How to Build a Sales Pipeline for Your SaaS Product
Do you ever feel that your sales process is much harder than it should be?
As a startup founder, you have to juggle a lot of different balls every day. You have to think about your product, customers, employees, finances and more.
You probably also spend a lot of time thinking about to grow your business and how to generate more leads and sales every month.
Maybe you’ve already got some early traction with your marketing and are seeing a steady stream of new leads through content marketing or email outreach.
But does your sales process still feel like it's not working well?
Perhaps it's because the information about your new leads is all over the place? Or the leads aren't being followed up with on time? Or even worse, maybe some leads are going into a black hole and being forgotten about until it's too late.
The good news is that your sales process doesn't have to be that chaotic. And it doesn't take a lot of work to fix this situation pretty quickly.
In this post, I'm going to show you how to build a sales pipeline for your SaaS product. With the right process and tools, you can start generating more predictable sales with fewer headaches.
What is a Sales Pipeline?
A sales pipeline provides a visual snapshot of your sales. And it helps you understand how likely you are to close deals in the coming week, month or quarter.
It’s a way for you to quickly know where in the sales process each of your sales leads currently is and what needs to happen to move them to the next stage of the sales process and eventually to a sale.
Every company will have different stages in their sales process, but most will have at least these five stages:
1. Prospecting – At this stage of the sales process, you've identified someone who's interested in your product. They may have signed up for a free trial, or you may have had an initial email or phone conversation with them.
2. Qualification– At the next stage of the sales process, you're verifying that the prospect has a need for your product, that they see the potential value for your product and that that they have the budget.
3. Needs Assessment – At this stage of the sales process, you're making sure that the qualified prospect has a business pain that they are actively looking to solve and that your product will help solve their pain.
4. Proposal – At this stage, you're providing a proposal and getting a contract signed. Or you're taking someone who has signed up for a free trial and getting them to upgrade to a paid plan.
5. Deal – The final stage of the sales process is when you're qualified prospect signs a contract or provides their credit card information to upgrade to a paid plan. This is when your deal is won.
How to Build a Sales Pipeline for Your SaaS Product
Every company's sales pipeline will look different. For example, for my SaaS product, a podcast publishing tool, the stages look like this:
1. Prospect – a new lead visits the website and opt-in for a free email course for podcasters or requests an invitation for the product.
2. Qualified – next we verify that the prospect fits our ideal customer profile, has the budget and sees value in the product.
3. Needs/Demo – next we schedule an online meeting to demo the product and determine if the prospect has a pain that our product can solve.
4. 30-Day Trial – at this stage, the prospect provides their credit card information and signs up for a 30-day trial of the product.
5. Closed/Won – the prospect continues using the product after 30 days and becomes a customer.
Now this is a simplified scenario for a SaaS product that has a very ‘light touch' sales process.
The sales process for your SaaS product may involve a lot more steps e.g. you may need to meet with prospects, submit proposals, get contracts signed, etc. And all those steps should be reflected in your sales pipeline.
Follow these steps to determine what your sales pipeline should look like:
1. Start by thinking about the buying process from the perspective of your customers i.e. what are the main decisions your prospects need to make during the process before they buy from you?
2. Review the buyer's journey to help you think through how buyers go from realizing that they have a pain which needs to be solved, to eventually making a purchase.
3. Think about what deliverables you need to provide prospects during the buying process e.g. product demo, needs assessment meeting, proposal, contract, etc.
4. Map what you've listed from the previous three steps to stages of your sales pipeline. Get feedback on these stages to help you identify gaps or potential issues.
Your sales pipeline probably isn't going to be perfect right away. It will take some work to refine and tweak the stages as you take real prospects through the pipeline. So plan on revising the stages in the first 30 days.
Define Your Success Metrics
One important thing I've learned about building a sales pipeline for your SaaS product is that it’s all about math. And as a geek, it makes sales less scary for me.
There are few metrics that everyone on your team should understand and track:
1. Conversion Rate – How many new leads do you need to close a sale? For example, if for every ten new leads, you close one deal, then you'd have a 10% conversion rate.
2. Sales Goal – Next you need to figure out how many sales you need to meet your revenue goal each month. Let's assume that you want to get at least 100 new sales every month.
3. New Leads – Now you can calculate how many new leads you need to close 100 sales every month i.e. at a 10% conversion rate, you'll need 1000 new leads each month.
For me, this makes it a math problem and less of a sales problem.
You still have to figure out how to get those new leads every month, but by taking this approach, you have a data-driven and measurable sales process.
Develop a Daily Routine for Getting New Leads
As an early stage startup founder, you might also be ‘the sales guy.' And from what I’ve learned, that’s not a bad thing in the early days — it can be an advantage.
No one will evangelize the product like you can. And by getting in front of your prospective customers, you'll learn so much more about what they need and how to make your product better.
Or perhaps, you’re further down the road and have hired one or more sales people.
Either way, you need to establish a daily routine for filling your pipeline with new leads. This could involve making more sales calls or emailing more potential leads every day.
Whatever activities you decide to do, it's important that you do them regularly and consistently. They need to become a daily habit.
What can you start doing more consistently to get new leads?
Set Goals to Keep the Pipeline Flowing
Regularly filling your sales pipeline is critical. But you also need to keep those leads moving through the stages of your sales pipeline and eventually to a sale.
Firstly, you should identify the activities that you need to do regularly to keep your sales pipeline flowing.
For example, how many new leads will you qualify every day? How many meetings will you schedule every day with qualified prospects? How many proposals will you send every week?
Setting daily and weekly goals for these activities is helpful.
Secondly, you should have a clear next action for every lead and prospect in your pipeline.
For example, when will you follow up with someone if they haven't gotten back to you yet? Should you schedule a phone call or in-person meeting with someone? When will you schedule that meeting?
If a lead or prospect doesn't have a next action, then there's a risk that they will be forgotten. You may lose momentum, and that prospect may find another solution.
Or worse, the prospect could go into a black hole and be forgotten about, until it's too late.
By establishing daily and weekly habits to keep your sales pipeline flowing and ensuring that every prospect has a next action, you'll be much more likely to achieve your sales goal.
Don't Put Sales and Marketing in Silos
Although this post is about building a sales pipeline, it's important to point out that sales can't be successful without marketing and vice versa.
Your sales efforts might be generating a steady stream of leads, but a significant portion of your new leads will also likely come from your marketing e.g. organic search, paid advertising, content marketing, etc.
And so your efforts need to be coordinated between sales and marketing. As they say, the left-hand needs to know what the right-hand is doing.
A lot of new leads may not be ready to buy yet, and through marketing, you can keep nurturing those leads until they're ready to start the buying process.
So instead of treating those-those two areas as separate silos, think about how you can create an integrated sales and marketing pipeline.
Using a CRM to Manage Your Sales Pipeline
In the early days of a startup, you can probably track information about your sales pipeline in a spreadsheet, But it’s going to get out of control very quickly.
The best way to keep track of this information is to use a CRM system and one that’s designed to help you quickly build a sales pipeline.
With the right tool, you’ll be able to quickly implement your sales pipeline and spend less time worrying about what’s happening to each lead.
By building a sales pipeline, you can take a methodical and data-driven approach to sales.
You know exactly how many leads you need every day, month, etc. And you know what actions you need to be taking every day to move leads to the next stage of the pipeline.
Most importantly with a sales pipeline, you can do a much better job at finding and qualifying the right customers for your product and closing more sales.