Digital Sales Framework
The foundation of effective industrial sales is the definition, management and optimization of the opportunity pipeline. If a business can’t build a growing, sustainable pipeline of opportunities and competitively win deals, no other sales and marketing efforts matter.
The financial impact of pipeline management is dramatic. For example, the average HIT rate for industrial companies is 20%. Therefore, a 10% increase in HIT rate to 22% will increase revenue by 10%. Similarly, a 10% increase in new customers will increase revenue by 10%. Combined, the 10% increases in HIT rate and new customers will increase revenue by 21%.
There are many unique versions of the industrial sales pipeline but in general, there are four major stages. The first three stages relate to acquiring new customers. These stages are: Generating leads, developing opportunities, and closing deals.
The fourth stage is the proactive management of existing accounts. This is typically labeled “account management,” and focuses on retaining existing accounts, securing ongoing business and introducing new products or services.
Developing and optimizing an active deals pipeline is the only way to meet sales targets, forecast accurately and continuously improve HIT rate. The sales pipeline stages must be aligned with the unique characteristics of the buyer’s process.
The industrial buyer or buying team depends more and more on digital information, either as part of a search process or as part of an evaluation/decision process. The digital sales framework (Figure A below) illustrates the conceptual model of an industrial sales pipeline. Every company will have some unique version of this structure, but the key sales process and tools are the same.
Many of these digital sales tools are well understood, but the pipeline optimization framework was developed to show where and how they are used. Some of these tools can be used in multiple stages of the pipeline – depending on the specific buyer’s process and the nature of the product or service being sold.
Figure B, below explains the major functions of these sales tools: