you cannot clearly explain how your business operates, or how your proposition can benefit leads, they will quickly lose interest and stop engaging with your outbound communications. This is the very first step in guiding users through your sales pipeline – make it clear why they want to be there in the first place. Using pipeline analytics, you can get a birds-eye view of how many deals are in your pipeline, how many of those deals resulted in a close, and the average lifetime of a deal before it’s closed. If you find that those numbers ever spike, it’s a good indication that you’ve dialed in on the right messaging strategy and optimized your sales cycle.”

    For example, Patrick Casey of Felix Health says, “One of the most formative data banks is your product copy – it’s what people read before they put an item in their basket or scroll away from it completely. You only get one chance to make a great first impression, so it’s important to clearly demonstrate the product’s value as concisely as possible. 

    As you make small changes to your eCommerce store’s product copy, take a look at your data analytics to determine whether your changes are making a positive impact. By running A/B tests, you can determine whether these adjustments resulted in more people adding items to their basket, more purchases made, or even more cart abandonments. Use these numbers as your reference points to determine whether the changes have been successful, and make small alterations over time until you’ve found the golden ratio.”

    3. Be diligent about removing bad fit deals 

    The deals that you remove from your pipeline and don’t pursue further are just as important as the ones you pursue.  

    “The challenge for most sales professionals is a lack of properly qualifying prospects to determine if they can actually benefit from the products or services being offered,” says Vince Burruano of JK Moving Services. “If you cannot create value for your prospect, the opportunity to earn a sale is diminished. 

    A healthy pipeline consists of well-qualified prospects that resemble your ideal client profile – the best representation of the clients who are already doing business with you. Weak sales professionals clog their pipeline with wishes hoping for the best. To maintain a healthy pipeline, you need to be brutally honest about the names on that list. If they are not properly qualified, they will never convert into business.”

    Andrew Raso of Online Marketing Gurus Australia adds, “To keep your sales pipeline healthy, you should have a timeframe for removing deals from it. All sales reps know to remove deals from the pipeline when customers buy from competitors or flat out say they aren’t interested. But some leads initially express interest and then go quiet. Sales reps often keep these deals in the pipeline for months, hoping they can eventually close them. 

    Although it’s ok to check in with these prospects occasionally, these stagnant deals shouldn’t be allowed to stay in the pipeline indefinitely because they only prevent sales reps from pursuing deals that they might actually close. That’s why you should learn to quickly identify the deals that can’t be pushed through to the next stage of the pipeline. Then, you’ll be able to move on to the next sales opportunity to close a deal without wasting time on leads that won’t buy from you.”

    4. Set benchmarks 

    If you’ve been in business for a year or longer, you are likely sitting on a mountain of useful sales data. You can use this to set benchmarks for every stage of your sales pipeline. 

    “A healthy sales pipeline has to function correctly from one end to the other,” says James Shalhoub of Finn. “We have profit trajectories to compare data against in real-time but more importantly to our business is to ensure each step of the sales funnel propels the next. 

    My sales team values various aspects of the pipeline differently than other businesses in sales because of the nature of our product. We nurture leads but, generally, customers come to us understanding the inherent value of our product. They are motivated to buy because they want to improve the quality of health for their pet. 

    For example, our most poignant sales qualifier is usually whether or not a visitor to our site is a pet owner. In turn, this tells us how effective our marketing strategy is at targeting leads in the correct demographic. Our sales team focuses more on why our product is more suitable than similar products in the market or on why our supplements are a good fit for a particular dog breed to close sales. As a digital business, we regularly track the size of our sales pipeline using a sales dashboard software but leads don’t necessarily go through multiple stages to close. 

    Every company’s pipeline should look a little different depending on the industry. The main focus, however, should always be how efficiently your pipeline moves qualified leads towards a sale.”

    Related: Competitive Benchmarking: What It Is and How to Do It

    5. Get clear on customer acquisition costs 

    One core benefit of setting benchmarks is that you’ll develop more realistic customer acquisition cost estimates. 

    “A healthy sales pipeline should mirror your sales process and the most important metric, in my opinion, is the cost to acquire a customer,” says James Heidebrecht of Policy Architects. “I see too many business owners focused on the cost of leads. As far as I’m concerned, lead cost is irrelevant, acquisition cost is everything. I like to keep my acquisition cost under 25%. 

