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Risks in the Sales Pipeline - How do to minimize them?

October 12, 2022

Sales Strategy

Risks in the Sales Pipeline - How do to minimize them?

There are always risks in the sales pipeline, but there are ways to minimize them. Here's what you need to know to protect your business.

Sales Pipeline, Risk Management, Risk Level, Risk

Risks in the sales pipeline arise when there's a lack of understanding of the ideal sales process. Sales team members may not perform suitable activities with the most profitable customers and prospects. This results in unpredictable outcomes. Their sales activities generate a steady stream of sales leads. There are conversion rates and a yield at the end of the sales process as deals move from one pipeline stage to the next in the sales process. It is not fixing the relationships between these flows, cycle times, conversion rates, and results."

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Building a sales pipeline is essential, but the sales and revenue teams regularly need to analyze the pipeline's health, including risks in the pipeline. This analysis allows the teams to keep the pipeline healthy, identify potential risks, take the required steps to minimize them, and avoid future risks.

Risks in the sales pipeline can include stalled deals, lost opportunities, inaccurate forecasting, and poor lead quality. By identifying and mitigating these risks, sales and revenue teams can improve their performance, increase revenue, and build a more sustainable business.

Dealcode's AI Guided Selling Software helps you reduce risk in your pipeline. Get to know our product now for free.

Why Identify and Reduce Risk in the Sales Pipeline?

Risks in the Sales Pipeline - Stages of a Sales Pipeline
Stages of a Sales Pipeline

When a sales team defines and documents its sales process, sales managers must monitor several factors. This includes opportunity flows, cycle times, conversion rates, and yields to identify opportunities. Therefore, improvements and detection of negative changes early.

There are numerous advantages to minimizing risks in the sales pipeline. Focusing on pipeline weaknesses, including risks in the pipeline, to improve them can:

  • Assist the sales team in improving their initial prospecting efforts and concentrating on the most promising opportunities likely to close.
  • Ensure that sales reps and managers identify and address at-risk deals early in the sales process. So as to gain more long-term pipeline visibility.
  • Give a more accurate sales forecast.
  • Make opportunities for rep coaching available.

Companies that do not reduce risk in their sales pipelines will experience inaccurate forecasts, a lack of pipeline visibility, and an overall no healthy pipeline that produces an unreliable revenue stream.

The businesses will be unable to grow or plan for the future in the best-case scenario. In the worst-case scenario, hence not being able to survive.

What are the signs that your Pipeline is at risk, and how to prevent them?

B2B sales, including risks in the sales pipeline, are becoming increasingly competitive; the landscape has dramatically changed in recent years. The market's new entry points and increased ways to connect with prospects. Therefore they are pushing sales teams to achieve more with greater efficiency.

There is no activity.

The absence of any action on an opportunity is one of the most telling signs. Identifying the reason for the lack of engagement or activity can be time-consuming for the sales rep assigned to the prospect. There could be some reasons for the lack of activity, such as poor lead quality or stalled deals. One possibility is that reps have not updated the CRM with the action that has occurred, which is easily remedied by incorporating tracking systems. However, this can be a significant problem if reps have not followed up. Your team should follow up on every lead, including identifying risks in the sales pipeline; if they don't, it can lead to fewer closes and you missing quota.

There are no upcoming tasks.

Keeping the sales pipeline moving, including risks in the sales pipeline, requires sales reps to make new connections and prospects constantly. If no future activities or meetings are scheduled, this is a sign of stalling, putting your pipeline at risk. Simple activity automation tools can assist in identifying gaps in future task planning, including risks in the sales pipeline. Tracking sales activities is critical to understanding the overall health of a sales pipeline. It allows sales teams to identify at-risk accounts and determine whether reps need to focus on specific tasks or be redirected to new opportunities. Sales teams can minimize risks and keep their pipelines healthy by staying vigilant and proactive in tracking activities and addressing potential issues.

