The sales funnel is a key part of sales and marketing activity, so it’s no surprise that many businesses track it to measure success.
To increase your chances of getting more conversions, you need to know what your sales funnel looks like and how customers move through it.
This is where sales pipeline activity can help.
The sales funnel focuses on the journey from the customer’s perspective, whereas the sales pipeline outlines the journey from your perspective. By aligning the two, you can identify and nurture high-quality leads from initial contact through to making a purchase.
In this article, we’ll take you through everything you need to build a sales pipeline funnel for your prospects. We’ll show you what sales funnels are, why they’re important and how pipeline activity plays a vital role in creating a successful sales funnel.
How does sales pipeline activity influence the sales funnel??
A sales funnel outlines the stages that prospects go through to become customers. It starts when they first become aware of your business and ends when you close the deal and convert them into a sale.
At the start line, the funnel often has many prospective buyers filtering into it. As the funnel progresses, the number of prospects shrinks. The further along a prospect moves in the funnel, the more likely they are to cross the finish line and convert.
At the end of the funnel, you should be left with high-quality leads that are ready to convert (we’ll cover the stages of the sales funnel in more detail later).
So where does sales pipeline activity fit into the picture?
Within each stage of the sales funnel, prospects perform certain activities. These activities (known as pipeline activities) help you identify which stage of the funnel your prospects are in.
For example, say a consumer requests a sales demo. This pipeline activity indicates they’re in the middle of the funnel, so you can identify the best course of action to move them into the bottom of the funnel.
In other words, by understanding your pipeline activity, you can better nurture leads and increase your chances of getting a sale.
Why is a sales funnel important for business success?
Let’s take a look at why the sales funnel is beneficial for your business.
Align your sales and marketing activity. The sales funnel outlines a clear process for sales and marketing teams. They can see how customers move through the funnel and what customers are looking for at each stage. As a result, both teams can make sure their activity supports the funnel.
Provide a better customer experience (and boost your revenue). Understanding how customers move through the sales funnel allows you to create a personalized buying experience. A study from McKinsey found that companies that excel at personalization generate 40% more revenue from those activities, so it’s clear that customers value a tailored experience.
Save time and effort. Instead of figuring out what email to send or which ads to promote, you can use the sales funnel as a guide to save your business time and effort. For example, if you know a prospect is at the top of the funnel, you can use an automated email sequence to nurture them further into the funnel and closer to closing the deal.
How the sales funnel aligns with your pipeline
Let’s break down the three main stages of a sales funnel and how they align with the sales pipeline.
Awareness and discovery. In the first stage of the funnel, your prospects are starting to learn more about your product or service. Pipeline activities during this stage typically include engaging with your content, looking at your landing pages and clicking on an advertisement. This will be your largest pool of prospects. As they learn more about your company and move through the funnel, it’s normal for some prospects to leave the funnel.
Researching solutions. In the middle stage of the funnel, prospects start to show more interest and engagement with your company. Pipeline activities in this stage might include reading case studies or browsing your product or services page. Leads at this stage have probably made the decision to buy, they just need to decide who to buy from. Your content should show them how your product or service can solve their problem and why you’re a better choice than competitors in the market.
Make an educated purchasing decision. In the bottom stage of the funnel, highly-qualified leads will make their final purchase decision based on the best solution for their pain points, budget and goals. Activities in this stage might include reviewing your pricing page and contacting you directly for more information. This stage can involve negotiating with the prospect to prevent them from making a purchase elsewhere.
We’ve covered some examples of pipeline activities in each stage of the sales funnel, but these activities aren’t definitive. You might have different activities that signify where your customers are in the funnel.
For example, say a prospect starts following you on social media. For your business, this activity indicates they’re at the top of the funnel. For another business, this might signify that they’re moving through the middle of the funnel. It all depends on who your customers are and how they move through the sales pipeline.
How to build an effective sales funnel based on pipeline activity
Follow these six simple steps to build an effective sales funnel that will nurture leads and convert prospects into paying customers.
1. Choose the right sales management platform
A sales management platform (also known as a sales CRM) is a system that manages your sales process. It allows you to manage leads, track deals and help your sales team work together to drive sales forward.
To create and manage your sales funnel as effectively as possible, choose a sales management platform that’s right for your business.
If you’re not sure what this looks like, here are some key features to look out for:
Pipeline activity management. To offer customers the best experience possible, you need to organize and track your prospects based on their sales pipeline activity. For example, if you know that a customer has asked for more information on your website, you can use your sales CRM to follow up with the relevant information.
Automation. Streamline your entire sales management process with automation. Send follow-up emails, segment your prospects based on their pipeline activity and set reminders for sales reps to reach out to high-quality leads.
Deal tracking. Keep up to date with deals in real time to make sure no one falls through the cracks. Visualize how they’re progressing through the sales funnel and identify areas where you can offer support and guidance to nurture them into a conversion.
Insights and reporting. Analyze your sales performance and monitor the success of your pipeline activity with detailed insights and reports. Use this information to inform your future sales activity and provide customers with the best possible experience.
Having all of these features in one easy-to-use tool will simplify building and managing an effective sales funnel. Look for a solution that meets all your needs.
With Pipedrive’s sales software, you can track deals, create custom reports and automate key elements of your sales management process. You can also organize and track prospects by their pipeline activity (more on this later).