    A healthy pipeline should also have multiple funnels. For example, we have 3 funnels: organic leads, Facebook ads and Youtube ads. It’s essential not to be dependent on one funnel. Recently, our organic traffic cratered due to site issues including loading time and mobile responsiveness. While we worked to correct these issues, we were able to compensate for our dip in organic leads by increasing our Facebook and Youtube ad spend. It’s sobering to realize how vulnerable your web traffic can be when it comes to Google.”

    6. Monitor sales velocity 

    Time is one of the biggest deal killers. Therefore, make sure you monitor your pipeline velocity rate.

    “A healthy sales pipeline has an average sales cycle based on your industry standard,” says Mohamed Hassaan of Style Recap. “The longer the sales cycle, the more time you’re spending on unproductive activities: chasing dead leads, serving uninterested customers, or waiting for decisions that never come. The shorter the sales cycle, the more effectively your agents engage with prospects, qualify them, and close deals. 

    If your pipeline is too long, try to define why prospects aren’t responding to communications or moving forward in the sales process. Are they interested in what you have to offer? Do they need to conduct research or evaluate other options? Is there something else you’re doing wrong? If your pipeline is too short, either your agents are being too pushy with their prospects or you’re not qualifying enough opportunities to create a healthy pipeline. Either way, you’re wasting leads and burning time chasing inappropriate prospects instead of focusing on qualified buyers who are ready to buy now. The main metric to pay attention to is “revenue per month”. If you’re not generating revenue, you’re wasting your time. Period.”

    7. Diversify your prospecting methods 

    This is almost too obvious to include, but your sales pipeline health depends on having leads in there. If you have all of your lead gen efforts in one basket, you’re putting your sales efforts at risk if that channel dries up. 

    “One of the most important parts to an online sales pipeline is that first step: prospecting,” says Mark Aselstine of Wine Club Reviews. “I’ve worked with so many small businesses that thought their pipeline would work well enough, if they were only feeding it in one way, only to find that route dried up. 

    As an example, if you are totally dependent on SEO and then Google changes its algorithm, your pipeline suddenly ceases to exist. Instead, the most successful businesses have a large number of ways to get consumers into that top of the bucket and then they use data to continue them down the sales process.”

    Related: 32 Prospecting Tips to Help You Book More Sales Meetings

    8. Stay focused and consistent

    Another key to maintaining a healthy sales pipeline is staying focused and practicing the fundamentals. 

    “In today’s world, a healthy sales pipeline takes focus and consistency from your sales team and/or the entirety of the sales process,” says Matt Erickson of National Positions. “The days of spray and pray, cold calling, and strictly focusing on new sales are over. The competition is too great and the customer’s time is too finite to churn and burn at such a rapid pace. 

    Depending on your business model, it takes a conserved effort when it comes to targeting and connecting with customers. It then takes additional focus to keep this individual engaged and keep your brand top of mind – whether this is done via B2B personal contact or B2C remarketing and email efforts. There then needs to be an increased emphasis on reconnecting with customers and nurturing lifetime value. By focusing on the entirety of the pipeline and even “re-harvesting” from it, you can prolong the validity of your sales pipeline rather than constantly trying to fill a pipeline that is full of leaks.”

    For example, Roy Morejon of Enventys Partners adds, “To build a healthy sales pipeline, especially for an agency like ours, we’ve found one of the most important things is to stay in communication with prospects. Generating valuable leads really hinges on staying top-of-mind a lot of the time, so knowing how and when to communicate with prospects is important in building and maintaining a robust sales pipeline. Reaching out, following up, and even knowing when to back off a bit are all crucial to keep a pipeline operating healthily. 

    Staying on top of communication also helps you monitor some key pipeline metrics, like the number of deals in the pipeline, the average sales cycle, and the average size of the deals, among other things.”

    HubSpot CRM – Sales Analytics Overview Template

    Monitor Your Sales Pipeline Health with Databox 

    Maintaining a healthy sales pipeline starts with knowing who your ideal customers/clients are and how your product or service helps them.  From there, it is all about monitoring each stage of the pipeline and acting in a timely manner. 

    That’s where dashboard software, like Databox, can come in handy. You can use Databox to monitor and report on performance from all of the different sales tools your business is using in one place. Sign up for free today to visualize your key sales pipeline health metrics.

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    Article by
    Jessica Malnik

    Jessica Malnik is a content strategist and copywriter for SaaS and productized service businesses. Her writing has appeared on The Next Web, Social Media Examiner, SEMRush, CMX, Help Scout, Convince & Convert, and many other sites.

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