Article | 15 min read

Sales pipeline: Definition, stages, and management

A healthy sales pipeline is critical to boosting sales and building strong customer relationships. Dive into the sales pipeline and how to use it effectively.

By Jeff Atwood, Regional Vice President, Corporate Sales

Published June 4, 2019
Last updated November 1, 2022

Prospecting. Qualifying leads. Negotiating. Closing deals. Sales agents need to juggle a lot of moving parts to meet their quotas. It’s not unheard of for novice sales reps to become overwhelmed and focus all of their energy on closing—neglecting other critical parts of the process. However, you can enable your team by providing the right tools and building a well-managed sales pipeline.

Keep your lead funnel full, monitor new opportunities, and nurture existing customer relationships with the help of a sales pipeline. Read on to learn everything you need to know about sales pipelines, including:

What is a sales pipeline?

What is a sales pipeline?

A sales pipeline is a visual illustration depicting where prospective customers are in the sales process. It includes representations of every stage from lead prospecting to the final sale. The visualization generally consists of a bar that resembles a pipe. A sales CRM enables teams to track and manage each stage of the pipeline.

  1. Sales reps move prospects through the various stages in the pipeline based on their responses and interactions.
  2. Eventually each prospect makes their way to the bottom of the sales funnel—resulting in a deal won or lost status.

This resource can provide valuable insights into each deal, allowing your agents to track a deal’s progress, identify limitations, and form strategies to hit their sales targets. Sales teams that don’t create pipeline visualizations run the risk of not being able to:

  • Upgrade the sales process over time
  • Calculate the number of leads it takes to meet goals
  • Track the performance of sales staff
  • Close deals in a timely manner

See more sales pipeline benefits below.

Benefits of perfecting your sales pipeline

Help your team close more deals by organizing the sales process and prioritizing data gathering.

  • Close deals faster: Give your sales conversions a boost and reduce the time it takes to become profitable.
  • Gather data-driven insights: Understand what to expect at every stage of the sales funnel so you can make smart decisions and know what tasks need to happen and when.
  • Find the right prospects: Automation can help cut out some of the initial prospecting groundwork, allowing you to focus on creating a personalized customer experience.
  • Get the timing right: Let insights and previous deals inform how you schedule communications.
  • Boost productivity: Cut menial duties out of your team’s workflow and let them focus on tasks that can benefit from a human touch.
  • Set a baseline: Standardize processes and timelines that have proven successful.

Who manages the pipeline?

The sales department is the driving force behind the vast majority of pipeline development efforts. They generally keep tabs on the sales pipeline using automation and management tools.

However, the marketing team can also contribute by creating sales materials, helping sales staff refine their messaging, and providing customer journey (sales funnel) insights. Customer service teams also offer support at all stages of the sales pipeline and customer journey.

What is the difference between a sales funnel and a sales pipeline?

Sales funnel vs. sales pipeline

Sales pipelines are commonly mistaken for sales funnels. Although these terms are complementary, they serve different functions.

  • Sales pipeline: Steps in the sales process
  • Sales funnel: Stages of the customer journey

You can use the sales pipeline to track sales-related activities and boost overall conversion rates. On the other hand, a sales funnel, or a lead funnel, takes a more customer-focused approach and shows every step of the customer journey.

What are the stages of a sales pipeline?

The stages within your sales pipeline are like stops on the road as you make your way toward your final destination. Clearly defined stages help your sales reps know the exact steps they need to take to close a deal. Each of the sales stages requires maintenance and a customer-centric strategy.

The stages of the sales pipeline include:

  • Prospecting
  • Lead qualification
  • Meeting
  • Proposal
  • Negotiation
  • Deal won or lost

Note: Sales pipeline stages may slightly differ from business to business.

Prospect: Identify potential buyers

Start looking for potential customers to pitch your products or services to. The internet and your professional network can be a good place to start if you’re not sure where to begin.

Once you have a list of prospects, get in touch using methods like cold calling, emailing, and snail mail to introduce them to the company.

Qualify: Determine if they fit your customer profile

Eliminate prospects who aren’t the right fit by comparing them to the profile of your ideal customer. Filtering out leads who aren’t a good fit for your product or service reduces the number of potential customers. However, it’s not a total loss because it stops reps from wasting time on prospects that won’t buy.

High-value leads worth pursuing are called Sales Qualified Leads (SQLs). These leads will show interest in your product or service and are ready to speak with a sales agent. Sales teams identify SQLs using lead scoring—the process of assigning point values to prospects based on various factors (such as the industry they work in or their level of interest) that indicate the likelihood they’ll make a purchase.

How to qualify sales leads

  1. Create buyer profiles
  2. Start prospecting to find leads
  3. Make sure your prospect matches the profile
  4. Determine if they’re interested or intend to buy
  5. Schedule a sales discovery call
  6. Filter out unviable sales leads
  7. Move to the next stage with promising leads

Tip: Target decision-makers who can sign off on deals rather than their subordinates.

Connect: Meet with your prospect

Schedule a discovery call to go over the prospect’s need, your company’s solutions and value proposition, and determine if they’re a good fit for your business. You should do this essential step early in the process so you don’t waste effort on a deal that isn’t going anywhere.

Some qualifying questions you can ask your prospect include:

  • Can you tell me more about the problem you need to solve or any areas where you could use additional support?
  • What do you think is causing these issues?
  • Have you tried any other solutions yet?
  • What outcome are you looking for?

You can also ask disqualifying questions like:

  • Are there any roadblocks to implementation?
  • What is your timeline for implementation?
  • What are your top two values between value, affordability, and speed?
  • What is your budget?

Tip: Research the company before going in to ensure you have unique insights for them and can create an effective agenda.

Negotiate: Proposal and quote

After meeting with the prospect and winning them over with a great sales pitch, reps discuss the terms and price of the deal with the potential customer. Handle this stage in the pipeline with care, as it brings the prospect one step closer to converting.

Find out what the prospect wants and customize your offering to suit their unique needs. Use the prospect’s insights to create a killer proposal—call out specific things they mentioned and address the top concerns they noted in previous conversations.

Close: Opportunity won or lost

The close is a make-or-break moment in the sales pipeline, so it’s important to employ proven closing techniques to seal the deal. Some effective tactics include:

  • Communicate with prospects using their preferred method
  • Listen more than you speak
  • Provide help and avoid being pushy
  • Use data and professional experience to prove your point
  • Offer them a time-bound deal
  • Create a sense of urgency
  • Ask relevant questions
  • Provide tutorials and product demos

Not all prospects who make it to the closure stage will buy your product or service. Whatever the result is, it’s important to use the last stage of the sales pipeline to evaluate what caused you to win or lose the deal. Holding a sales postmortem—a meeting to discuss and evaluate what went well (or what didn’t)—can help your team avoid future mistakes.

Help your sales pipeline flow

Learn how the Zendesk Sales Suite enables reps to get access to integrated tools and keep calls, emails, and meetings in one place.

How to build a sales pipeline

A definitive sales pipeline adds structure to sales reps’ day-to-day processes, making their jobs simpler to execute and easier to analyze. When a sales pipeline is clear, personalized, and efficient, your agents are far more likely to hit quota, reduce pipeline churn, and identify where things need to be tweaked in the future.

Essentially, a strong sales pipeline combined with a robust lead management framework will set your sales team up for success.

While a well-structured pipeline is crucial, you shouldn’t rush into developing one without first understanding what will work for your business and customer base. A sales pipeline that is perfectly suited for other companies may not be right for you.

So, how do you build a pipeline suited to your team?

1. Gather internal information

Collect sales data from previous quarters, information about sales staff, and other important information like:

  • Current sales targets
  • Sales process documentation
  • Product profitability and demand

2. Determine sales goals

Once you have the information you need, it will be easier to update and standardize sales goals across the company.

During this process, you should establish goals like:

  • Desired annual revenue
  • Time to close a deal
  • Ideal closing rate
  • Time to profit
  • Ideal customer

3. Finalize the qualification process

You don’t want unpromising leads wedged in your pipeline, wasting sales reps’ valuable time and throwing off sales projections. It’s vital to assess lead value and find out which MQLs (Marketing Qualified Leads) are worth pursuing further.

Finding a lead scoring system that accurately qualifies promising leads is extremely important. It’s the difference between wasting time on prospects that will lead nowhere and converting interest into sales.

Some standard lead scoring questions include:

  • Does this lead need our product?
  • Does this lead have a budget for the purchase?
  • Is this lead in a position where they are the purchase decision-maker?

When qualifying leads, quality always beats quantity. Less wasted time and more well-qualified leads means a higher return on time invested.

4. Refine lead nurturing tactics

Lead nurturing is essential to keep leads flowing smoothly through your pipeline, and the right tactics will make potential customers feel confident and secure enough to buy.

A few lead nurturing tactics you can try include:

  • Consistently communicating across platforms
  • Personalizing email campaigns
  • Using the same social media platforms as your ideal customer
  • Creating dynamic content that addresses customer pain points
  • Conducting direct sales outreach

It’s also smart to utilize sales force automation technology to decrease the number of banal administrative tasks sales reps have to deal with. This technology allows reps to focus on lead nurturing while reducing human error and boosting efficiency.

5. Identify sales opportunities

Use a CRM tool for effective pipeline management and to illuminate new sales opportunities. This tool can help:

  • Prioritize high-value leads
  • Prevent follow-up delays
  • Track shared behaviors between leads that buy
  • Determine what causes the highest customer engagement

Ultimately, customer engagement data can help you identify signals and traits that increase the likelihood a prospect will move to the next phase.

6. Assign tasks for each stage

At this time, you can start to develop the phases of the sales pipeline and assign tasks for each of them. Use a template to help you track these stages and set tasks or create your own. Just be sure to align these tasks with the buyer’s journey to maximize results.

Here are some examples of tasks sales reps can complete at every stage:

  • Prospecting stage: Call or email potential customers to build awareness.
  • Lead qualification stage: Vet client credentials to ensure they fit your customer profile.
  • Meeting stage: Create an agenda to prepare for the discovery meeting and make sure to answer everyone’s outstanding questions.
  • Proposal stage: Compile solutions and prices.
  • Negotiation stage: Review available discounts and pricing flexibility to prepare for negotiations.
  • Deal closed stage: Document the outcome.

7. Monitor conversions and metrics

If you’ve qualified and nurtured your leads well, you’ll naturally end up with a high rate of sales conversion. You’re also aiming for a high rate of sales velocity, with leads moving through your pipeline quickly.

Providing your sales reps with consistent and practiced sales conversion tools is vital. Consider giving reps leeway to offer one-time incentives or discounts to help inspire leads to move forward with your company. Ensure your sales team has access to high-value sales collateral, such as data sheets, white papers, and webinars, in order to convert bottom-funnel prospects into buyers.

Regardless of which tools you use, remember that establishing a proven strategy is key. Your sales pipeline is only as effective as the methods you develop to keep it running, and all team members must work together to fulfill that strategy. Having clearly defined goals is the first step towards meeting your quotas and KPIs.

How to manage a sales pipeline

Maintaining your pipeline is essential to both the sales department and the company as a whole. A well-managed sales pipeline gives you insights into deals, helps you measure performance, and provides an estimate of the number of deals you can expect to close each quarter.

  • Feed your pipeline regularly

Sales agents often make the mistake of prioritizing closing over prospecting. But if you neglect to fill your pipeline, your well will eventually run dry—forcing you to scramble to find new leads and reach sales goals.

