Most small businesses generate their first customers through informal channels. For example, most small businesses get their first customers through more social connections, such as former colleagues who are still working in a similar industry, or through positive word of mouth from your first satisfied customers.
This approach works quite well in the early stages, but there’s a limit. You quickly burn through your address book. And any colleagues or friends who might be interested will likely do business with you in the first few months. You’ll also attract attention though positive word of mouth, but that can only spread so far.
You can’t increase these organic types of sales either. They’re highly related to your relationships and your environment. When a business depends entirely on referrals, revenue becomes unpredictable, because there’s no way to generate more customers.
The solution is to build a repeatable pipeline, which creates a process that can accept a growing number of leads systematically.
Defining sthe Stages of a Deal
To create a repeatable sales pipeline, you need to first understand the stages of a deal. Many small companies skip this step, which makes it impossible to measure or improve anything later on. A terrible mistake in a world increasingly dominated by powerful machine learning algorithms.
A reasonable set of deal-making stages for a business-to-business company is as follows.
● A new lead is identified.
● The lead is qualified.
● A discovery conversation takes place.
● A proposal is sent.
● The terms are negotiated.
● The deal is marked as either a win or a loss for the company.
Each of these stages needs to have a clearly defined exit. In other words, it’s clear when a deal moves from one of these stages to the next.
An example of a real definition is that a lead shouldn’t be marked as qualified until the salesperson has confirmed that the prospect has the budget to accommodate a purchase. Vague definitions will just hurt your ability to forecast sales in the future.
Section two: Generating leads deliberately.
Once these stages are defined, a company needs a reliable way to bring in new leads rather than waiting for referrals. There are three general sources of new business.
● Inbound inquiries.
● Referrals.
● Outbound outreach.
The company needs to use B2B data to proactively contact potential customers who haven’t yet expressed interest. The first two sources are reactive, meaning that your company has little control over how often these things occur. But outbound outreach is something that you can control. You can increase your outbound efforts, but that requires a list of the right people to contact.
To create the list of potential customers, you need to have a clear impression of the ideal customer type. This might be someone who actually exists, but it will likely be hypothetical. Figure out who ticks an impossible number of boxes. The more specific you are at this stage, the better.
For example, vague statements such as “companies that need help with their marketing” should be avoided. Instead, you should specify the granular details, such as the following:
● The industry.
● The company and the number of employees.
● The range of annual revenue.
● Geographic location.
Any relevant events happening with the company, such as recent fundraising.
Fix Your List Before You Fix Your Pipeline
Remember that contact information gets outdated fairly quickly since people change jobs fairly frequently, so you should verify emails before sending messages. A high rate of bounced emails can damage your sending domain’s reputation, causing future emails to be filtered into spam folders, so it’s really not worth it to spam customers’ inboxes.
There are also regulations such as the General Data Protection Regulations from the European Union. Canada has its own anti-spam legislation covering unsolicited commercial messages. The penalties for getting any of this wrong can be substantial. The United States has its own version of these rules in the CAN-SPAM Act. Always make sure your email communications are in full compliance with the law.
In an increasingly uncertain economy, it pays off to make things more predictable, and while global shipping routes and trade tariffs are hard to predict and plan for, with a repeatable pipeline, your sales become more forecastable and trackable.
Building a Repeatable Pipeline
A repeatable sales pipeline turns growth from something that happens through luck and personal connections into a process the business can thrive and grow. Referrals will always have value, but they can’t provide predictable growth on their own.
If you’re interested in similar topics, see our other articles for more.
