What Makes Your Industry’s Sales Pipeline Unique?
The right way to sell is always going to depend on what you’re selling. But how, exactly, do sales pipelines differ across industries? What does a real estate firm do differently than a software development company? Or a bank?
We wanted to know. And with 50,000 customers using our sales management tool in very different ways, we knew we could find out.
We’ve always believed in the importance of customization, letting our customers build pipeline stages to suit their own sales approach. Tapping into this data, we’ve been able to analyze user preferences – and pipeline characteristics – from industry to industry.
Here’s what we found.
Industry to industry – what’s different?
All industries start the sales process the same way, by contacting a lead. No surprises there. But after that, behavior begins to split, and things start to get real interesting.
Before you skim ahead, a word of caution. Even when pipeline stages look familiar, they may be founded on dramatically different reasoning. Give us five minutes, and we’ll make sure you get the full picture.
The basic sales pipeline
To start with, let’s look at a basic sales pipeline, and its five stages.
- Lead In – The starting point for all your leads, however you’ve accumulated them.
- Contact Made – Moving a lead to this stage marks initial contact, whether it’s by phone, email or a DM on Twitter.
- Needs Defined – If that first contact results in an understanding of the lead’s specific needs, ideal, you can move them straight onto the next stage, ‘needs defined’.
- Proposal Made – Proposed a way to meet those needs? This is where your lead goes while you wait for negotiations to begin.
- Negotiations Started – This stage is for use when, and only when, you’ve started talking about the finer points of a deal. (That gap between ‘proposal made’ and ‘negotiations started’ is invaluable when it comes to seeing which leads are sailing towards conversion, and which need a little extra attention.)
This pipeline is the basis of every sales process. It’s so fundamental to commerce, even young children understand it. Just think of girl scouts selling cookies. They locate a lead, they find out how many cookies they want (AKA defining their needs), they propose a price, and begin negotiating.
This essential structure recurs time and time again in commerce, whether you’re selling cookies or consulting services. What’s fascinating is how it mutates. Let’s look at our first industry.
Software and App Development
When you’re developing B2B software and apps, understanding your customer’s needs is rarely enough. Companies want proof of your ability to meet them upfront. Hence, Needs Defined gives way to Demo Scheduled.
Beyond this, the sales process sticks close to our default flow, though given the high stakes involved in such sales, further meetings or demonstrations may well be added as separate activities.
In the healthcare industry, the third stage normally becomes Follow Up Scheduled.
Due to the complexity of these sales, a lead’s needs might be tough to define during, or even soon after, initial contact. The ‘follow-up’ in question might involve the salesperson running the lead through a draft proposal or the lead feeding back on suggested products and services.
Adding this Follow Up Scheduled stage helps to separate relatively new leads from those with which you’ve shared multiple discussions. As before, the pipeline then flips back to the default flow.
While we found this follow up stage to be most prevalent in healthcare industry, this stage can be found in any sales process where competition is intense, and deals are high value.
Look familiar? Tech startup and software and app development industries have an identical pipeline. Here, during the Demo Scheduled stage, knowledge, plans and ideas are all showcased to the customer. Following a successful demonstration, the natural flow resumes.
Much like the software industry, tech startups need to demonstrate value. And that’s knowledge we have firsthand. Our own salespeople regularly conduct demos, giving leads an in-depth look at our products and services, as well as the chance to raise any queries or concerns. For us, this stage doesn’t just offer a vital opportunity to show what we can do, it lays the foundations of our proposal.
Education and Training
In Education and Training, the industry specific sales stage is Meeting Arranged. Our research shows that, in this industry, success is hugely dependent on being able to accommodate a customer’s individual needs.
As such, buyers will almost always want to meet the seller beforehand. The smartest sellers seize this opportunity to bond, digging deeper into what buyers want and need, while providing finer detail on their education and training services.
OK, now things start to get a little more niche. Unlike the industries we’ve featured so far, a real estate sale has at least three parties involved – the property owner, the future buyer, and the real estate agents themselves.
The result? A huge spanner in the traditional pipeline. After our first, universal steps, everything changes.
