Certain businesses have a natural sales flow, receiving leads from marketing campaigns or client referrals. These prospects are nurtured through conversations and eventually become paying customers. However, many businesses struggle with a disorganized sales process because they overlook the importance of the sales pipeline stages.
As a matter of fact, 54% of sales professionals say selling is harder this year compared to previous years.
To address this challenge, you should build a sales pipeline. This insight becomes instrumental in strategically growing your company’s sales. Sales managers can leverage the stages of the sales pipeline to establish a structured and disciplined approach to sales.
This article will provide the ultimate guide to understanding the sales pipeline and its various stages.
A sales pipeline refers to a structured and visual representation of the different stages in the sales process. It’s like a roadmap showing how a potential customer goes from initial contact to purchase.
Think of it as a series of interconnected steps, each representing a specific phase in the sales cycle. A sales pipeline aims to help sales teams track and manage their interactions with prospects.
The sales pipeline and sales funnel are intertwined, as leads move through the sales stages within the broader context of the sales funnel.
The pipeline represents the steps and actions taken to move individual leads closer to a sale, while the sales funnel provides an overall view of lead flow and conversion rates. Both are valuable tools for you to manage and improve your sales and marketing efforts.
A well-structured sales pipeline has two main functions — measurement and action. It’s like looking both backward and forward. A clear pipeline allows sales reps to prioritize their efforts and learn how to allocate resources to the right pipeline stage.
By perfecting your sales pipeline, you can unlock several benefits to help your team close more deals.
The main stages of the pipeline are a structured framework that guides the sales process from prospecting to closing deals, ensuring that no opportunity is overlooked.
Let’s explore the seven common sales pipeline stages. The sales team can easily customize these to fit the sales process applied.
Prospecting is the initial stage of the sales pipeline, wherein salespeople actively search for potential customers and opportunities. They identify leads through cold outreach, networking, or online research.
🚨 One of the main challenges in the prospecting stage is finding high-quality leads among a large pool of potential prospects. This can be time-consuming and requires effective lead-generation strategies.
🎯 By focusing on quality rather than quantity, sales teams can increase their likelihood of engaging with valuable prospects.
Sahil Kakkar, CEO at RankWatch.com, explains why his company prioritizes this initial stage:
“At RankWatch, we place immense value on the prospecting stage of the sales pipeline. This initial phase is not just about identifying potential leads; it’s about laying the groundwork for meaningful relationships. Our approach is to blend traditional prospecting techniques with the insights provided by our SEO tools, enabling us to not only find businesses actively seeking solutions we offer but also to understand their pain points deeply. This dual focus ensures that when we reach out, our communication is personalized and relevant.”
Lead qualification is one of the pipeline stages wherein salespeople check potential leads to see if they meet specific criteria. This evaluation helps determine if the leads are ready and suitable for the sales process.
🚨 The main challenge in lead qualification is determining if a lead has the potential to become a paying customer.
🎯 You should develop lead-scoring models that assign values to different criteria. A good example is the lead-scoring model based on behavior, which evaluates leads based on their actions indicating purchase intent. Thorough research on leads and the use of qualification frameworks can also help.
Image source: blog.move-mktg.com
Laia Quintana, head of marketing and sales at TeamUp, provides insights into this crucial aspect of the sales journey:
“In lead qualification, it’s not just about identifying if a lead fits into our ideal customer profile, but also about understanding their readiness to adopt our solution. We need to ascertain their pain points, their current solutions, and how our product can provide superior value. It’s a delicate balance between assessing the lead’s potential and understanding their unique needs. This stage is less about selling and more about listening and learning. It’s about building a relationship based on trust and mutual benefit.”
Sales professionals engage with qualified leads in the meeting or demo stage to showcase the product or service. They conduct meetings or demonstrations to address any questions or concerns. This stage aims to provide a deeper understanding of the offering.
🚨 The main challenges in this stage are conveying the value proposition and addressing the leads’ specific needs.
🎯 To ensure the success of such demos, it’s crucial to maintain a two-way conversation that addresses prospects’ questions and concerns. Stefan Chekanov, CEO at Brosix, elaborates:
“Having incorporated free demonstrations in our sales pipeline, we understand the value they provide in giving hot prospects tangible evidence of the benefits of our product. Although demos take time, they give our prospects the chance to experience the product first-hand before committing to it. It also boosts their knowledge of and confidence in the product, getting a crystal clear picture of exactly what they are getting. For a demo to be successful, ensure it is a two-way conversation that answers prospects’ questions and addresses any of their concerns.”
Sales professionals present a formal proposal that outlines the offering’s details, such as pricing, terms, and conditions. The goal is to convince the lead to purchase and move forward in the sales process.
🚨 Crafting a compelling and tailored proposal that addresses the client’s specific needs can be demanding. Understanding the client’s pain points and expectations requires thorough research.
🎯 Providing flexible or personalized options can increase the chances of a successful proposal.
Effective negotiation in sales is highly valued and should be conducted with mutual respect and fairness. Both parties should engage in the process with genuine commitment. They should work towards a mutually beneficial and well-balanced agreement.
🚨 Addressing customer objections, negotiating terms, and ensuring a mutually beneficial agreement are the challenges at this sales pipeline stage. Therefore, it demands strong communication, problem-solving, and relationship-building skills.
