Your sales pipeline is the set of stages your leads pass through on their way to becoming customers.
The stages track a prospect’s progress from the first time they become aware of their need for your product or service all the way through their lifetime as your customer.
The number of stages and what you call them is up to you. We’ll look at some typical examples below.
Keep it real
The important thing is that your pipeline reflects people’s actual journey through your process—not the journey you wish they had. Only by mapping your pipeline accurately will you have the information you need to improve it.
Visibility and accountability
A sales pipeline allows you and your team to share a common visualization of your sales process.
This, in turn, lets you track the productivity of individual salespeople and of the team as a whole.
Sales pipeline vs. sales funnel vs. sales forecast
Don’t get confused by the terms sales funnel and sales forecast. They’re related to your sales pipeline, but different:
Your sales pipeline is the sales process from your perspective
Your sales funnel is the sales process from your customers’ perspective
A sales forecast is your analysis based on sales pipeline data
Stages of a sales pipeline
Pipeline stages are the distinct phases of your sales process that customers pass through.
The pipeline helps you optimize your sales process. You want to make sure you have designed the right experience for your leads at each stage, and to understand where you are losing people along the way.
The traditional pipeline model is:
To have a sales pipeline, you need to generate leads.
The first step to lead generation is knowing who you’re trying to sell to. This is sometimes called an Ideal Customer Profile, or ICP.
Is your ideal customer someone like the people you’ve had success selling to in the past? Or do they have a different profile, representing new opportunities?
Once you have an idea of who you’re looking for, you can create marketing campaigns designed to appeal to them.
Marketing is a whole topic by itself, and comes in many forms. These include digital and print ads, email campaigns, attending and sponsoring events, and producing valuable content marketing assets.
Generating leads is just the beginning. You can’t realistically expect most people to buy from you immediately. That’s where nurturing comes in.
In this stage of the pipeline, you nurture your leads by contacting them periodically to keep them from “going cold.”
These contacts are often automated when lead volume is high. But you should try to make them as personal and human as you can!
It’s not about you
Above all, the messages and content you send to leads in your nurturing stage have to be valuable and relevant to them. Give them tips, tell them about clients like them. Entertain and inform them. But don’t give them a hard sell. It’s too early for that.
It may be tempting to make these nurturing contacts all about how great your company is, or to pressure your leads to move on through your pipeline.
Don’t do that! If you can’t show your leads the value you have to offer them, they’ll opt out and you won’t have the opportunity to take them further along.
Successful lead generation will bring in a lot of prospects. But these aren’t all equally promising fits for what you offer. In the marketing qualification phase of your pipeline, you’ll analyze and categorize your leads.
Marketing qualification has two primary goals. First, you want to discard or de-prioritize the leads who are least likely to convert. Maybe they’re in a location you don’t serve, or their needs aren’t met by your product.
Second, organize the leads you keep. You may have different customer segments with different needs and challenges. Talking to them all in the same way isn’t good enough.
The specific categories into which you divide your “good” leads depends on your business. Some possibilities include:
Other tools or products they’re using
Their specific business challenge
The urgency of their challenge
At this stage, qualified leads are ready to move from marketing to the sales part of your pipeline.
Only leads that meet established criteria should be passed from marketing to sales. Those that have not yet met the criteria should remain in the nurturing stage until they do qualify.
The exact criteria for sales acceptance will depend on your situation. The important principle to keep in mind is that you want to make effective use of your sales team’s time.
Marketing can include automation and mass digital communication tactics such as emails and display ads. This can be done at scale.
Accepting the right leads
Sales, on the other hand, tends to be a person-to-person, high-touch activity. Of course, you do want to qualify and pass to your sales team as many leads as possible. However, giving your sales team the wrong leads—those who are not ready to buy—only wastes valuable time and energy.
When sales accepts a lead, typically the next step is an outbound phone call.
You’ve generated, nurtured, and qualified your leads. You’ve passed the qualified leads on to your sales team, and the sales team has dialed out to the lead.
So what do they talk about?
The sales qualification stage is the time to verify that the lead has a clear need, timeline, and budget for making a purchase. This is when you determine whether the lead is ready to make a final decision about becoming your customer.
If they are ready, you can assign the lead an account manager to close the deal.
If the lead isn’t ready yet, they can return to the marketing portion of the pipeline for more nurturing. The information you’ve gathered about them can help you focus your nurturing communications more closely on their needs and concerns, making it more likely they will move closer to a final decision in the near future.
For leads who are ready—with a need, timeline, and budget for your product or service—it’s time to close the deal.
There are many sources of advice for this part of the sales process. Your pipeline, which is designed to filter out the leads who aren’t ready (yet) is instrumental in boosting your team’s close rate.
Closing the deal is not the end
When people do buy from you or sign up with you, your job isn’t done. There are still at least two important things to do right away.
First, you need to prove your value by making account setup or onboarding fast and easy.
Then, you have to send data back to your marketing team to close the loop. This helps your pipeline become more efficient at the crucial tasks of nurturing and qualifying leads effectively going forward.
After the close
While closing the deal and onboarding the client is the last phase of your sales pipeline, it’s also the beginning of a new phase of your relationship with your customer.
If you stop caring about your lead once they’ve signed on the dotted line, you won’t get far.
In the weeks and months after your lead becomes a customer, you need to stay focused on providing the value you promised so you can retain that customer.
Just as you nurtured your leads in the beginning of your pipeline, you have to stay engaged with your customers once they sign up.
Develop a content strategy to keep the relationship strong, showing your value and sharing success stories. This might be a newsletter or other regular communication, or it may be something based on responding to customer activity.
Either way, your goal should be to stay engaged with your customer. If you make them feel less important after they buy your product or service than they were before, you’ve got problems.
Some organizations think they have to “wow” their customers to keep them. While exceptional moments of above-and-beyond customer service might make for good stories, research shows that what customers really want is simpler.
People want you to deliver what you promised them.
It might not be as exciting or as flattering to your organizational ego, but simply showing up and giving people what they paid for is a solid way to earn their trust. Be consistent. Be honest. Be available. Do what you said you’d do, and customers will stick around.
Up-sell and cross-sell
You’ve proven your value to your new customer and earned their loyalty. Now you have an opportunity to strengthen the relationship further by up-selling and cross-selling.
However, it’s important to do this at the right time—not right after the initial close.
Once your customer has had time to adjust to your service and appreciate the value you’re providing, they’ll be more open to buying more from you.
This might be simply moving up to a more robust plan. Or, it might mean buying a separate but related product or service from you.
Either way, remember to work hard to earn the right to expand your relationship. If you focus too much on what you can squeeze out of a customer, they’ll notice—and will be less likely to stay with and recommend you.
Ask for feedback
There’s an easy way to find out if you’re making your customers happy.
Asking for feedback seems obvious, but many organizations are reluctant to do it.
Why? Probably because they’re afraid of what they might hear. They’re afraid their customers will have suggestions, questions, and even demands. But these things shouldn’t scare you.
Instead, you should be excited by the opportunity to learn from your customers. They can help you make your product, service, or process better. And that will only help you in the long run.
Asking for feedback, listening to it, and acting on it is a critical step in your pipeline. Don’t neglect it!
Make the pipeline your own
At each stage of your sales pipeline, your team will take specific actions to help leads decide whether to buy from you.
There is no one-size-fits-all sales pipeline. The stages can vary. The key is to make them specific and relevant to your business.
Don’t fall into the trap of using a generic pipeline that doesn’t reflect the actual steps your sales team goes through to close deals. The more tailored your pipeline stages are to how your team really works, the more effective your sales operation will be.