First, we have a Property Evaluated stage, in which – you guessed it – the agent evaluates the property, gathering all the details needed for a listing. As soon as the property is up in the window – whether the window’s on a street, or on a screen – the lead can be moved to another new stage, Property Listed. Once the property attracts interest, it’s shifted to Showings Scheduled. Next up is Proposal Made, for when a potential buyer has made an offer, and finally, Under Contract, for when the seller accepts.
When you’ve a sales pipeline this complex, a flexible CRM is especially helpful. Ours is designed to let real estate agents get a rapid overview of their scheduled showings, as well as background information to assist with the deal. It even lets you keep selling and burying processes separate, if that’s how you work best.
The right CRM can also make sure leads don’t slip down the cracks between stages. If a proposal is rejected, for example, ours will automatically bounce the relevant lead back to the ‘showings scheduled’ stage.
Creative (Web, Advertising, Video)
Creative agencies typically employ two industry specific stages – Meeting Arranged and Needs Defined. As an industry that leans heavily on personalization, meetings are a must to iron out client expectations from the project, product or service – especially if there’s a risk crucial details may get missed over phone or email.
Our research suggests the Needs Defined stage really helps sellers find the time needed to make a customized proposal – so if you’re a creative agency, and you haven’t got this stage yet, it might be a crucial addition to your process.
Financial or Credit Services
Another highly industry-specific pipeline, but this one is easy enough to follow: Application Submitted highlights the point where a customer hands in an application for the service. Following submission, the application moves to an underwriter for approval. Successful applications are then kept separate under Application Approved. Finally, Terms Presentation is exactly what it sounds like – and the final step to closing the deal.
It’s a unique process, especially when you consider that many of the actions it represents require engagement from people outside of the sales department.
Take a loan application, for example. A salesperson will assist you as you fill it in, but then it’s off to a third party – the underwriter – to decide if you’re eligible, and on what terms. This decision could see a lead being sent back one stage, for revisions, moved forward a stage, or taken out of the pipeline entirely. And it’s dealing with that kind of complexity that, once again, demands a great CRM.
News, Media and Publications
The sales process for News, Media and Publications follows more familiar, tried and tested steps.
It begins, as always, by contacting a lead to offer them your products or services. But procurement in this industry typically involves a heap of decision makers, and a sale is never made with a single call. A well-timed follow up allows the customer to consider and discuss their specific needs.
OK, cards-on-the-table time: our research found that manufacturing pipelines vary greatly depending on the processes involved, and degrees of product customization. So much so, that identifying a typical pipeline for the industry proved impossible.
If you’re in manufacturing, you’ll almost certainly want to start with the basic pipeline pictured above, then adapt it to suit your needs. For example, if a salesperson makes contact and schedules a meeting, the production team needs to know about it. In that case, they could add a stage called “Production Team Informed,” that way the production plan can start or change depending on how far along they are in the deal process.
In the world of IT services, not all lead contacts will make the cut – hence the Prospect Qualified step above. Those who do will get their Needs Defined. For a cloud storage provider, those needs can be anything from the number of terabytes their potential customer needs right now to how they want to scale up in future. This knowledge is invaluable when it comes to tailoring the proposal, and successfully moving to negotiation.
It’s a concise pipeline and once again shows the power of clear stages to tame otherwise complex sales.
That’s right – it’s the same pipeline used by Creative Agencies. Why? At heart, they’re both in the business of professional services.
Consultants typically have a wide variety of service offerings, from long-term business strategy planning to delivering one-off projects. This sales pipeline, with its Meeting Arranged and Needs Defined stages, allows consulting service providers to sell a diverse range of engagements within the same structure.
As we’ve seen, pipelines can vary drastically from industry to industry – and within industries too. The best are always the most closely tailored to your individual organization and its products, services and customers.
But designing your perfect sales pipeline from scratch can be tough. If you find yourself seeking a little inspiration, give us a call. And, of course, never fear breaking away from the basics. If there’s one thing our pipeline research proves, it’s that customization is king.