Every subscription company needs to make the most of its sales opportunities. Recurring revenue ensures that your business thrives, so maximizing your subscription sales pipeline is essential.
Once you’ve taken potential customers through the sales funnel, and they’ve committed to spending money on recurring products or services, you need to make the transition from intent to contract and payment as quick and as efficient as possible.
Here’s how to do that.
The Difference Between a Subscription Sales Funnel and a Subscription Sales Pipeline
Before we get into the details of the pipeline, it’s worth briefly exploring the difference between that and your sales funnel.
Subscription Sales Funnel
A sales funnel is a marketing tool, designed to turn potential customers into paying clients. It uses content marketing, promotions, and advertising to identify customer pain points, explain how the product or service can help, and encourage customers to sign up. Essentially, it’s everything that happens between a curious reader finding out about your product or service to them saying, “I’ll try this out.”
Subscription Sales Pipeline
The sales pipeline starts where the funnel ends—turning an interested, semi-committed customer into someone paying you revenue every month. This may involve converting them from a trial to a paid subscription, understanding who are the decision makers and influencers, going through a needs assessment, meeting, following up, making an offer, negotiating terms, getting a contract signed, and taking payment.
Analytics and Customer Relationship Management in Your Subscription Sales Pipeline
You need to combine two vital areas to make the most of your subscription sales pipeline—data and relationships.
- Data: You need robust analytics to understand how customers are moving through your sales pipeline so you can identify what’s working and what’s not. This will help you refine your sales approach and ensure you’re managing relationships according to the right information.
- Relationships: Getting from lead to payment is all about carefully managing relationships. A Customer Relationship Management (CRM) tool will track all the states between initial interest and final sale and will be invaluable to conversion maximization.
Let’s dig into how to maximize each part of the subscription sales pipeline.
Establish Initial Interest from a Potential Customer
A potential customer can show interest in a few different ways:
- Signing up for a free trial period.
- Requesting a demonstration of your subscription service.
- Contacting you to find out more information.
Ideally, you want to make this process as easy and transparent as possible. Minimize the friction of starting a free trial by eliminating the need for a card or payment, include videos of how a demo might work, and give customers multiple ways to get in touch.
This is where you can use sales pipeline metrics to track how people are getting in touch and manage your funnel to guide them towards the most popular methods.
Identify the Best Qualified Leads
Not every customer who gets in touch will make it through the subscription sales pipeline, so it’s important to qualify your leads early. You can maximize the effectiveness of your time and close more deals by asking questions up front and relating what you learn to the historical pattern of sales wins and losses.
Can the Lead Afford Your Subscription Service?
Check that their organization has the funds to pay for the subscription service on an ongoing basis. Talk about possible pilot or trial periods so they can understand the value of what you’re offering before they fully commit.
Can the Lead Decide to Purchase Your Subscription Service?
Your lead may not be in a position to sign off on a purchase order or close a deal. If they don’t have the authority, ask to speak to a stakeholder in the business who is responsible for signing off on how money is spent. But also take into account people who may influence the decision maker during the sales cycle.
Does the Organization Need Your Subscription Service?
Just because a lead has expressed interest, it’s important to establish a fit between your subscription product and the organization’s requirements. Talk to a person in authority about exactly what their needs are, and explain how your subscription service could help to meet those needs.
How Soon Does the Organization Want to Purchase Your Subscription Service?
Finally, you’ll want to understand how quickly they want to move. You’ll need to figure in timescales for getting the service online, contracts, negotiations, payment terms, support, and the like.
Use sales pipeline metrics in your CRM tool to track exactly where people are in the process. If you’re identifying potential issues with low quality leads in the pipeline, look at updating information on your website to give people better data. For example, you might include more details on benefits and product fit so you get customers whose organizational needs are better aligned with your offering.
Create a Proposal for Your Subscription Service
Now that you’ve qualified your leads and established a need, it’s time to put a proposal together. This should detail everything your subscription service offers. This can include the scope of the service, costs, extras, support, and anything else the customer needs to make a decision.
At this point, you can also cross-sell and upsell additional services on top of the basic subscription arrangement. For example, you might offer priority support or additional modules that provide extra functionality for the client. Make sure that you clearly show the benefits of the additional services so the client can decide if they need them.
Use sales pipeline metrics to understand upselling and cross-selling opportunities so you can focus on the areas that work best for the customer.
Close the Deal, Sign the Contract
Finally, you have a contract in place and you’re ready to sign the deal. Once you’ve closed, you’ll need to arrange for ongoing payment and engage with your installation and operations teams to get the service delivered to the customer.
Predicting the Future of Sales with Sales Pipeline Metrics and Management
The subscription sales pipeline process looks straightforward, but in practice, there are a few things you can do to optimize how you use data to maximize your revenue:
- You always want the top of the pipeline to be full, so if it’s trailing off, look at optimizing your sales funnel to bring in more leads.
- Track the length of time it takes for customers to move through the pipeline and build this into your subscription revenue forecasting.
- Get deep insight into the drop off and conversion rate at every step. If people are dropping off, get detailed reasons why, and use this to optimize your business processes and materials to maximize the stickiness of the sales pipeline process.
- Investigate cross-selling and upselling opportunities through different means—for example, modular additions, different pricing packages, and other ways of giving the customer more choice.
- Use seasonal and historical trends, together with AI and machine learning, to forecast likely future deals and revenue.
An optimized subscription sales pipeline is the best way to build healthy, sustainable revenue and to grow your subscription business. Spend time tweaking and optimizing how you use data and communicate with customers to build a robust process that converts leads to sales, again and again.