Low Participation

Gartner estimates that 76% of all sales emails are not read. One of your crucial pipeline metrics for understanding the health of your pipeline is prospect engagement. Hence, identifying which accounts are progressing and which are not by tracking activities between the sales reps and prospective customers. Therefore, the greater the number of engagement points between the two parties, the more it reveals which customers actively engage with the reps and which are not. The location of the lack of engagement will determine where your issues are and whether it is worth the resources to re-engage.

There aren't Enough Relationships.

Relationships are well-known in B2B sales; if you don't have enough connections to a target account, you're unlikely to connect with the right people who make the decisions. You can see where you have links to target accounts by mapping your internal network of contacts. You can identify which reps have connections to target accounts and determine whether they can use them to increase your opportunity's win rate.

Pipeline Stages are too long.

The time an opportunity has remained in your sales pipeline is a major red flag. You can quickly identify deals that are stuck in the funnel by looking at the number of days it has been in that stage. This knowledge allows you to devise a strategy for moving forward or, if necessary, cut your losses and reallocate resources. As sales cycles lengthen, it is more important to recognise when an opportunity has stalled and take corrective action. Determine why a deal is stuck in a stage for so long—determining why is the answer to moving that deal forward and reveals weaknesses in your sales team. Ideally, your customer's journey through your pipeline should be simple and easy to complete; you want to identify and reduce roadblocks quickly to reduce risk.

Reduced Deal Value

Your value must rise for your pipeline to grow, which means your average deal value/size must increase. If your deal values are declining, your pipeline growth will slow and may become unprofitable. A deal's value can change for various internal and external reasons, such as pricing or reactions to competitive environments. However, a downward trend can throw your forecast off track, causing ripple effects throughout the business. You can detect when this occurs by using trending data.

The Closing Date being Postponed

When forecasting quota, having a deal move out of the current quarter can be a real problem for many sales leaders. Furthermore, if many deals fall through, you may not meet your quota, forcing you to scramble to push deals up or find new ones to ensure you meet your quota. When looking at risks in the sales pipeline, Understanding why a deal has been delayed is important. It allows you to start incorporating factors into your forecasting that will balance these out.

The Stage has been Repositioned.

Similarly to pushing out a close date, moving a deal back, a stage can significantly impact your pipeline. There could be several reasons for a deal to be pushed back a stage:

  • a rep may have been overly confident,
  • problems with the customer may have arisen,
  • or engagement issues.

You can help them get back on track by identifying and resolving these issues or coaching the rep on when deals should be moved forward. Therefore, eliminating the risks in the sales pipeline.

Add-on

When you look at Dealcode, the Risk Level of a deal is a crucial figure in this AI Guided Selling Software. It indicates the degree to which the closing of a deal is at risk. The higher the risk level, the lower the probability of closing. Along with other factors, the risk level is an essential criterion for determining whether a deal should be ignored or closed as soon as possible before it is lost. Dealcode uses AI to let you know the deals at risk in your pipeline, reducing the time-consuming task of the sales rep monitoring these deals. Dealcode can help businesses identify and reduce risks in the sales pipeline,

Conclusion: Risks in the Sales Pipeline

In summary, the risks in the sales pipeline are numerous and can significantly impact the success of a business. Sales teams must regularly analyze the pipeline's health and identify potential risks, including stalled deals, lost opportunities, inaccurate forecasting, poor lead quality, and low prospect engagement. By focusing on pipeline weaknesses, sales teams can improve their initial prospecting efforts and concentrate on the most promising opportunities.

Furthermore, with Dealcode's AI Guided Selling Software, businesses can not only identify and reduce risks in their sales pipeline but also gain valuable insights and reduce the time-consuming task of monitoring deals. Therefore, with the right tools and strategies in place, businesses can effectively minimize risks and build a more sustainable and profitable sales pipeline for long-term success.

Try our Sales AI Message Generator today! See how it can help your sales team engage prospects. Therefore, moving them through your sales pipeline with greater efficiency and success.

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