2. Identify your target audience
You need to know who your audience is for two reasons:
To create a sales funnel that accurately reflects the customer journey
To understand the pipeline activity they perform throughout the sales funnel
If you’re not sure who you’re trying to target, don’t worry. There are a few ways to pinpoint your target audience.
Conduct market research. There are two ways to use market research to find your target audience. The first is to look at secondary data, which involves reviewing existing reports and studies about the marketplace to identify who you should be targeting. The second is to review primary data, which means running your own studies to pinpoint your target audience. For example, you might run a focus group (you’ll need a facilitator to run this) or launch an online survey to see who you should be targeting.
Perform a competitor analysis. Take a look at what your competitors are doing and who their customer base is. This will give you an indication of who you should (or shouldn’t) be targeting.
Create a buyer persona. A buyer persona is a fictional character that represents your ideal buyer. The persona will outline your target audience’s demographics, their pain points, their goals and their online behavior.
3. Establish your sales pipeline activity
To accurately track how your prospects and leads are moving through the sales funnel, you need a clear picture of your pipeline activity. Then you can easily recognize how customers are progressing based on which activities they complete.
Here’s how you can outline the different pipeline activities for your sales funnel:
Outline all pipeline activity. As a starting point, make a list of all the pipeline activities that your customers perform. Take a look at how existing customers engage with your business. Do they send you emails? Comment on your social media posts? Visit your website? All of these activities are part of the sales pipeline, and they all have a place in the sales funnel.
Assign each pipeline activity to a stage in the funnel. When you have a clear picture of all the pipeline activity, you can assign each activity to a stage of the sales funnel. For example, asking for more information on pricing indicates a prospect is at the bottom of the funnel and close to converting into a customer.
If you’re using a sales CRM like Pipedrive, you can automatically categorize prospects and leads based on their pipeline activity. This allows you to review their pipeline activity and see how far along they are in the funnel.
4. Determine stage-to-stage qualification
Once you establish your sales pipeline activity, you now need to focus on stage-to-stage qualification.
Stage-to-stage qualification (or lead qualification) involves deciding which potential customers are more likely to convert. For example, prospects that regularly visit your website and add items to their cart are more likely to convert than prospects that don’t.
In the context of a sales funnel, outlining your stage-to-stage qualification means setting certain criteria to determine if the lead should progress. Let’s use the awareness and discovery stage as an example. Here are some criteria to look out for:
Following your business on social media channels such as Facebook, Instagram and LinkedIn
Visiting your website (ideally more than once)
Signing up for your email newsletter
If a prospect doesn’t meet these criteria, chances are they’re not worth pursuing.
You should only move a deal onto the next stage of the funnel if they meet the lead qualification criteria.
Moving unqualified leads forward, or keeping those leads in the funnel at all, wastes time for you and the consumer. It also prevents you from giving attention to other, more winnable deals.
5. Create specific content for the stages of the funnel
To support each stage of the funnel, you need to create content that’s tailored for each pipeline activity. That way, you can nurture prospects from one stage to the next, providing them with a unique and personalized experience.
Let’s look at creating new landing pages as an example.
When a customer is trying to find out more about your business, you want to show them how your product or service can meet their needs.
To do this, you can create a specific landing page on your website that outlines the following:
How you address customer pain points
Why a customer should choose you over a competitor
Case studies or reviews from other customers
By creating this landing page, you are providing prospects with the information they need to make an informed decision. You provide them with a better experience because they don’t have to go digging to find this information – it’s all readily available in one palace.
Other examples include designing paid ads, creating email marketing campaigns and writing blog content to nurture leads at each stage of the funnel.
6. Set SMART goals to measure success
Setting goals is an important part of managing your sales funnel and tracking pipeline activity. It sets a measurement for success and helps you track progress as prospects move through the funnel.
You can create different goals for specific stages of the sales funnel and for your sales funnel as a whole. For instance, you might create a goal that tracks how many people visit your website (pipeline activity goal). You can also create a goal that focuses on the number of closed deals (sales funnel goal).
To set clear and measurable goals, we’d suggest using the SMART framework.
SMART is an acronym for Specific, Measurable, Achievable, Realistic and Time-based. Using these pillars, you can set effective goals to measure progress and success within a certain time frame.
For example, you might set a goal example like:
Ensure 5% of all prospects from the top of the funnel make it through to the bottom of the funnel within three months by using sales pipeline activity to nurture them.
Collaboration is also important during this phase. You can use the SMART goal-setting process to bring sales and marketing teams together and ensure their efforts are aligned. Setting SMART goals together as a team-building activity (or as an icebreaker if the teams haven’t worked together before) will put team members all on the same page and strengthen the team dynamics.
When your SMART goals are in place, use them to keep track of how your sales funnel is performing. Over time, you might need to update the funnel (and your sales pipeline activity) to maximize your ROI and provide a better customer experience.
Final thoughts
When done well, sales funnel management is a great way to better understand your customers and what they want from your product or service. Along with understanding and tracking your sales pipeline activity, you can nurture prospects from their initial contact with your business through to closing the deal and making a sale.
To effectively manage your sales funnel (and the entire sales process), take a look at Pipedrive’s interactive CRM. On top of managing your sales pipeline activity, our software allows sales teams to track deals in real-time. Try it for free today.