Keep your pipeline full of leads by:

  • Proactively contacting potential customers through emails or sales calls
  • Asking for referrals from existing customers
  • Leveraging your business’ brand advocates to reach more people
  • Automate as many parts of the sales process as possible
  • Upsell and cross-sell
  • Always follow up

Following up with prospects is a critical part of sales pipeline management. It lets potential customers know that you care about providing them with a solution while keeping your business top of mind.

In the words of Selling Simplified author Michelle Moore, “Not following up with your prospects is the same as filling up your bathtub without first putting the stopper in the drain.” It’s an exercise in futility that’s a waste of your time and theirs.

Before you follow up, you should:

  • Discern a reason for reaching out (e.g. thanking them for their time, asking a question, gauging their interest)
  • Have the answers to any questions that were left unresolved the last time you talked
  • Prepare to sweeten the deal or offer a promotion
  • Schedule a pre-set amount of time to talk

Tip: Make sure to log the conversation in your CRM and note next steps so promising prospects don’t get lost in the pipeline.

  • Take dead deals off your radar

Just like all pipes, your sales pipeline can get clogged—prevent this from happening by regularly clearing out prospects who are stuck or disinterested.

More prospects might bolster your numbers, but they water down the quality of your lead pool. Good sales pipeline management means always picking quality over quantity. You should remove leads that won’t move through the pipeline and block its flow.

Tip: Identify leads who have spent more than the average amount of time in the sales cycle. Give them a nudge—if they don’t respond, cut them loose.

  • Make pipeline reviews a priority

Pipeline reviews are ongoing meetings between sales agents and managers to determine how well a sales pipeline is functioning. A regular review of your pipeline will help you identify the areas to improve and the successful sales activities you should continue.

You can talk through existing deals in the pipeline, struggles, challenges, and other issues. Based on data from your CRM or pipeline software, you can also discuss which stages your deals tend to get stuck in and ways to sharpen your tactics.

  • Avoid common mistakes

Some common mistakes that you should avoid as you build and maintain your sales pipeline include:

  • Not identifying the cause of a lost deal
  • Taking a half-hearted approach to training sales staff
  • Never updating sales enablement materials
  • Relying on subpar pipeline management software
  • Not prioritizing automations and integrations

How to measure the efficacy of a sales pipeline

A strong sales pipeline manifests high conversion rates and sales velocity with a short sales cycle length. But in order to assess if your pipeline is running smoothly, you need accurate data.

With the high-level CRM analytics of today, it’s easy to track just about everything in regard to your sales performance. However, simply gathering data isn’t enough. You must also track important sales metrics over time. Some metrics will provide clear insights after a week, while others might provide no meaningful information unless they are evaluated quarterly.

Below are some important sales performance metrics and how often to track them:

Weekly sales performance metrics:

  • Call/contact volume
  • Percentage of appointments
  • Lead response time

Monthly sales performance metrics:

  • Number of MQLs
  • Account Executive (AE) capacity
  • Business Development Representative (BDR) capacity
  • Win rate

Quarterly sales performance metrics:

  • Lifetime Value (LTV)
  • Acquisition cost
  • SaaS “Magic number”

Why consider sales pipeline software?

Reliable sales pipeline software is just what you need to run a smooth and effective lead-to-customer pipeline. This digital tool organizes sales data, helps you visualize possible opportunities, and close deals faster.

With an intuitive, customizable interface, Zendesk Sell makes it easy to monitor the metrics you care about and hit sales targets. Sell comes complete with:

  • Contact management tools
  • Power dialer software
  • Referral and email tracking
  • Social media integration
  • Collaboration tools

Check out the complete guide to sales pipeline software and see how we can help you develop an unbeatable sales pipeline.

Help your sales pipeline flow

Learn how the Zendesk Sales Suite enables reps to get access to integrated tools and keep calls, emails, and meetings in one place.

Help your sales pipeline flow

Learn how the Zendesk Sales Suite enables reps to get access to integrated tools and keep calls, emails, and meetings in one place.

Watch free demo