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Those with some sales experience under the belt know that sales is a numbers game. But how come sales results change so much even after you’ve defined your sales stages and calculated your conversions? How do you tell if your pipeline is ‘healthy’? Apart from the obvious ‘Am I hitting my sales target?’  here are 5 key questions to ask yourself:

1. Do I have enough prospects at each stage of the pipeline? 

A healthy pipeline will have prospects at each stage.  It sounds obvious but if you focus all your activities on closing deals in the later stages, without filling the pipeline at the beginning, you’ll be left high and dry once those deals have closed and the beginning of your next month won’t feel great.

I like to know that I have deals in each stage that can realistically be moved onto the next stage, and keep the pipeline moving. How much is enough? If your stage-to-stage conversion rate is 50% then “enough deals” is based a ratio of 8:4:2:1 for each stage. You can use the sales pipeline calculator to find the exact numbers for you.

2. Is my pipeline moving? 

A pipeline needs to flow. If a deal stays too long at one stage (and how long is too long will depend on the nature of the business) then chances are it’s not going to progress or close. If that’s the case, take a hard look at the deal and either qualify out or move to a separate nurture stream. If I have a larger number of deals in one stage than I expect, it’s time to sort them out. Move any deals that feel ‘lukewarm’ into your nurture stream, leaving behind deals that will continue to flow through the pipeline. Don’t waste your precious time on deals that look like they’ve stalled.

3. Do I have enough leads at the first stage to hit my target? 

The top of my funnel is not my favorite place to be working – I want to be closing deals. But the top of the funnel really does require special attention. I’ve developed some regular activities that have become a habit for me, and that help to keep my funnel topped up. My early stage is called ‘ideas’ – these are people that I haven’t yet contacted but think I have a good proposition for or a good reason to call. I keep a list of these and jot new ones down when I think of them. I like to keep this list topped up – at least 20. I know that this gives me enough prospects to go after to fill the later stage of my pipeline. If a qualified lead comes in from marketing activity or the nurture stream that’s great. But if not, I have my own list I can tap in to in order to fill the pipe.

4. Do I know which deals to focus on? 

I know I won’t close every deal in my pipeline. I’d like to think I could do that, but experience tells me otherwise. In my early career I had a very scattergun approach to sales, and chased after everything that moved. Now I have a set of qualification criteria and rigorously apply these at each stage. I may not have so many deals on the go, but I know which ones to focus on and have a better idea of how many are likely to close and how many will drop out at each stage. To paraphrase classics: qualify, qualify, qualify.

5. Is my pipeline accessible and up to date? 

Let’s face it; a healthy pipeline should be open and visible to everyone involved in the sales process. We’ve got to keep it up-to-date and review it regularly otherwise it’s worthless. I’ve found that there’s often an added benefit to having a central view of the sales pipeline – a bit of healthy competition within the team. It also means that we can leverage other people’s connections, if needed. If your pipeline is clearly visible, across your business, there are fewer places to hide if you’re not updating your information or keeping on top of your stages.

Looking after sales pipeline health is equally important whether you’re running your own business or ‘working for the man’. After all, a healthy business depends on a healthy pipeline.  If you can answer yes to the majority of questions above then chances are you’re in pretty good shape.

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About Urmas Purde

Urmas Purde is co-founder of Pipedrive, maker of popular web-based CRM software. Urmas has more than 15 years of experience as a sales trainer and software entrepreneur.