Building a healthy business development pipeline is the key to a sustainable business. Think of your pipeline as the beating heart of a meaningful book of business.
Your mission (should you choose to accept it) is to fill your pipeline with quality leads that you can eventually turn into clients.
Watch the video below to find out how to use Practice Pipeline to track your interactions and relationships with they key leads within your pipeline.
Anatomy of a Funnel
Your business development pipeline can be imagined as a "funnel", with a large number of prospects at the top, and a smaller number of clients at the bottom. A "prospect" is really anyone that could eventually make use of your services, but hasn't yet done so.
As prospects become more and more aware of your services and how they might benefit them, they progress further down the funnel. This happens through:
- Finding out what your prospects needs are, and what may help them fulfill those needs
- Making your prospect aware of how you can help them, through advertising your services or interacting with them
- Convincing them that your services are the best fit for for their needs.
Eventually, near the bottom of the funnel, your prospects will make their buying decision. If they buy, out of the bottom the funnel they finally emerge, as clients.
Of course, you will never get 100% of people to convert into clients, so that means you have to cast a wide net to get as many prospects as possible into the top of your funnel.
Filling the Funnel
The first question that most have is. "How many people should I focus on at a time?"
There is a pretty simple equation to answer that question. Your close rate will determine how many prospects eventually become clients. Ask yourself, "How many relationships must I nurture to secure a new piece of business?" Start with a rough estimate. If you have, say, a 25% close rate, that means that you receive a new piece of business from 1 of the 4 contacts that you pursue.
If you want to have a healthy pipeline, you'll want to have at least enough contacts in your pipeline to realize that close ratio. In this case, if your close ratio is 25%, you want at least 4 contacts in your pipeline, but ideally, you'll have many times more than that. If your close rate is closer to 10%, you'll want at least 10 contacts in your pipeline. It never hurts to have many contacts in your pipeline, but be sure to focus on the prospects with the most potential.
The higher your close rate, the more business will result from a bucket of contacts. Thus, you should be filling your funnel with quality leads, working on your contacts a bit at a time to move them further down the funnel to eventually buy your services. Improving the effectiveness of your business development skills will help you hone your close rate, helping you close more business with less overall effort.
Click below to watch the video.
To view more videos on the basics of business development, visit our videos page.
To learn more about how to prioritize who enters your funnel, check out this blog post: How to Prioritize your Contacts into a Pipeline