Are your sales reps filling the top of the sales funnel but struggling to convert, even with strong pipeline coverage? This may indicate a common issue with pipeline health.
Key monitoring areas include insufficient coverage, data inaccuracies, and sluggish pipeline velocity, which can significantly impact sales prospecting techniques. If you’re committed to smarter lead generation, it’s crucial to understand these pitfalls and implement actionable steps to restore your sales pipeline to optimal health.
TL;DR
- Sales pipeline health refers to the condition of your sales funnel through the pipeline stages, reflecting the quality and quantity of leads.
- A healthy pipeline means you have well-distributed leads, accurate data, and a steady flow of opportunities, helping your sales team meet revenue targets. An unhealthy pipeline has blockers.
- Key issues impacting sales pipeline health:
- Pipeline bloat: When too many unqualified leads fill the pipeline.
- Pipeline coverage: Not having enough opportunities to meet sales goals.
- Outdated data: Leads to misinformed decisions.
- Pipeline velocity: Slow deal progression due to inefficiencies.
- Several common issues can negatively impact pipeline health.
- To enhance sales pipeline health, consider the following strategies:1. Diversify Your Lead Sources: Avoid purchasing cold leads; instead, expand your lead acquisition channels to include social media and other platforms rich with intent signals. For instance, LinkedIn is an excellent resource for identifying prospects who align with your ICP (ideal customer profile).
2. Data Enrichment and Scoring: Collect leads and utilize AI-driven tools like The AI LinkedIn Profile Enricher Phantom to assess their conversion potential.
3. Regular Sales Pipeline Reviews: Establish criteria for identifying inactive leads and remove them periodically. Use tools like PhantomBuster to enrich your database to ensure data accuracy. Encourage sales teams to prioritize lead quality over quantity.
4. Monitor Key Metrics: Track metrics such as pipeline coverage ratio and lead velocity rate (LVR) to maintain awareness of your pipeline’s health and data hygiene. Aim for 95-100% of deals to have accurate, up-to-date information.
What is sales pipeline health?
Sales pipeline health refers to the overall condition of your sales funnel, encompassing both the quantity and quality of leads as they progress through the sales cycle from prospect to close. It’s a vital barometer for assessing sales pipeline health and is crucial for achieving consistent sales success and meeting revenue objectives.
A healthy sales pipeline has a constant flow of qualified leads, allowing sales teams to focus on high-potential opportunities. This involves not only having a sufficient number of leads but also ensuring that these leads are of high quality and accurately reflect the target market.
A healthy pipeline reflects well-distributed leads across stages, accurate data, and a steady movement of opportunities toward conversion, ensuring your sales team can consistently hit its goals. It’s a critical measure of your company’s sales effectiveness and potential to meet future revenue targets.
How to improve your sales pipeline health
To keep your pipeline in peak condition, it’s important to adopt effective strategies that attract new opportunities and enhance the overall quality of your sales process.
Here are a few of the key strategies we recommend you implement in your sales process.
Diversify lead generation strategies
A healthy sales pipeline has to have relevant leads. Closing every deal in your pipeline is unlikely, so focus on quality. Looking for intent signals can significantly increase the quality of leads in your sales pipeline.
LinkedIn is a valuable prospecting source that can help you find prospects who interact with content related to your industry or follow key influencers.
For example, use the LinkedIn Company Post Commenter and Liker Scraper automation to find people who engage with your company on LinkedIn. You’ll only need the company’s LinkedIn URL.
Once you launch this, the automation will generate a list of leads, enriched with details on whether they liked or commented and what those comments were.
Regular sales pipeline review and updates
Implementing a strategy for cleansing and enriching your data is essential to optimizing your sales pipeline and maintaining an ideal sales cadence.
Here’s how to systematize lead nurturing practices to build a healthy sales pipeline.
Start by creating criteria for inactive leads (e.g., 60 days of no contact). You should be able to filter and report leads based on engagement in your CRM.
Next, enrich data to keep it up to date so you can remove leads that don’t qualify
For example, you can use the HubSpot Contact Data Refresher Phantom to pull fresh data from LinkedIn on your prospects and make sure your lists are up to date.
You can then use the data to understand which leads are irrelevant and choose to archive, follow up, or delete them.
Adopt lead scoring to prioritize leads
A well-defined lead scoring system helps sales teams focus on the most promising opportunities while reducing time spent on less qualified leads.
Lead scoring involves assigning scores to leads based on factors like engagement, demographics, and potential to convert.
Start by defining the criteria for scoring your leads. Consider demographics, such as job title, industry, location, or engagement with your content. Next, assign point values to each factor based on their importance. For example, a lead in a high-priority industry or a request for a product demo can receive a high score.
Once you have a list of criteria use AI to assign scores.
For example, using Phantom’s AI LinkedIn Profile Enricher, you can create customized prompts that analyze LinkedIn profiles to deduce important intelligence leads, such as their role in the company.
Once your lead scoring system is in place, ensure you develop a process for regularly removing or placing leads with consistently low scores in a nurturing campaign.
Use sales pipeline management tools
Having the right tools to manage your leads smoothly is key to keeping your sales pipeline in shape.
Sales pipeline management tools, such as CRMs and automation platforms, are crucial in maintaining and enhancing sales pipeline health.
CRMs, for instance, offer a comprehensive view of your sales activities by centralizing customer data, tracking interactions, and providing insights into lead scoring and key metrics. This enables sales teams to easily identify areas for improvement, ensuring that every stage of the sales pipeline is optimized for better performance.
Automation tools significantly streamline the sales process by saving time on routine tasks. They automate updates in your CRM, ensuring that data is consistently accurate and up-to-date.
Let’s say you’re using HubSpot. Integrate it with PhantomBuster to make your life much easier.
