Every company needs an effective sales pipeline. It’s a non-negotiable. Properly managing your leads and prospects throughout their journey to becoming customers optimizes your resources, closes deals faster (and more often), and drives revenue growth.
However, note that all businesses have unique pipelines for their specific journey.
To create a sales pipeline that works for your company (because, let’s be real, this is not a one-size-fits-all structure), it’s essential to understand the individual stages or steps in the sales pipeline—what they are and how you can manage each of them for maximum effectiveness in your business.
In this blog post, we will dig deep into the different steps of a typical sales pipeline, understand how those are commonly organized, and explore available tactics and tools to set up or optimize yours for better performance.
You’ll also get tips on how to manage the sales pipeline stages efficiently.
Let’s get started.
But first, a quick overview of what a sales pipeline is.
What is a sales pipeline?
A sales pipeline is an organized (and visual) way to track prospects as they move through the different stages of the buying journey, from initial contact to final sale. It helps sales teams understand where prospects are in their sales journey and how close they are to inking a deal.
Simply put, the pipeline represents sales activities and forecasts that help sales teams measure the effectiveness of their process and practices, and quickly identify areas that need to be optimized for better performance.
Sales pipeline stages
Every sales pipeline has several stages. It’s what allows you to see exactly where your prospects are in their buying journey. This kind of clarity makes it easier to pinpoint sources of friction, identify areas for improvement and establish goals for success.
While every company may have its own variation, here are the core stages each sales pipeline should include.
1. Prospecting
Prospecting involves identifying and reaching out to potential buyers who would be interested in your solution. This could include contacting people who have previously expressed interest in your product or service or actively searching for people who haven’t heard about you yet. The most important thing is that you find the prospects that match your ICP.
Sales teams are often responsible for outbound lead gen efforts. And let’s be honest, it can be a grind. Identifying which prospects have the characteristics you care about most can be hard. That’s why we recommend using exegraphic data.
Companies continue to invest in sales prospecting because it works. It pays off. It builds a strong pipeline. Getting this first step right impacts the performance of every stage moving forward, which makes it the most critical stage of your pipeline.
2. Lead qualification
Once you have a prospect in hand—whether it came from outbound or inbound efforts—the next step is to qualify them. You don’t want to invest too much time working a lead that’s not qualified or spend too much time on a lead that’s less qualified while a more qualified lead sits untouched.
Lead qualification involves assessing sales leads to determine if they are qualified enough to enter the sales pipeline. The critical step here is to ensure that a lead meets the criteria for sales success. There are a few factors sales teams should consider when qualifying leads. These factors include
- Needs: Does the lead actually need your product or service?
- Authority: Is the lead positioned to make the purchasing decision?
- Interest: Does the lead have enough interest in your product or service?
Mind you, you can still have sales opportunities from unqualified leads. However, your teams should focus first on leads that meet all the criteria. Focusing your attention on the most ready leads gives you the ability to close deals faster—and beat out your competitors.
Whether a lead meets qualifying criteria is up to the parameters you and your team set. It will differ from business to business. So, be sure to clearly communicate the minimum criteria to your team and train them on the right discovery to conduct to get a clear picture of the lead’s fit and readiness.
3. Initial contact
Congratulations! You have qualified sales-ready leads. Now what? It’s time to reach out and make the initial contact.
This sales pipeline stage involves reaching out to leads through email, phone or video. It’s all about getting to know your leads better and offering them something of value.
At this stage, sales reps need to be able to understand leads better and build trust by providing them with useful information about your company that includes
- How they would benefit from your company’s product or services
- How they make use of the product or service
- Success stories and customer testimonials
- A free trial of the product or service
Sales reps also need to be able to create a pitch, which should be customized for each lead. This sales pitch should provide valuable information about the product or service being sold and a clear call to action.
By providing qualified leads with helpful information and making a personalized sales pitch, sales teams can get their leads safely to the next stage of the sales pipeline.
4. Scheduling meetings, demonstrations and presentations
Are your leads interested in learning more about your company’s offerings after your sales team has made initial contact with them? Great! You’re on to the next stage.
At this point, sales reps need to create an agenda, schedule sales meetings and prepare sales presentations. The sales team should also develop a sales strategy for this sales pipeline stage.
Your sales presentations should be designed to show your leads how your company’s product or services can help them reach their goals. During this time, be sure to also differentiate your product or services from competitors.
Differentiating your products or services from that of others doesn’t necessarily require sales teams to point out their weaknesses. Instead, they should focus on the strengths of your company’s product or services and what it can do for your customers.
Demonstrations may include:
- Using visuals in sales presentations to emphasize product or service features
- Using sales collateral such as sales decks and brochures to explain products or services further
- Demonstrating how sales prospects can use the product or service
By preparing sales presentations and strategies, your team can help leads better understand your company’s product or services and help prospects move one step closer to solving their problem with your solution.
5. Needs analysis
By the time you reach this stage, sales reps should better understand leads’ needs. They must go beyond sales presentations and focus on each lead’s specific needs and desired results. And it all starts by understanding their goals, budget and timeline. This won’t always be an easy conversation; it may require some delicate prying. It will, however, help you better understand how to best meet your lead where they are and adjust your sales strategy to motivate them to take action.
6. Close the deal
The next stage of the sales pipeline is closing the deal. It’s all about negotiating sales contracts and agreements while ensuring your (almost) new customer understands the terms and conditions of their contract.
To be successful in this stage, you and your team need to be ready and able to answer the critical questions your leads might have. You’ve built trust—and now you have to maintain it. It’s what reassures your leads that they’re making the right decision.
7. Follow up with future needs or possible business
Once you’ve landed a new customer, it’s important to follow up and ensure that they’re satisfied with their new product or services. Not only do you want to retain them as customers, but you also want to keep the relationship warm for possible future upsells and expansion opportunities. A great way to do this? Keep your customer informed of new products, services and capabilities.
But, that’s not all. Keeping in touch with your customers provides a great opportunity for you to solicit feedback that allows you to improve your sales strategies—and even get referrals.
Tips on how to efficiently manage sales pipeline stages
These stages are great, but maybe you need a little extra guidance on how to help buyers move from one stage to another? Here are a few tips:
- Make sure your team knows which accounts to target and why. (If you’re using a static doc to document your ICP criteria, reach out. We’ll build a dynamic AI-powered ICP and provide you with a prioritized target account list.)
- Set up stage-specific tasks for your sales team. This will help your team direct their energy to the activities that keep prospects and leads engaged (and prevent them from falling through the cracks).
- Provide your sales team with clear goals and strategies for each stage of the sales pipeline so they can see if they’re on track—and where they need to double down.
- Make sure your sales team is equipped to answer questions they might receive from prospects and leads, especially the tough questions. Providing this type of training removes one of the most common points of friction in the sales process and instills trusts with your brand.
- Use sales and automation tools to keep track of prospects, leads, tasks—and all the metrics associated with them. You could do it manually, but offload it so you can focus on the important things that can’t be automated.
- Document sales processes and create sales training material. This should encompass everything from how your internal processes work to value-based selling tips.
If you’re ready to optimize your sales pipeline, contact us. We’ll show you how to strengthen your entire funnel by starting with the best-fit prospects.