Businesses with a strong sales pipeline are able to move customers down the line with ease and send qualified leads through top-funnel efforts effectively. However, some entrepreneurs may find challenges when building a sales pipeline that works for their business.
To help, 15 members of Forbes Business Council discussed a few of the biggest obstacles business owners may face with their sales pipeline. Follow their recommendations to overcome these challenges and improve the way you manage prospective customers.
1. Believing Hype Over Reality
In an early-stage venture, entrepreneurs are challenged with matching up a pipeline with common obstacles that will stall or prevent timely closings. Without historical data, specifically on objections and closing speed, a sales pipeline can lure leaders into believing hype over reality. – Christopher Allen, Nova Space Inc.
2. Lack Of Historical Data
Without much historical data, the shape of the sales funnel is difficult to determine. Entrepreneurs can use industry experience or similar companies’ lead-to-close ratios and opportunity sizes to understand what to invest in business development in order to achieve their sales goals. Establishing solid processes in marketing and sales automation is key to making data-driven decisions early on. – Gabriel Smith, Pricefx
3. Casting The Net Too Wide
Business owners may run into a lack of clarity on the highest potential leads. Often, in efforts to find the “most” leads, entrepreneurs go too wide and end up with a number of offbase or unlikely-to-convert leads when they should be focusing on the most impactful ones. It’s important to align on which prospects are most valuable and double down in that specific area to ensure your time is being used well. – Joel Gottehrer, Lifepro Fitness
4. Failing To Have A Plan
One specific area so many entrepreneurs struggle with is failing to have a plan that includes clear measurable targets. It’s easy to let your business run you and simply be along for the ride. Without a plan, there is no chance of success long term. Get clear about what you want and why, then put it on paper. – Steven Schabacker, Sheepdog Firearms
5. Unreliable Forecasting
Reliable forecasting is always a challenge. Knowing what deals will end up in the closed/won stage is a skill that requires data and intentionality. You will build a strong forecasting muscle by collecting conversion data and constantly calibrating the probabilities associated with each deal stage. Having reliable forecasts help entrepreneurs plan their business proactively against growth. – Dan Parsons, Thoughtful
6. Unclear Communication With The Sales Team
You need visibility and accuracy. Do you know the answer to important questions like how long does it generally take to close a deal? What type of leads should you prioritize? Transparent communication with your sales team is key as they will have specific insights about each deal in the pipeline today. One best practice is to document everything. This will give visibility into the status of the pipeline. – Karim Zuhri, Cascade Strategy
7. Staying Organized
One of the biggest challenges facing entrepreneurs when it comes to sales pipeline management is staying organized. To stay organized, entrepreneurs need to implement a system for tracking their sales pipeline. This could involve using customer relationship management (CRM) tools to create spreadsheets and more. Whatever system you use, the important thing is that it works for you and your team. – Dustin Lemick, BriteCo
8. Accurately Categorizing Leads
A pipeline is only reliable and helpful if it is well-managed and maintained. The challenge is accurately categorizing the pipeline by the likelihood of closing and keeping it up to date as a client or customer moves through the pipeline. We update our pipeline each week with new leads, cold leads or updates as to where leads are in the funnel, such as whether they are asking for a meeting or negotiating on price. – Laura Silver, Blue Door Communications
9. Having A Flexible Pipeline
Managing your pipeline means having a process in place to oversee the flow of your leads and opportunities. A flexible and transparent process is highly important, but it must still end in your business’s favor. You can set up a system where your representatives will feel guided but not constrained. A flexible pipeline will also allow you to accommodate different analyses and queries at once. – Udi Dorner, SetSchedule
10. Lack Of Follow-Up
One sales pipeline challenge entrepreneurs face is letting their hot leads go cold because of a lack of follow-up and an unorganized tracking system. In order to address the issue, you have to get a trusted CRM to track and organize your leads. This will reduce duplicated contacts and log contact histories, which is helpful to your sales team so they can effectively communicate and follow up. – Pavel Stepanov, Virtudesk
11. Receiving Responses
The biggest challenge in the sales pipeline is getting prospects to respond. Everyone is so inundated with email and digital communication that to be successful, you have to break through the noise. Do this through personalization, relevance and differentiation. Make sure your personal notes and insights are timely (recent articles or awards), and set yourselves apart through imagery or video. – Chase Flashman, ShipSigma
12. Building Returns Into The Pipeline
Your product will not always sell through at the retail level, so along with sales, you must also build returns into your pipeline. If you plan on accepting returns, make sure to also protect the integrity of your product pricing with a seller agreement that stipulates they will send the merchandise back to you rather than sell it to a liquidator that will discount it. – Kelley Higney, Bug Bite Thing
13. Lead Qualification
Lead qualification is always a challenge when it comes to sales and, most importantly, entrepreneurs as they may not be in a position to afford additional resources or tools yet to assist in that effort. One solution here is to engage advisors with subject matter expertise to assist in this critical work. – Geoffrey Roche, Core Education PBC
14. Neglecting Higher-Quality Leads
Effectively maintaining your pipeline is an often overlooked necessity. Most sales pipelines are full of pipe dreams, as salespeople may be hesitant to move on from those they “hope” will close, so they end up diverting attention from those who will close. Making sure your sales pipeline is finite, workable and well-qualified may lead to less volume but it will give far higher quality opportunities. – Chris McGrath, Esteemed Inc
15. Broad And Generalized Dashboards
Today’s economic challenges often delay a prospect’s ability to move the sale forward due to financial resource availability. Therefore, dashboards being used to manage pipelines need to go beyond gross numbers of prospects to include data on time in the pipeline, the challenges to the purchase and what sales are doing to help the buyer overcome those challenges. More detailed dashboards need to be used. – Jerry Cahn, Age Brilliantly