🎯 Both the buyer and the seller should explore alternative options to meet their needs and interests. Thinking outside the box can unlock opportunities for win-win outcomes.
At the closing stage, the sales agent and the prospective client are ready to complete the deal. This involves signing a contract outlining the agreed-upon terms and obligations.
🚨 However, if the prospective client rejects the sales agent’s proposal, it’s important not to lose hope. The client may come back later and reopen negotiations. In such situations, it’s crucial not to sever ties completely. Instead, the agent should continue nurturing the relationship by guiding the prospect back to the initial stage of the sales pipeline.
🎯 Simon Bacher, CEO at Ling, emphasizes the sealing of agreements through meticulous discussions and personalized interactions:
“The deal-closing stage is critical in the sales pipeline because you don’t want the buyer to back out at the last minute. At Ling, we cater to B2B clients like ed-tech companies and marketing agencies seeking language learning lessons. We seal the deal with a licensing agreement and ensure the customer understands every item through a face-to-face meeting, follow-up email, or video call. This ensures we are on the same page regarding expectations, deliverables, and responsibilities, nurturing relationships and refining our approach through feedback.”
The last stage is focused on keeping existing customers and ensuring their satisfaction. It involves building and maintaining strong customer relationships.
🚨 Customers may experience post-purchase doubts, leading to dissatisfaction and potential returns or cancellations.
🎯 Acquiring new clients is more costly than retaining existing ones. You should engage in upselling and cross-selling opportunities with your newly established customers. Remember that providing exceptional customer service and personalized experiences helps build long-term relationships.
Implement proactive communication strategies. Seek feedback and conduct customer satisfaction surveys to identify areas for improvement.
The seven sales pipeline stages above can be applied both to B2C (business-to-consumer) and B2B (business-to-business) contexts. However, there are certain aspects to consider when applying them to a B2B context.
Navigating the B2B sales pipeline stages involves a refined understanding of the unique dynamic of B2B interactions.
Prioritize prospects that align closely with your ideal customer profile. Dedicate resources and time to cultivate customer relationships.
Let’s explore how the sales pipeline stages might operate in the media production industry.
In addition to the sales pipeline stages, you should consider external metrics to better understand their sales performance. These metrics provide valuable insights into certain factors outside the pipeline that can impact sales.
A strong sales pipeline and a robust lead management framework lay the foundation for your sales team’s success.
However, don’t rush into creating a sales pipeline without considering what works best for your business and the customer base. What may be effective for other companies might not suit your needs.
Discover effective strategies for creating your own sales pipeline with these valuable tips.
The first step in building your sales pipeline is identifying your target audience, ensuring that you focus your efforts on the right prospects. Understanding their preferences will help you establish the most effective way to make initial contact with them.
Optimize productivity by assigning specific sales activities to individual team members. Distribute responsibilities such as prospecting, lead nurturing, and closing based on the strengths and expertise of each team member.
Doing so ensures that every team member can focus on their core tasks. This will result in a more informed sales pipeline based on individual experience in specific pipeline stages.
Evaluate historical data and analyze your sales cycle to determine its average duration. Understanding the time prospects progress through each pipeline stage is vital for accurate forecasting and resource allocation. It also helps identify potential bottlenecks or areas where improvements can be made to expedite the sales cycle.
Strike a balance between maintaining an adequate number of leads in your pipeline and avoiding overload. Consider your sales goals, conversion rates, and historical data to determine the ideal size of your pipeline. Sustaining a healthy number of leads and opportunities ensures a steady flow of potential customers.
To ensure the health of your sales pipeline, define and monitor the relevant metrics. As sales activities progress, these metrics can provide valuable insights. Set clear sales targets. Track metrics like the average deal value, win rate, and conversion rate.
Consider implementing these sales pipeline management best practices to drive consistent results.
Focus on prospecting alongside closing deals. Here are two ways to keep your pipeline full:
Ensure that you allocate a specific time slot for the conversation to ensure a productive and focused discussion.
Like any pipe, a clogged sales pipeline can hinder progress and impede sales success.
Schedule regular sessions with your sales team to discuss the performance and progress of the sales pipeline.
To manage your sales pipeline effectively, it’s important to avoid common mistakes that can hinder your progress. Here are some straightforward tips to help you avoid these pitfalls:
A successful sales pipeline yields high conversion rates, fast sales velocity, and a short sales cycle.
Modern CRM analytics tools make tracking various aspects of your sales performance easy. However, collecting data alone is not enough. Monitor key sales metrics over time.Here are some essential sales performance metrics that you should track:
The sales pipeline stages provide a clear roadmap for your sales activities, from prospecting to closing the deal. Each stage serves a to move leads through the pipeline.
Learn how to use these sales pipeline stages for a well-organized and effective sales process. Stay focused, adapt to customer needs, and optimize your approach to maximize your sales and business growth in 2024.
Iustina is a curious copywriter with an analytical mind and a demonstrated history in the advertising industry. She likes mixing words with data and is passionate about human behavior. When she's not at her work desk, you'll probably find her enjoying refreshing tea flavors, spilling stories on paper, or binge-watching true-crime documentaries.
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