Seven Causes — and Fixes — for a Leaky Sales Pipeline
By Vlad Voskresensky, CEO and co-founder of Revenue Grid
Even the best sales teams aren’t immune to the sneaky problem plaguing pipelines — revenue leakage. In fact, MGI research estimates that up to 42% of companies experience some kind of revenue leakage. Despite how frequently leaks occur, their causes remain challenging to identify and address.
What is revenue leakage?
Revenue leakage refers to the loss of potential or actual revenue resulting from inefficiencies in the sales process. According to EY research, every company should expect to lose up to 5% of their realized annual EBITA to leakage. But these leaky sales funnel losses impact the entire revenue team. There are, however, solutions for identifying and mitigating current leaks — and preventing future problems.
Common causes of revenue leakage and how to prevent them
Identifying your inefficiencies allows you to move forward with fixes to shore up your pipeline and recoup revenue. Let’s dive in:
1. Improper processes
Ineffective sales and marketing processes negatively affect your sales funnel, especially if they lack:
- Proper lead qualification.
- Technology utilization.
- Referral management.
- Network leveraging.
- Data tracking.
It’s not too late to prevent these process pitfalls, however. Mitigate these issues by implementing a revenue operations model aligning sales and marketing activities. If you don’t have a RevOps team yet, you can still adopt a RevOps approach with a revenue intelligence tool. This technology gives you full pipeline visibility and analyzes current and historical data so you can find and plug revenue leaks.
2. Failure to prioritize leads
Failing to assess and properly prioritize leads results in missed sales opportunities. Regain your sales potential by incorporating lead scoring into a marketing automation platform and developing personal lead prioritization strategies. Why not gamify lead activity? Studies show that gamifying processes makes 90% of employees more productive. Assign points to specific actions taken by leads and prioritize those that earn the most points.
3. Ineffective data tracking
Inaccurate or incomplete customer data leads to missed insights and subpar follow-up. Since 81% of sales reps value a connected view of data across the entire customer journey, your organization must maintain accurate and up-to-date customer information in your CRM — a strategy that prevents revenue leakage. To ensure data integrity, use automation tools to capture all relevant data and sales activities.
4. Lacking strategic lead nurturing
The absence of effective lead nurturing programs delays follow-up and creates missed opportunities. Coach your salespeople to implement strategies fostering lead development, like sending regular emails with important industry data or news, case studies or relevant videos. You can also use your revenue intelligence tool to set interactive, contextual alerts to remind your salespeople to reach out so they never miss a touchpoint. Cultivating customer connections increases engagement while elevating your salespeople above the competition.
5. Overlooking lead opportunities from referrals and partners
Your salespeople should leverage referrals and partnerships to avoid hindering revenue growth. To increase revenue and generate new business opportunities, talk to other salespeople! Take every chance to build a network of referrals and partnerships — you never know the source of your next valuable prospect.
6. Ignoring the right technology
If you really want to align your sales and marketing goals, you have to choose — and effectively use — appropriate technology. To increase efficiency, join the 79% of sales teams currently using or planning to use sales analytics technology. A revenue intelligence tool can give you real-time pipeline visibility, analyze sales data and prompt sales reps when it’s time to reach out to prospects. Further enhance your revenue operations by maximizing existing tools, advocating for preferred tools and leveraging free trials.
7. Neglecting social media potential
You can use social media or much more than keeping up with friends. Companies and sales reps failing to take advantage of social selling miss out on qualified leads and potential revenue. Leveraging social media platforms like LinkedIn Sales Navigator allows for multi-threading accounts and gaining valuable insights about potential buyers. Start conversations with prospects through their posts. Maximize your outreach by personalizing emails based on your social selling actions.
Revenue leakage may be a common sales ailment, but taking a proactive approach to addressing typical causes empowers you to repair your sales pipeline, effectively capture potential customers, reclaim revenue and protect your bottom line.