It will help you manage your pipeline and automate enriching leads so that everything stays fresh and relevant.
You can:
- Import data directly into your CRM (e.g., HubSpot) through PhantomBuster’s bi-directional integrations.
- Gather contact information such as email addresses and phone numbers.
- Use AI to clean your list, write personalized outreach messages and more.
Common issues that impact pipeline health and quick fixes
Here’s how to identify and fix pipeline health issues. We’ve compiled a list of sales pipeline health top enemies of a healthy sales pipeline and how to ensure they don’t impact you.
Pipeline bloat
Pipeline bloat occurs when your sales pipeline is filled with too many leads, often unqualified or cold.
Causes:
- Rushed sales and marketing teams fill a database without qualification, lead scoring, or lead enrichment.
- Sales leaders apply pressure for the number of new leads, not the quality of leads.
- The buying process is long, with excess leads picked up and not removed.
- Teams are hesitant to remove leads from the pipeline.
Solution:
- Regularly purge your database by setting clear benchmarks for lead qualification.
- Implement lead scoring to clearly define lead qualification rules. Set thresholds for removing leads that don’t meet a particular score after a specific time.
- Automate lead enrichment with tools like PhantomBuster to improve lead quality for warm outbound approaches.
- Direct your sales team to prioritize lead quality over quantity with lead scoring.
Pipeline coverage
Pipeline coverage refers to the available opportunities within the pipeline that are necessary to achieve a sales target. A healthy pipeline coverage ratio is typically 3 to 4 times the target amount.
The formula for calculating the pipeline coverage ratio is:
Pipeline coverage ratio = Total value of your sales pipeline / Your sales target
For instance, if you have $500,000 worth of opportunities in your pipeline and a sales target of $50,000, you have a 10x pipeline coverage ratio, which indicates a strong pipeline.
However, if your target is $250,000, you would only have a 2x pipeline coverage ratio, which puts you at risk of falling short of your sales goals as not every deal will close.
To hit your sales goals, you should have 3 to 4 times more opportunities in your pipeline than your target.
Causes:
- Sales teams not prospecting enough or relying on marketing campaign leads
- Over-reliance on a few big deals or suffering from significant sales cycle variations
Solution:
- Ensure sales teams add new leads to the pipeline using diverse strategies, such as self-sourcing using social media channels.
- Focus on sourcing qualified leads with intent signals from platforms like LinkedIn.
- Define lead qualification processes. Teams should regularly source and enrich the database each week or month.
Pipeline data quality and accuracy
Accurate and up-to-date data in your pipeline empowers your sales team to make informed decisions and generate reliable sales forecasts.
By maintaining high pipeline quality, you can target leads more effectively and ensure your sales strategies align with current market conditions.
Causes:
- Manual data entry errors.
- Lack of automated data updates.
- Incomplete data without enrichment.
Solution:
- Regularly audit your CRM for accuracy.
- Data enrichment tools can fix missing or outdated data due to a lack of enrichment. Use tools like PhantomBuster to update the leads in your CRM in real-time.
Pipeline velocity
Pipeline velocity refers to the speed at which deals move through the sales stages. Slower velocity often signals stagnation.
Causes:
- Internal bottlenecks (e.g., manual processes such as a need to sign off deals).
- Inefficiencies in sales processes.
- Unqualified leads are being followed up on, and progress is slowing.
Solution:
- Identify and address bottlenecks in your sales process and fix these.
- Focus on moving qualified leads through the funnel faster by improving lead qualification and using lead scores to target only the best leads.
Key metrics for evaluating sales pipeline health
Here are the top health indicators and formulas for assessing a healthy sales pipeline. Although this is not an exhaustive list of pipeline metrics, we recommend tracking at least these.
Pipeline coverage ratio
A healthy pipeline coverage ratio is typically between 3x to 4x the sales target. This means you should have three to four times the sales target in potential deals to cover those that may not close.
Pipeline coverage ratio formula: Pipeline Coverage Ratio = Total Pipeline Value / Sales Target
Lead velocity rate (LVR)
A healthy LVR generally shows 10-20% month-over-month growth, which signals strong lead generation and pipeline growth.
Lead velocity(LVR) formula: LVR = [(Qualified Leads This Month – Qualified Leads Last Month) / Qualified Leads Last Month] * 100
Total pipeline value by stage
A well-balanced pipeline will have more value in the early stages and progressively less in later stages as deals close.
Total pipeline value formula: Total Pipeline Value by Stage = Sum(Value of Opportunities at Each Sales Stage)
MQL to SQL conversion rate
A typical MQL to SQL conversion rate ranges from 13-25%, depending on the quality of leads and alignment between marketing and sales.
MQL to SQL conversion rate formula: MQL to SQL Conversion Rate = (Number of SQLs / Number of MQLs) * 100
Win rate
Win rates typically range from 20% to 30%, though this can vary widely depending on the industry and the complexity of the sales cycle.
Win rate formula: Win Rate = (Number of Closed Deals / Total Number of Opportunities) * 100
Pipeline hygiene
Monitor lead health with your overall hygiene and perform a regular sales review of data health.
A well-maintained pipeline should aim for:
- 95-100% of deals with complete, up-to-date information.
- Less than 5% of deals should be stale (i.e., not updated in a set time frame, usually 30-60 days, depending on your sales cycle length).
- Ideally, no dead leads (unqualified or non-responsive) should remain in the pipeline beyond a specific period.
Conclusion
Maintaining a healthy sales pipeline is essential to hitting your revenue targets and driving sales growth. By implementing the right sales pipeline management tools, like PhantomBuster, you can streamline lead generation, cleanse your database, and have an effective sales pipeline.
Make your sales pipeline health a top priority. Try PhantomBuster’s 14-day free trial today and enrich your leads with fresh data.
